India's Natural Gas Ambitions Held Back by Infrastructure Bottlenecks

India's ambitious plans to increase its share of natural gas in the energy mix face significant physical hurdles. According to the International Gas Union (IGU), despite successfully expanding its capacity to import Liquefied Natural Gas (LNG), India's midstream and downstream infrastructure, specifically pipelines and city gas distribution networks, has not grown at the same pace.

This gap creates a structural bottleneck that prevents the efficient movement of imported gas from terminals to industrial and residential consumers. The IGU report highlights that import facilities alone do not guarantee demand, as regasification terminals often lack high-pressure pipeline connectivity needed to reach remote or coal-heavy industrial regions.

The report notes that this lack of access keeps transportation costs elevated, making delivered natural gas less competitive compared to coal. As long as this connectivity remains limited, the high capital spending on LNG terminals may see lower-than-anticipated utilization rates, impacting the return on investment for infrastructure players.