LNG Imports Rise as Domestic Gas Production Declines: Shifting Energy Trends in India
India’s natural gas consumption reached 6019 million standard cubic meters (MMSCM) in October 2024, reflecting the growing energy demands of its industrial and urban sectors. The fertilizer sector emerged as the largest consumer, accounting for 29% of the total usage, followed by city gas distribution (CGD) at 21%. In contrast, the power sector’s share dropped to 11%, marking a significant 23% decline compared to the same period last year. Despite the drop in power sector consumption, industrial and manufacturing sectors reported a 11% increase in gas usage, highlighting their robust demand growth compared to October 2023.
Meanwhile, domestic gas production fell by 1.6% to 3111 MMSCM, emphasizing the challenges in maintaining supply. To bridge this gap, LNG imports rose sharply by 10.8% to 2941 MMSCM, reinforcing India’s growing reliance on global gas markets. A total of 5527 MMSCM of natural gas was available for sale in October, representing a 4.2% year-on-year increase.
Market Insight:
The surge in LNG imports and declining domestic production highlight India’s evolving energy landscape, offering significant opportunities for global LNG suppliers to tap into its expanding market. Sectors such as fertilizers and CGD, which together account for half of the country’s gas consumption, remain crucial demand drivers and present stable and promising areas for investment. Conversely, the sharp drop in power sector consumption reflects a shift toward renewable energy sources, signaling a transformation in India’s energy mix.
For market players, this dynamic environment underscores the need to align strategies with high-growth sectors like fertilizers, CGD, and manufacturing, while staying attuned to policy shifts and infrastructure developments. India’s increasing reliance on LNG imports offers a lucrative pathway for exporters, especially as the country strives to balance its domestic supply challenges with its growing energy needs.
