GAIL (India) is stepping up long-term LNG sourcing and preparing to invest around ₹10,000 crore annually in pipeline infrastructure, positioning itself for a sharp rise in India’s natural gas demand over the next five years.
The company is actively expanding its gas procurement portfolio even as official projections point to a strong demand upcycle driven by industrial expansion, city gas distribution expansion and improving price competitiveness of natural gas.
Citing an independent demand study by the Petroleum and Natural Gas Regulatory Board (PNGRB), GAIL Director (Finance) Rakesh Kumar Jain said India’s gas consumption is projected to rise to 297 million standard cubic metres per day (mmscmd) by 2030 under a conservative “good-to-go” scenario, and up to 365 mmscmd under an accelerated growth case.
“Even under the base scenario, demand rises nearly 50% from current levels. With enabling reforms such as GST inclusion and improved pricing dynamics, consumption could scale much faster,” Jain said.
To meet the anticipated surge in demand, GAIL is increasing its long-term LNG commitments. The company currently manages a gas portfolio of 16.5 million tonnes per annum (mtpa) and expects to expand this by at least 5–7 mtpa by 2030.
“We are currently in the market for sourcing around 0.75 mtpa, roughly 12 LNG cargoes per year, with contract tenures of up to 10 years. We will lock in supplies based on the most competitive prices available,” Jain said.
GAIL already maintains a diversified supply mix, including a 4.5-mtpa LNG agreement with Qatar extended until 2048, a 5.8-mtpa US LNG portfolio valid through 2038, and several medium-term contracts.
“There is strong interest from global producers and portfolio players across the US and West Asia. We are geography-agnostic — our objective is to secure the cheapest energy for the country,” he added.
Infrastructure Backbone
On the infrastructure front, GAIL is significantly accelerating its capital investment programme. The company currently operates about 19,000 km of pipelines, forming the backbone of India’s 25,000-km national gas grid.
“In FY26, we expect pipeline capex of around ₹10,000 crore, and similar levels in FY27 depending on project approvals,” Jain said.
Key projects include dedicated pipelines for petrochemical feedstock movement, refinery connectivity such as the Vijaypur–Bina corridor, expansion of existing trunk networks, linkages to Jammu, and the ₹5,300-crore capacity-doubling of the Jamnagar–Loni LPG pipeline.
GAIL is also evaluating new pipeline projects recently bid out by the Petroleum and Natural Gas Regulatory Board.
Jain said the global LNG market is expected to become more favourable for India from 2027 onwards, when significant new liquefaction capacity comes on stream in the US, West Asia, and other regions.
“These new capacities will put pressure on LNG prices. Lower prices will be a major catalyst for expanding gas consumption in India,” he said.
On clean energy initiatives, GAIL has commissioned a 110-MW PEM-based green hydrogen pilot plant, though large-scale commercial deployment will depend on meaningful cost reductions.
Navigating Volatility
“Green hydrogen production costs remain high at present. Until economics improve substantially, scaling up is not viable,” Jain said.
With demand projections rising sharply and infrastructure expansion gathering pace, GAIL expects India’s gas market to enter a structurally stronger growth phase in the coming years.