LNG must compete with coal, solar and batteries to expand in India’s energy mix, say experts
Experts believe that while India is pushing ahead with Liquefied Natural Gas (LNG), it cannot become the country’s dominant fuel and will remain only one part of a diversified energy basket.
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While the Indian government is further pushing the pedal on Liquefied Natural Gas (LNG), industry and experts believe that LNG should be part of India’s energy basket alongside other sources, not a sole major player. Besides, to make its presence felt in the country’s energy basket, LNG will need to compete with other sources of energy that are competitively priced.
Recently, the “VISION 2040 – NATURAL GAS INFRASTRUCTURE IN INDIA” report was submitted to the Petroleum and Natural Gas Regulatory Board (PNGRB). The report is by a high-level expert committee constituted by the PNGRB to chart a long-term roadmap for the sector. The PNGRB has been mandated to develop infrastructure to transport natural gas to consumers across the country. “To accelerate the integration of natural gas into India’s energy mix, transportation infrastructure must be proactively developed ex-ante,” it had said.
Ample global supply
Arjun Murti, Partner — Energy Macro and Policy at Veriten, a research, investing, and strategy firm, told businessline that “LNG supply will not be a challenge as there is lot of supply. There are a lot of new projects that have come up in the USA and Qatar.”
Qatar is obviously closer to India than the US, so it will be less expensive. “However, most LNG contracts today have various destination flexibilityability clauses, so I think, India could buy LNG from the US as well. Flexibility in the sense that it is not necessary that the specific cargo is going to get delivered to India,” he said adding “having said so, I have always been of the view that in India, there’s a lot of coal within the country, and the country is also pursuing solar and batteries, therefore, between these two segments LNG will have to compete if it’s going to grow to be a sizeable portion of the energy demand in India.”
According to Murti, “it seems like India’s going to do a lot of coal. LNG as a domestic fuel will also need to compete with piped gas, solar and batteries. LNG, essentially will be the fourth option.”
On the International Energy Agency’s latest World Energy Outlook 2025 statement that “the dynamics are increasingly shaped by a group of emerging economies, led by Indian and southeast Asia and joined by countries in Middle east, Latin America and Africa “ he said, “I think that is true. I mean, there is significant energy demand growth to come from the countries and regions mentioned.”
Tough price competition
As far as the price-sensitive market of India is concerned, which is heavily import dependent for oil and gas, should politics govern the economics here, he said, “I think for sure focus should be on what is in its interest, what from my vantage point is going to be reliable and affordable energy to meet this growing demand? And that’s going to be from a diversity of sources, so the first choice should be what India has domestically.”
While talking about renewable energy, he said, “we all know no country can be overly reliant to renewables. It is intermittent, so it will be a portion of the mix. We also have another question with renewables — right now China is the dominant manufacturer of the the inputs. So, I expect India to pursue a strategy that looks to diversify its suppliers and not only favour the US or only favour Russia or only favour the Middle East, but to really diversify where it gets its oil and LNG from to supplement its domestic consumption along with whatever amount of solar it generates.”
“I assume India will also focus on trying to develop newer technologies as its demand will continue to grow,” he said.
Published on December 2, 2025
