India stands at the threshold of a transformative shift in its energy sector with the ambitious vision of a unified gas grid, a nationwide network to integrate gas pipelines. The Government of India has set an ambitious target to increase the share of natural gas in the country’s energy mix from 6 per cent to 15 per cent by 2030. This initiative seeks to lower greenhouse gas (GHG) emissions, diversify the energy portfolio, and transition to cleaner alternatives to coal and oil, reflecting India’s commitment to sustainability and climate goals. Achieving this target is expected to significantly reduce carbon emissions, improve air quality, and enhance energy security, positioning natural gas as a bridge fuel in the country’s energy transition journey.
Existing network
India’s natural gas pipeline infrastructure continues to expand rapidly, playing a crucial role in enhancing energy accessibility and supporting the nation’s transition to cleaner fuels. As of September 2024, 33,475 km of natural gas pipeline length has been authorised, while 24,945 km is operational and more than 10,000 km is
under construction.
As of June 2024, key contributors for common carrier natural gas pipeline network include Gas Authority of India Limited- GAIL, which operates 15,919 km of the network, followed by Gujarat State Petronet Limited (GSPL) (2,722 km), Pipeline Infrastructure Limited (PIL) (1,483 km), and Indian Oil Corporation Limited (IOCL) (1,223 km). Other operators like Assam Gas Company Limited (AGCL), Rajasthan State Gas Limited (RGPL), Gujarat Gas Limited (GGL), and Oil and Natural Gas Corporation (ONGC) add smaller but significant lengths to the overall infrastructure. In terms of capacity, the operational pipelines collectively offer a capacity of 398.90 million metric standard cubic metres per day (mmscmd), with GAIL leading at 233.20 mmscmd. GSPL contributes 43 mmscmd, while PIL and IOCL provide 85 mmscmd and 20 mmscmd, respectively. Additional contributions come from smaller operators, including AGCL (2.40 mmscmd), RGPL (3.50 mmscmd), and ONGC (6 mmscmd).
Further expansion is underway, with 5,630 km of pipelines currently under construction, promising an additional capacity of 42 mmscmd. This includes 2,605 km by GAIL and smaller sections from GSPL, IOCL, and others. These expansions aim to enhance connectivity across underserved regions and strengthen India’s national gas grid.
Moreover, the existing infrastructure is predominantly concentrated in the western and northern regions, anchored by major terminals such as Dahej [Petronet liquified natural gas-(LNG)], Mundra (GSP), Hazira (Shell India), and Dabhol (GAIL), which serve as critical hubs. However, the eastern and southern regions remain largely unconnected to the national gas grid. Expanding the pipeline network to these areas is vital to ensure balanced regional coverage, address existing disparities, and realise the vision of a truly unified gas grid for the country.
Recent trends
After nearly a decade of stagnant demand in the country, natural gas consumption surged by 12.5 per cent during April-October 2024 surpassing the previous peak recorded in 2011-12. This renewed growth follows challenges such as declining domestic production, international price volatility, and competition from cheaper, lower-quality fuels. Major demand drivers include sectors like fertilisers, city gas distribution (CGD), power, petrochemicals, and refineries, with CGD emerging as the fastest-growing segment, achieving a CAGR of 12 per cent over the past decade. The cumulative natural gas consumption from April-October 2024 stood at 43,033 mmscm, reflecting an 11.2 per cent increase compared to the corresponding period of the previous year. This growth is primarily driven by sectors such as power generation, fertiliser production, and urban city gas systems. The cumulative gross production of natural gas of 21,271 mmscm from April-October 2024 was higher by 1.10 per cent compared with the corresponding period of the previous year.
Technological advancement
Technological advancements are playing a crucial role in the development of the unified gas grid. Smart pipelines equipped with Internet of Things (IoT) sensors and supervisory control and data acquisition (SCADA) systems enable real-time monitoring and predictive maintenance, ensuring operational efficiency. Technologies such as pipeline integrity management using advanced pigging tools and remote monitoring systems are enhancing safety and reducing leakage risks. The deployment of digital twins—virtual models of pipeline networks—allows for simulation and optimisation of operations, enabling proactive management of challenges. The integration of artificial intelligence (AI) and machine learning (ML) technologies in exploration and production processes, as well as in pipeline integrity management systems, has improved efficiency and safety.
For instance, Adani Total Gas Limited (ATGL) has taken significant strides toward digitalisation with the development of the “SOUL platform,” designed to standardise and automate various operations across its business verticals. This innovative platform represents a unique shift from traditional applications to a comprehensive digital business framework, seamlessly integrating ATGL’s operations in CGD, electric vehicles, and biomass sectors. Additionally, ATGL has implemented forward-thinking digital initiatives, such as the “No Automation No Operation” policy, to accelerate digital adoption across its internal processes and management systems.
Challenges
Despite these advancements, India’s natural gas sector faces several hurdles that hinder its growth and competitiveness. The exclusion of natural gas from the goods and service Tax (GST) regime leads to a multi-tax structure, causing cascading taxation and reducing its cost competitiveness compared to alternative fuels. Limited availability of domestic gas results in higher and volatile prices for non-residential consumers, further dampening its appeal. Private sector participation in midstream operations is minimal, as government public sector units (PSUs) dominate the common carrier pipelines. Economic viability remains a challenge due to factors such as competition from cheaper renewable energy sources and risks associated with volume guarantees for pipelines. Additionally, public opposition, land acquisition issues, and high dependence on expensive imported gas contribute to project delays, cost overruns, and inadequate infrastructure development, underscoring the need for stable policy interventions and a uniform tax regime.
In sum
For India to achieve its ambitious target of increasing the share of natural gas in the energy mix by 2030, a radical change is essential across all sectors. This requires a strategic blend of policy interventions, tax rationalisation, fiscal and non-fiscal incentives, long-term gas sourcing contracts, and stricter enforcement of pollution and air quality standards. Industry reports suggest that supporting micro, small, and medium enterprises (MSMEs) with incentives such as direct benefit transfers could encourage the adoption of natural gas, unlocking an additional potential demand of 100 mmscmd. The adoption of advanced technologies like smart gas meters will further streamline demand forecasting and prevent redundancies, aligning with India’s push towards automation and digitalisation.
Significant progress is being made under the “One Nation One Gas Grid” initiative, with plans to expand the gas pipeline network from the current 24,000 km to 35,000 km in the coming years. New LNG import terminals in states such as Gujarat, Odisha, and Andhra Pradesh are being established to boost the country’s LNG handling capacity and ensure a steady supply of natural gas. The government is also focusing on enhancing private sector participation by providing financial viability funding and implementing policy reforms aimed at simplifying regulations, improving ease of doing business, and offering fiscal incentives to stimulate exploration and production. With subsidies, infrastructure incentives, and the push to bring natural gas under the GST regime, India is poised to build a strong foundation for a gas-based economy, ensuring sustainability and growth in the energy sector.
