India's Gas Push Hinges on Infrastructure Overhaul

India's plans to increase natural gas consumption depend more on fixing infrastructure and market bottlenecks than building additional LNG import terminals, according to a recent report by the International Gas Union (IGU). The sector's growth will ultimately depend on combining cheaper global LNG with stronger domestic infrastructure, competitive transport tariffs, and easier market access.

The IGU calls for greater investment in transmission and distribution pipelines, gas-intensive industries, and reforms to pricing, transport tariffs, and terminal access. India has significantly expanded its LNG regasification capacity but has not kept pace with pipeline network investments, leaving several terminals underutilized and limiting gas consumption in regions where connectivity is sparse.

The recent disruption around the Strait of Hormuz highlighted India's dependence on imported LNG and liquefied petroleum gas (LPG), particularly supplies originating in the Gulf. The IGU said a well-supplied global market could put downward pressure on LNG prices once shipping disruptions ease, but India must make its domestic gas market flexible enough to take advantage of short-term declines in international LNG prices.