The photo is sourced from libertex.org
In 2022, India was consuming 196 mcm of gas per day, but by 2050 the gas consumption may reach 650 mcm per day, which is comparable to the demand for gas in the industrial sector of the USA (655 mcm per day in 2022). Such growth of demand will be underpinned by the production of nitrogen-based fertilisers (urea, ammonium nitrate), where natural gas is the key feedstock. In its turn, the demand for fertilisers will be growing due to urbanisation, which will be creating additional incentives for improving productivity in the agricultural sector.
In China in 2022 urban residents accounted for 64% of the total population, while as in India – only for 36%. The increase of the number of urban residents will require improving the plant crops yields growth. In will be impossible to achieve it without broader application of mineral fertilisers. The indirect evidence of this is the fac that over the recent years India was ramping up the imports of nitrogen-based fertilisers. For example, in 2018 it imported 5.9 mln tons, while as in 2022 – 10.9 mln tons, according to the Trade Map resource, the aggregator of the customs statistics.
Electricity generation will be another important driver of the demand, as natural gas is a more environmentally friendly alternative to coal, which currently accounts for over 70% of the generation mix. According to Global Energy Monitor, the cumulative operational capacity of Indian gas-fired CHPPs makes 27.9 GW, 3.7 GW projects are either at the construction or pre-investment stage. However, due to the mountains in the north of India, the imports of natural gas via pipelines is difficult. Hence, to supply gas to its HPPs, India will have to be based mostly on importing liquefied natural gas (LNG). As of today, 8 LNG regasification terminals with the cumulative capacity of 47.5 mtpa are operating in the country, and 6 terminals for 25 mtpa are in the process of construction.
The growing internal demand will be partially covered by domestic production of natural gas: according to the EIA forecast, gas production in India will grow from 92 mcm per day in 2022 up to 255 mcm per day in 2050. However, the LNG imports will continue to play the key role in gas supplies to the country.
