Latest News | Import Dependency for Natural Gas Expected at Around 45 Pc by FY26: CareEdge Ratings
Get latest articles and stories on Latest News at LatestLY. India's dependency on imported LNG, which stood at 53 per cent of its total natural gas consumption in 2020-21, witnessed a gradual decline in the past few years as domestic natural gas production has increased, CareEdge Ratings said, forecasting import dependency dipping to around 45 per cent by FY26.
New Delhi, Mar 19 (PTI) India's dependency on imported LNG, which stood at 53 per cent of its total natural gas consumption in 2020-21, witnessed a gradual decline in the past few years as domestic natural gas production has increased, CareEdge Ratings said, forecasting import dependency dipping to around 45 per cent by FY26.
The higher demand for natural gas in the country is also likely to be supported by sizeable growth in domestic gas production wherein nearly 30 million standard cubic meters per day of new domestic natural gas production has gradually come on-stream over the last three years and another around 15 mmscmd of new domestic natural gas production is expected to come on-stream during FY25.
Hardik Shah, Director at CareEdge Ratings said, "With greater thrust of the Government for transitioning towards cleaner fuel, there was a steady growth in natural gas consumption till FY20. However, due to the impact of the Covid-19 pandemic and sharp increase in imported LNG prices due to the geopolitical situation, there had been a decline in natural gas consumption during FY21 and FY23, respectively".
CareEdge Ratings expects India to record its highest-ever gas consumption annually in the 2023-24 fiscal year. Natural gas consumption declined in FY23 as gas lost its cost competitiveness to the alternate fuels, owing to the sudden outbreak of war between Russia and Ukraine in February 2022, leading to a sharp increase in prices of natural gas.
"India aims to increase the share of natural gas in its primary energy mix from existing 6 per cent to 15 per cent by 2030, focusing on key end-use sectors like fertilisers, city gas distribution, power, refineries, and petrochemicals.
"Despite high reliance on imports in the past due to falling domestic production, significant growth in domestic gas output from FY22 onwards along with expected increases in FY24 and FY25 offer hope for reduced import dependency. Regulatory steps to adjust domestic gas pricing, stabilising imported gas prices, adequate LNG capacity in India, and expanding gas pipeline infrastructure are expected to support this shift towards a greater share of natural gas while keeping our import dependency at around 45 per cent of total natural gas consumption by FY26," said Shah.
Due to the restricted production of natural gas within the country, India historically had a high dependence on imported gas. Domestic gas production is expected to improve in the medium term on the back of production ramp-up from discoveries of the recent past along with sizeable new production expected to come on-stream in FY25. The dependence on imports would have been much higher had there been no growth in domestic gas production.
India is envisaged to have robust demand for natural gas from all the major consumption segments viz fertiliser, city gas distribution, power, refineries and petrochemicals. After digesting the shocks of the Covid-19 pandemic and the Russia-Ukraine war, gas consumption in FY24 is expected to be the highest ever in the country, it added.
(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)