India to be second largest driver of gas demand in Asia: IEA

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India’s annual gas consumption is expected to increase by 25 billion cubic metres (bcm) in the 2020-2024 period which translates into a 9% annual average growth rate, the International Energy Agency (IEA) said in its latest report.

India has plans to increase the share of gas in its energy basket to 15% by 2030 from the current level of 6%. IEA noted that “India is set to emerge as the second-largest driver of gas demand in Asia after China and the fifth-largest contributor globally after China, Iran, Russia and the United States”.

Indigenous natural gas production caters to about only 51% of the country’s requirements and domestic output increased 19.1% on year to 2,740 million standard cubic metre (mscm) in May.

Total consumption of natural gas in May 2021 was at 5,247 mscm, 4.3% higher than the corresponding month of the previous year. The 2,587 mscm of liquefied natural gas (LNG) imported in the month was 9.2% more than the import volumes of May 2020. Cumulatively, India imported 5,242 mscm in April-May, 2021, 24.9% higher annually. However, the value of imports grew 67% year-on-year to $1.5 billion with rising prices.

“In 2021, India’s gas consumption is expected to increase by 4.5%, but the economic fallout from the ongoing second wave and high LNG prices present downside risks to our forecast”, IEA pointed out in its latest market report titled “Gas 2021 – Analysis and forecast to 2024”. Demand for the natural gas in the domestic market is traditionally dependent on the fertiliser (28%), power (23%), CGD entities (16%), refineries (12%) and petrochemicals industries (8%).

Almost two-thirds of India’s 2020-2024 demand expansion is seen to come primarily from substitution of liquid fuels to gas, the IEA said. The government aims to have 10,000 CNG retail outlets in the next five years from the current status of around 2,500 CNG stations across the country.

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