Page 154 - CW E-Magazine (18-2-2025)

Hydrocarbons

ENERGY TRENDS
Industrial demand, shrinking production fuel rise

in Indian LNG imports

Indian liquefi ed natural gas (LNG) supply and purchase agreements (SPAs)
imports totalled a record 26-mpta in for a total of 14.7-mtpa. Spot LNG
2024, accounting for more than half imports almost doubled to more than
of the country’s gas consumption. 110 cargoes during the year to plug the
Demand is expected to continue to grow gap between rising demand and shrinking
in the coming years, exceeding 37-mtpa production. While the contractual LNG
by 2030 and 88-mtpa by 2050, even as volume sat at around 22-mtpa in 2024,
domestic production of gas will shrink, it will surpass 27-mtpa in 2026 with the
according to estimates by analysts at addition of the SPAs signed in 2024.
Wood Mackenzie, a consultancy. for power generation, meanwhile, has The need to sign further long-term
doubled from 2022 levels. Gas has LNG contracts will be key to securing
“By 2032, LNG should account for played a pivotal role in supporting peak supply.
around two-thirds of India’s gas con- load demand during summer heatwaves
sumption and will become third largest since the government enacted an emer- Domestic production set to wane
importer of LNG after China and Japan,” gency provision for the use of gas power Wood Mackenzie expects Indian
the consultancy said. plants. domestic gas production to increase by
4.5% and peak in 2025, then decline by
11.5% demand CAGR from 2022 Although the power segment an average 3.6% annually over the next
to 2024 accounts for a fair share of gas demand, fi ve years, due to structural declines in
LNG consumption saw a whopping gas’s share of the power generation mature fi elds and delays in the develop-
11.5% compound annual growth rate mix is expected to remain fairly modest. ment of new projects. “After 2030, pro-
(CAGR) from 2022 to 2024, thanks India is home to vast amounts of cheap duction is expected to see a 9% annual
to lower prices, a rise in industrial coal, while renewables are highly decline through 2040, driven by the
demand, subsidies for fertiliser sector and competitive, with solar power currently exhaustion of mature fi elds and slower-
changes to pipeline tariff mechanism. available at a 22% discount to coal-fi red than-expected discoveries,” it said.
Industrial gas demand, primarily from generation.
the fertiliser and refi nery sectors, alone The narrative could change, how-
posted a 9% CAGR in 2022-24, according Connectivity opens new LNG ever, if the Oilfi elds (Regulation and
to Wood Mackenzie. markets Development) Amendment Bill intro-
Pipeline connectivity is set to duced in August 2024 is implemented
“Greater gas availability for new unlock new regions for LNG demand, effectively. The bill aims to increase
industrial units and the potential expansion according to Wood Mackenzie. India’s investment in oil and gas exploration
of refi neries and petrochemical plants Petroleum and Natural Gas Regulatory and production. “Key ultra-deepwater
will boost Indian industrial gas demand Board has authorised the construction discoveries, such as UD-1 in the eastern
to around 63-bcm by 2040. Sizeable of 10,800-km of gas pipelines, improving offshore basin, could transform India’s
growth will come from the city gas distri- access to gas in the southern and eastern gas landscape in the future, contingent
bution (CGD) sector, which includes the parts of the country as soon as 2025 and on favourable policies, faster project
transport, residential and commercial 2026 and strengthening regional inter- execution and advanced exploration
segments, as well as small industry. The connectivity. Industries such as steel, techniques,” the consultancy said.
CGD sector’s share of the gas consumption aluminium, chemicals, ceramics and
mix is expected to increase from 25% to glass will boost gas demand for heating Exploration and production blocks –
32% by 2030,” it said. boilers and furnaces. OALP-VIII and OALP-IX – were
tendered in recent licensing rounds, but
Demand for power generation doubles In 2024, Indian LNG buyers sought the participation of private players and
The use of regasifi ed LNG (RLNG) to renew and sign new long-term LNG international oil companies was muted.

154 Chemical Weekly February 18, 2025

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