Indian oil and gas market size

Indian oil and gas market analysis

The Indian oil and gas market size is expected to grow from 36.24 billion cubic meters in 2023 to 46.69 billion cubic meters in 2028, with a CAGR of 5.20% over the forecast period (2023-2028). The market has been negatively impacted by the COVID-19 outbreak due to regional lockdowns and lower demand for refined petroleum products. The market has since rebounded to pre-pandemic levels. Factors such as increasing gas pipeline capacity and increasing demand for petroleum products are expected to drive the Indian oil and gas market during the forecast period. In addition, the oil and gas market is a major industry in the energy market and plays an influential role in the global economy as the world's main fuel source. The processes and systems involved in producing and distributing oil and gas are complex, capital intensive, and require state-of-the-art technology. However, India is heavily dependent on imported crude oil and gas to meet domestic demand, and high volatility in crude oil prices is expected to hinder the growth of India's oil and gas market. Important gas hydrates have been discovered in KG Basin. Economically viable gas hydrate extraction could create huge opportunities for companies, which could lead to a boom in gas production.

The downstream sector is expected to see significant growth

India's energy demand is expected to grow by 50% over the next two decades. This increase in demand can be attributed to the growth of the world population and the improvement of living standards in developing countries. Despite the growing popularity of new and renewable energy sources around the world, petroleum fuels remain the dominant source of energy worldwide. This trend is expected to continue in the coming decades, favoring the growth of downstream markets for oil and gas. New oil refineries will be built across the country. For example, in February 2023, Hindustan Petroleum Corporation (HPCL) announced that it planned to start up its 9 million tonne per annum Barmer refinery and petrochemical project in Rajasthan by January 2024. The country's refinery throughput in the financial year (2021-2022) was 249.22 million metric tons, an increase from the 2017 figure, which was about 233.97 million tons. The added value is a conclusion of the high demand for transportation fuels such as motor gasoline and diesel and the continued high demand for LPG in the residential sector of the market. Another major factor leading to the need for high refining capacity is the increase in the number of oil fields in the country, especially in the Krishna-Godavari Basin and Barmer region of Rajasthan. High gas production from these fields has led to the expansion of the capacity of the country's refineries and petrochemical complexes. Due to the upcoming launch of several major projects, the downstream sector is expected to see significant growth during the forecast period.

Increased investment in the midstream sector is likely to drive the market

Due to increased investment in the country's upcoming pipeline, the pipeline is the most economical way to transport natural gas, crude oil and petroleum products over long distances. The midstream segment is expected to account for a significant share of the Indian oil and gas market in the coming years. As of March 2022, the country has about 10,419 km of crude oil pipelines (onshore: 9,825 km, offshore: 594 km), 17,389 km of natural gas pipelines (onshore: 17,365 km and offshore: 24 km) and 14,729 km of product pipelines operated by IOCL, BORL, Cairn India, OIL, HMEL and ONGC. In addition to the pipeline, India has five more LNG terminals by March 2022. In February 2022, the Indian government announced that it would double its oil and gas exploration area to 500,000 square kilometers by 2025 and to 1 million square kilometers by 2030, with a view to increasing domestic production. As of June 30, 2022, the Gas Authority of India Limited (GAIL) holds the largest share of the country's gas pipeline network at 33,815 km. As of 2022, Indian oil companies account for 50.88% (15,113 km) of India's crude oil pipeline network. The Indian government will invest $9.97 billion to expand the natural gas pipeline network across the country and ultimately achieve market growth. In March 2022, Indian Oil Corporation (IOC) Limited approved an investment of $932.6 million for the development of a City Gas distribution (CGD) network in nine geographic regions. As a result, increased investment in the midstream sector is driving the Indian oil and gas market. Pipeline coverage is expected to increase significantly during the forecast period, with petroleum products pipelines expected to grow the most in this segment.

Overview of India's oil and gas industry

India's oil and gas market is fragile. Some of the major players (in no particular order) include OIL and Gas Corporation (ONGC), Oil of India Limited (OIL), Reliance Industries, Oil of India Limited (IOCL) and Punj Lloyd Limited, among others.

Indian Oil and Gas market news

In March 2023, Indian Oil Company Limited announced that it would invest $742 million to build a petrochemical complex in Paraddeep, Orissa. In January 2022, Adani Total Gas Limited (ATGL), a joint venture between Adani Group and Total Energy, received a license to expand its City Gas Distribution (CGD) network to 14 new geographic areas with an investment of $243 million.