Natural Gas Market in India
Executive Summary
The Indian gas market is anticipated to experience rapid growth over the next two decades. According to the International Energy Agency (IEA), gas demand is expected to increase at a rate of 5.4% per annum from 2007 to 2030, reaching 132 billion cubic meters (bcm) by 2030. Currently, coal accounts for 37% of India's primary energy supply, followed by biomass and waste at 27%, and oil at 26%. In contrast, natural gas represents only a small portion of the energy mix.
Industry Structure
- History: The Indian gas market has evolved over time, with significant changes in regulatory frameworks and exploration policies.
- Regulatory Entities: Key regulatory bodies include the Oil and Natural Gas Corporation (ONGC) and the Ministry of Petroleum and Natural Gas.
- Regulatory Framework: The regulatory environment has been evolving to support the growth of the gas market, with new policies aimed at increasing exploration and production.
Pricing
- Price Evolution: The pricing of natural gas in India has shown fluctuations due to various factors such as supply constraints and contract agreements.
Domestic Production
- Historical Trends: Domestic production has shown steady growth, driven by advancements in exploration techniques.
- New Exploration Licensing Policy (NELP): The NELP has been instrumental in boosting domestic production, particularly through the NELP VIII round.
- Krishna Godavari KG-D6 Field: This field is one of the largest gas fields in India and has contributed significantly to domestic production.
- Unconventional Gas: The potential of unconventional gas sources is being explored, but it remains limited at present.
Imports
- Imports and Contracts: India relies heavily on imported liquefied natural gas (LNG) to meet its demand, with significant contracts in place.
- Import Infrastructure: The infrastructure for importing LNG is being expanded to accommodate growing demand.
Demand
- Current Consumption and Forecasts: Current consumption is driven by sectors such as power generation, transportation, and industrial processes. Projections indicate continued growth in demand.
- Sectoral Analysis: The demand is analyzed by sector, with power generation being the largest consumer.
Conclusion
The Indian gas market is poised for significant growth, driven by supportive government policies and increasing demand across various sectors. However, challenges remain, particularly in terms of infrastructure development and ensuring a stable supply chain.
Key Data Points
- Expected Annual Growth Rate: 5.4% per annum from 2007 to 2030.
- Projected Demand in 2030: 132 bcm.
- Current Share of Natural Gas: 1.5% of primary energy supply.
- Key Gas Fields: Krishna Godavari KG-D6.
- Import Sources: LNG from various countries.
- Power Sector: Largest consumer of natural gas.
This summary provides a comprehensive overview of the Indian gas market, highlighting key trends, challenges, and opportunities.
