India’s liquefied natural gas (LNG) imports are expected to remain range-bound for the next two years, beginning FY25, on account of growing production of natural gas in the country, ratings agency CareEdge said.
India is envisaged to have a robust demand for natural gas from all the major consumption segments such as fertilisers, city gas distribution (CGD), power, refineries and petrochemicals.
With imported gas prices normalising around $10-$12 per million British thermal units (mBtu) by FY23-end and remaining range bound in FY24, gas consumption has again started its upward trajectory in 9M FY24 and CareEdge Ratings expects India to record its highest-ever gas consumption annually in FY24.
On the back of limited domestic natural gas production, India historically had a high dependence on imported gas. However, during the last three years ending FY23, gas imports declined mainly due to improved domestic gas production and a rise in imported gas prices.
“Going forward, gas imports are expected to increase at a moderate pace in spite of expected growth in domestic production because consumption of natural gas is expected to outpace domestic production. Still, imports as a percentage of total consumption are expected to remain largely range-bound during the next two years, up to FY26,” CareEdge said.
After hitting a high of 92 million standard cubic meters per day (MSCMD) in FY20, LNG imports declined consistently hitting 73 MSCMD in FY24. CareEdge expects imports to hit 82 MSCMD each in FY24 and FY25. It also projects inbound shipments to reach 96 MSCMD in FY26.
With the rise in domestic natural gas production, India’s dependency on imported LNG, which stood at 53 per cent of total consumption in FY21, has gradually declined over the last three years and is expected to remain around 45 per cent by FY26.