India LNG Market is anticipated to grow robustly in the forecast period 2024-2028. The expansion in LNG bunkering
infrastructure can be ascribed to ship builders predicted increased preference
for LNG over other fuels. Moreover, various ports in the nation are aiming to
build LNG fueling infrastructure. The increased demand for natural gas in the
country because of lower emissions is expected to increase the usage of LNG as
a marine fuel in the shipping sector. Additionally cooking, heating homes, and producing
electricity are among the uses of natural gas in residential buildings, whereas
heating, producing electricity, and manufacturing products like fertilizers,
paints, and pharmaceuticals, as well as occasionally refueling commercial
vehicles, serve as applications of natural gas in commercial buildings. In
2021, natural gas usage was 62.2 billion cubic metres. The rising demand for
natural gas is projected to fuel the industry even more.
Growing Demand of Distributed Power
A growing emphasis on distributed power
and utility projects is expected to drive market growth over the next eight
years. The expected increase in natural gas demand in the power generating
industry would also increase demand for liquefied natural gas (LNG) in various
nations. Coal is the most common source of power generation; however, due to
the depletion of coal supplies and the negative environmental effect, there has
been an increase in the usage of natural gas and other renewable energy sources
for electricity generation.
One of the primary causes for rising gas
usage is growing awareness about the use of greener energy. Furthermore,
transmission and distribution infrastructure development demand are expected to
rise further in the future years. The government is focused on gas pipeline
expansion as of February 2019, pipeline infrastructure stood at 16,200 km, with
intentions to grow it to 27,400 km by 2025.
Rising Investments and Utility Projects
in LNG Market
In the coming years, the country is
likely to be one of the regional LNG hotspots. Petronet LNG operates from an
operating port in Kochi, India. Furthermore, LNG Alliance announced an
investment of around USD 290 million in January 2022 for the development of a
significant LNG import terminal in Karnataka, which is expected to be India's
first dedicated LNG bunkering plant. The LNG import terminal will have a
capacity of 4 million tonnes per annum (MTPA). As a result, such prospective
projects are projected to propel India's LNG market throughout the predicted
period.
India presently operates four LNG
receiving stations. All are shore-based facilities on the west coast of the
nation. India's ambition to expand the amount of natural gas in its energy mix
to 15% by 2022 will need a significant increase in imports as well as the
development of additional LNG facilities. Over the following seven years, the
government intends to construct an additional 11 terminals. As a result, LNG
purchases are expected to reach 30mta (million tonnes per year) by 2020, a 60%
increase over 2016.
So far, Petronet, GAIL, and the Gujarat
State Petroleum Corp (GSPC) have been India's primary LNG players, signing
long-term sale and purchase agreements (SPAs) with international suppliers.
State-owned oil refiners such as Indian Oil Corp (IOC), Bharat Petroleum, and
Hindustan Petroleum have positioned themselves for expanded engagement in the
LNG market, while a slew of new terminal projects is bringing in yet another
wave of newcomers.