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Oil and gas major bp has projected that the share of natural gas in India’s primary energy mix will reach 8.6 per cent in 2050 from 5 per cent in 2022 under the current trajectory scenario.
bp’s Energy Outlook 2024 also said that under its net zero scenario, the share of natural gas in primary energy mix of the world’s fourth largest liquefied natural gas (LNG) importer will be even lower at 5.5 per cent by 2050.
Current trajectory (CT) represents the present supply, demand and consumption scenarios in energy, while net zero trajectory (NZ) relates to a scenario that focuses on decarbonisation.
Asked about India’s target of achieving a 15 per cent share of natural gas, bp’s Chief Economist Spencer Dale told journalists, “Share of natural gas increases a little bit, but does not get to 15 per cent. It goes to 7 per cent or 8 per cent. It does not increase significantly.”
This means that the world’s third largest energy consumer might not be able to realise its target to raise the share of natural gas in the primary energy mix to 15 per cent by the end of the current decade.
The numbers are even lower than its last energy outlook report. In the 2023 report, bp had said “the share of natural gas in total primary energy grows in all scenarios, increasing from 5 per cent in 2019 to 7-11 per cent in 2050, supported by industry and heavy road transport demand.”
Crude oil exporting bloc OPEC in its 2023 annual outlook had also projected that India’s share of natural gas in the energy mix is expected to reach just 10.6 per cent by 2045.
Gas consumption
Dale emphasised that the share of natural gas is expected to grow in the country’s primary energy mix aided by consumption from the industry, power generation and transport sectors.
“In quantitative terms, the single most important sector driving the growth in natural gas demand is the industry. Then it’s the power sector, and the third is transport,” Dale added.
The regulatory reforms brought in by the Government have aided in increasing the consumption of gas, Dale further noted.
“I think there is scope to grow natural gas even more in India, particularly in terms of natural gas within industry. I think part of that story is continuing the regulatory reforms that Government has already undertaken so far in India. I’ve been coming to India for many years now, and there’s been huge reforms in terms of gas regulation that are helping to support the growth,” he said.
India’s gas consumption has risen from 137 million standard cubic meters per day (MSCMD) in FY15 to 187 MSCMD in FY24. It consumed 66.63 billion cubic meters (BCM) natural gas in FY24, compared to 59.97 BCM and 64.16 BCM in FY23 and FY22, respectively. Fertilizers, city gas distribution and power are the main consuming sectors.
As per different global outlooks and Petroleum Planning and Analysis Cell’s (PPAC) transition scenario, India’s CAGR growth in energy consumption from 2022 to 2040 is estimated at 3 per cent.
Last month, the International Energy Agency (IEA) revised India’s annual growth rate for gas consumption in 2024 calendar year upwards to 8.5 per cent from 7 per cent earlier on account of rising demand from the power and industrial sectors.
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