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ES Ranganathan explains India’s surge in natural gas demand in 2024: Petrochemicals, energy and industrial sectors driving growth

ES Ranganathan mentions, “The rising demand for natural gas highlights the critical need for a robust and forward-looking energy policy framework in India.”

New Delhi (India), May 31: In 2023, India saw a remarkable increase in demand for natural gas, marking a major milestone in the country’s energy landscape. According to industry expert ES Ranganathan, former managing director of IGL, this growth trajectory will continue in 2024, driven by strong demand in the petrochemical, energy, refining and industrial sectors.

“In 2023, India’s natural gas demand increased to 64 billion cubic meters, a 5% increase compared to the previous year,” says ES Ranganathan. This growth highlights the growing importance of natural gas in India’s energy mix, driven by the country’s growing economy and the push for cleaner energy sources. The petrochemical industry in particular is a significant driver of this demand, using natural gas as a feedstock for a variety of chemical processes. “Similarly, the power generation sector is increasingly relying on natural gas as a cleaner alternative to coal, helping to reduce greenhouse gas emissions and improve air quality,” adds ES Ranganathan.

Implications for energy policy

The surge in demand for natural gas highlights the critical need for a robust and forward-looking energy policy framework in India. To sustain this growth and meet future demand, significant investment is needed to develop infrastructure, including pipelines, storage facilities and distribution networks. “Well-defined policies will also encourage domestic production, reducing import dependence and increasing energy security. Moreover, aligning energy policy with environmental sustainability goals is crucial, ensuring that growth in natural gas consumption does not jeopardize India’s commitment to reducing greenhouse gas emissions,” says ES Ranganathan.

Opportunities and challenges

The increase in demand for natural gas creates numerous opportunities for the Indian economy and energy sector. Increased use of natural gas can lead to increased economic activity, job creation and improved energy security. Additionally, natural gas serves as a key bridge fuel in the transition to renewable energy sources, offering a cleaner alternative to coal and oil.

“However, this growth also poses significant challenges. Infrastructure development must keep pace with growing demand, which requires significant investment and coordination between the public and private sectors,” says ES Ranganathan. To ensure the affordability and competitiveness of natural gas, pricing mechanisms need to be addressed. In addition, managing the environmental impact, in particular methane emissions associated with the production and distribution of natural gas, remains a key issue. To mitigate these environmental challenges, an effective regulatory framework and technological innovation will be necessary.

Future prospects

Demand for natural gas in India is expected to remain strong in the future, driven by continued economic growth and the continued shift to cleaner energy sources. Government initiatives such as the National Gas Network and the Municipal Gas Network are likely to play a key role in facilitating this growth. Moreover, the growing use of natural gas in the residential and transport sectors will further increase demand.

For policymakers, industry stakeholders and investors, navigating this changing energy landscape will require a balanced approach that addresses both opportunities and challenges. Strategic infrastructure investments, a supportive policy framework and a commitment to environmental sustainability will be key to realizing the potential of natural gas as a vital component of India’s energy future.

In conclusion, ES Ranganathan mentions: “The growing demand for natural gas in India highlights the dynamic nature of the country’s energy sector. With significant contributions from the petrochemical, power, refining and industrial sectors, natural gas will play an increasingly important role in India’s energy mix.” As the nation pursues economic growth and environmental sustainability, a comprehensive and forward-looking approach will be essential to harness the full potential of natural gas in powering India’s energy transformation.