LNG Market in India to Grow at 21% Through 2025

Demand for RLNG in India is forecast to increase at a CAGR of 21.6 percent during 2016-2025, due to increasing LNG terminal projects and cost-effectiveness of the fuel compared to other alternative fuels, according to a research report published by TechSci Research.

The report titled ‘India LNG Market Forecast & Opportunities, 2025’ says demand will be driven by sectors such as power, fertilizers, industrial and city gas distribution.

Power sector would the leading demand driver given government’s heightened focus on gas based power projects due to their high efficiency, low gestation period, lower carbon emissions and requirement for less water and land compared to other fuel based power plants.

Various other policies such as ‘Gas Allocation Policy’ have been implemented to encourage use of gas in different end user segments. Other policies that are expected to have a positive impact on the country's LNG market include E-bid RLNG that would help smoothen supply of imported spot RLNG to power plants and fertilizer industries, according to the report.

Government is increasing focus on expansion of gas pipeline infrastructure in the country. As of 30th November 2015, India's pipeline infrastructure was 16,065 km and an additional 11,302 km of pipelines is under construction. In 2015, GAIL (India) Limited accounted for a share of 68.95 percent in India's total pipeline network.

India's oil minister has also stated that India is moving towards being a gas based economy. In an interview given to news agency Reuters, Dharmendra Pradhan said India will cut third off its emissions rate by 2030, partly by boosting the use of cleaner burning fuels. Currently, gas accounts for about 8 percent of India's energy mix, while oil accounts for more than a quarter.