India's gas consumption to jump more than 3 times by 2030: GAIL

New Delhi: India's natural gas consumption is projected to rise to as much as 550 million standard cubic meters per day by the end of the decade from about 174 mmscmd now as the user base expands with the inclusion of newer industries such as steel, GAIL (India) marketing director E S Ranganathan said on Thursday.

Speaking at the ETEnergyworld Gas Conclave virtual event, he said the revolutionary move to commit to a net-zero carbon emission by 2070 has strongly showcased the Indian economy's reorientation towards a cleaner and lower emission economy.

"We now have a definitive policy direction towards phasing down of coal from primary energy mix with our targets carefully calibrated to account for India's energy needs. Against this background, gas along with derived products such as blue hydrogen and ammonia will have a greater role to play in starting down the slope from peak emissions to net-zero emission," he said.

While the government is targeting to increase the share of natural gas in the primary energy basket to 15 per cent by 2030 from the current 6.2 per cent, the share of the environment-friendly fuel in the total energy demand is only 2 per cent.

"So the sector will undoubtedly see a strong demand," he said adding the city gas networks that retail CNG to automobiles and piped gas to the household kitchen, have seen consumption exceed pre-Covid levels and will see aggressive growth going forward.

Gas consumption presently is around 174 mmscmd, largely by fertilizer plants, city gas networks and power units. Of this, 49 per cent is met by domestic production and the rest through imports in form of liquefied natural gas (LNG).

"On the supply side, we estimate that the country will reach around 380 mmscmd by 2029-30 with the indigenous production and import of LNG plus biogas also contributing significantly," he said.

LNG, he said, will continue to play a leading role in meeting India's gas requirements in spite of a strong and welcome upswing in domestic production.

The indigenous production has already jumped around 19-20 mmscmd in the last quarter, he said adding LNG import capacity will rise to 40 million tonnes per annum.

Gas demand will be "380 mmscmd on the conservative side and 550 mmscmd on the optimistic side by the end of this decade," he said. "We also estimate the growth of renewable will be an opportunity for gas to grow. Gas being the lowest carbon-emitting alternative to that, so wherever renewable is not there, gas can pitch in so we can have a low carbon-emitting mechanism in place."

India needs Rs 1.6 lakh crore in investments over the next 5-8 years to expand the use of natural gas, including building terminals and laying of pipelines, he said adding major gas demand is expected to come from industries using blast furnaces such as steel, oil refineries, long-haul transport, and heating and cooling requirement.

Demand from city gas is likely to rise to 140 mmscmd in 8 years from 35 mmscmd now while gas use in refineries is expected at 58 mmscmd from about 14 mmscmd now.

On pricing, Ranganathan said there is a need for a long-term "stable and healthy" price of LNG for gas demand to grow.