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India’s gas demand to rise by 66% in 5 years

Elara Securities said in a recent report that India’s gas demand is at an inflection point and expected to rise 66% from 148 million standard cubic meters per day in 2018-19 to 250 mmscmd by FY25. The report also noted that the bulk of the incremental demand will come from city gas distribution (CGD) operations being rolled out in 400 districts.

The study also said that “We expect LNG prices to remain weak over the next 2-3 years, due to an estimated 47 million tonnes of new LNG supply addition over the calendar year 2020-21 and subdued China LNG demand growth on rising local gas production and commissioning of 104 mmscmd Russia-to-China gas pipeline.”

The crash in LNG prices comes at a time when the government is looking to push for greater use of environment friendly fuel in the country. The government has already been taking measures to facilitate this. Petroleum and Natural Gas Regulatory Board (PNGRB) issued CGD licenses for 232 geographical areas (spread across 407 districts in 27 states) in two bid rounds over the last two years.