Why is India pushing piped gas now? | Explained

The story so far:

India has a total of 33 crore LPG connections. Recently, Anjan Kumar Mishra, Secretary at the Petroleum and Natural Gas Regulatory Board, said that domestic natural gas production alone could cater to 30 crore connections if all were to switch to piped natural gas (PNG).

What is the difference between LPG, LNG, PNG, and CNG?

LPG is a co-product of oil refining and natural gas processing. That is, its production depends on the processing of both crude oil and natural gas.

Liquefied Natural Gas (LNG), as the name suggests, is natural gas that has been cooled to below –160 degrees Celsius to turn it into a liquid for shipping. Liquefaction reduces its volume by 1,000 times.

Compressed Natural Gas (CNG) is primarily used as a vehicular fuel. It involves compressing natural gas to a pressure of 200-250 kg/cm² (g) to reduce its volume and enable efficient distribution.

How are LPG and natural gas transported to the user?

Propane and butane gases are mixed, pressurised, and cooled to below 40 degrees Celsius, and then transported from the source to consuming countries via ships. LPG is bottled in cylinders and physically delivered to customers.

Piped natural gas is transported through pipelines. Before this, imported natural gas is liquefied and transported through LNG carriers. “LNG carriers use special cargo tanks and insulation systems designed for ultra-low temperatures,” stated Mitsui O.S.K. Lines to The Hindu. “Put simply, the basic task is to move a very cold liquid onto the ship while preventing it from warming up too much.”

At the destination, LNG is regasified and transported to the final consumer through pipes.

Last-mile delivery of LPG is easier through cylinders that are transported through trucks and tricycles than building an extensive pipeline network covering every household for natural gas. This has been a key reason why India adopted LPG for domestic cooking.

Why the push for piped gas against LPG now?

India’s dependence on LPG imports is currently higher. For instance, in natural gas, India’s one-year import was about 27 million tonnes of LNG last year, and production was roughly the same, according to government data. On the other hand, India — until recently — imported three-fifths of its LPG requirements, of which 90% was routed through the Strait of Hormuz, which has now been blocked due to the war in West Asia. Typical annual LPG consumption is 34 million tonnes, out of which 12 million tonnes are produced in India.

If gas is to be imported, LNG has many more sources across the world. In LPG, India was largely reliant on Saudi Arabia and Qatar and the supplies had to pass through the Strait to reach India. “Globally large capacities of liquefaction plants for natural gas are coming online over the next few years, so availability should be healthy,” said Prashant Vasisht, Senior Vice President of ICRA.

Can natural gas replace LPG straight?

Natural gas is much lighter than LPG. But one kilogram of natural gas can deliver more energy than one kilogram of LPG. For cooking purposes, these differences are not significant, making PNG a drop-in replacement for LPG.

However, in industrial uses, the equipment may need to be tuned to a different setting or even altered. For instance, LPG is widely used by MSMEs for welding and cutting. Reports from the ground indicate that while the government is encouraging industrial users to switch, a lack of awareness and technical know-how may hamper adoption.

How is the government pushing for natural gas?

On March 26, The Hindu learnt from senior government officials that over the next two weeks, India could add another 15 lakh new PNG connections.

The official said that instituting last-mile connectivity amidst unfavourable city infrastructure in certain areas was among the major hurdles in expanding the piped gas network.

To speed it up, in a gazette notification, the Centre instituted provisions to help accelerate the uptake, which, among other things, included specific timelines for approving pipeline expansion in housing and non-housing areas.

The Ministry of Petroleum and Natural Gas (MoPNG) told the Parliamentary Standing Committee, which is assessing its demand for grants for FY 2026-27, that it is targeting to have in place a pipeline network that would cover 12 crore PNG connections by 2034.

The committee, in an earlier report, had asked the Ministry to help City Gas Distribution (CGD) entities to overcome difficulties in pursuing expansion, such as in obtaining permissions, land, bidding criteria, and NOC requirements from local authorities.

Across towns and cities, such as in Maharashtra or Coimbatore in Tamil Nadu, where the GAIL pipeline runs close, the government is now pushing for piping infrastructure for local distribution.

As of December, the government announced that India’s gas pipeline network spans about 25,000 kilometres, with an additional 10,500 kilometres under construction. The government is also ensuring that PNG pricing remains competitive with LPG.

“PNG connections have now crossed 1.5 crore. A recent government gazette notification reinforces this direction, mandating that households cannot hold both LPG and PNG connections. As a result, roughly 6 million households will be required to surrender their LPG connection and transition fully to PNG within a three-month timeframe. This will bring total household PNG connections to 2 crore soon,” said Manish Sejwal, Senior Vice President at Rystad Energy. “Since the 2020-21, the compounded annual growth rate in connections has been some 18%. A CAGR of 24% would be needed to reach 12 crore connections by 2034-35,” he added.

What are the challenges?

The GAIL pipeline network is currently concentrated in western and northern India, with some coverage in Kerala and Bengaluru. The 10,000-kilometre-plus pipelines under construction cover tier-2 and tier-3 cities in parts of central and eastern India, as well as some parts of Tamil Nadu connecting to the Bengaluru leg, and one section going to the northeast. However, large regions in central, southern, and northeastern India remain uncovered. Further, the alignment of the gas pipeline network is more intended to serve industrial needs than households.

The government has aggressively given CGD licences that would cover more than 300 geographical areas covering households, small industries, hotels and restaurants. As of now, some 90 of them are still not connected to the main trunk pipeline. Last-mile connectivity remains an immediate challenge.

Even if projections of 12 crore PNG connections are met in another 10 years, LPG connections will still be more than 20 crore, leaving India requiring to import significant amounts of LPG.

A little less than 30% of natural gas use goes into making fertilizers, while power plants account for 13% and city gas distribution around 20%, said ICRA’s Mr. Vasisht. Some 35% goes to sectors like refineries and industries.

A major diversion from these sectors such as power may be needed to cater to cooking gas demand. Mr. Vasisht said industrial consumers can switch to naphtha and furnace oil.

PNGRB secretary Mr. Mishra had said that as of now some 1.2 crore PNG connections consume three million metric standard cubic metres of gas every day.

To supply 13 crore connections, India will have to increase domestic production by at least one-third.

Industry observers say that an increase in domestic production from Oil and Natural Gas Corporation (ONGC) fields is possible. Rystad Energy projects a 25% increase.

For instance, ONGC commenced production in the KG-DWN 98/2 Block in the KG basin in 2024. Peak production of the field is expected to be over 10 million metric standard cubic metres per day  of gas, which would mean increasing today’s overall gas production in India by 10%. Site officials expect the 98/2 block to increase ONGC gas output by 15% through more wells. Increasing imports through LNG may well be required if natural gas consumption is ramped up. India has some nine import terminals covering both coasts.

It will have to truly ramp up the pipeline network to leverage the imports. Further, India’s LNG system is even more of a just-in-time system than LPG, with little long-term storage, unlike in Europe. Any disruption in imports will have an immediate impact on availability.

(With inputs from Saptaparno Ghosh and Appala Naidu)