February 15, 2024 [Oil Price]- India’s industry expansion and rising oil refining to meet higher fuel demand are set to drive a tripling of the country’s natural gas consumption by 2050, the U.S. Energy Information Administration (EIA) said on Wednesday.
In 2022, India’s natural gas consumption amounted to 7.0 billion cubic feet per day (Bcf/d), with over 70% of the demand coming from the industrial sector. By 2050, India’s natural gas consumption is set to more than triple to 23.2 Bcf/d, according to EIA’s estimates.
Among India’s five consuming sectors, the industrial sector’s share of gas consumption will grow the most, rising to 80% of total consumption, followed by the transportation sector rising to 10%.
India’s gas consumption in oil refining is expected to grow significantly to keep up with India’s domestic demand for oil products, the EIA notes. By 2050, gas consumption will surge by more than 250% for the production of basic chemicals and by more than 400% for refining, with the two industries together accounting for about 79% of India’s industrial natural gas demand in 2050.
India is boosting its refining capacity. The country should add 1.12 million bpd to its current total each year until 2028, a junior oil minister told India’s parliament at the end of 2023.
Total Indian refining capacity is expected to increase by 22% in five years from the current 254 million metric tons per year, which are equal to around 5.8 million bpd, Rameswar Teli said.
Per the EIA forecasts, India’s gas demand – buoyed by oil refining and other industrial production – is expected to grow at an annual rate of 4.4% by 2050, more than twice the 2.0% annual growth rate of gas consumption in China, the next-fastest-growing country.
India’s economy is growing faster than all other major economies, and so is its demand for energy.
All forecasters expect India to replace China as the biggest driver of global oil demand growth in the long term, which should happen before 2030.
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