India's gas market started to show initial signs of recovery during the latter half of 2015. We expect this momentum to accelerate over the next few years with LNG falling below US$6/mmbtu and domestic gas production stabilising after a five year decline. This will improve capacity utilisation in the gas industry and drive appetite for further infrastructure investments. We forecast gas demand to increase from 48.5 bcm in 2015 to 71.6 bcm in 2020 as the period of low prices encourage infrastructure expansion and natural gas penetration across various parts of India. Longer-term, we forecast gas demand growth to average 4% p.a. to reach 131 bcm by 2035.
Key themes in this update:
Demand recovery could rekindle investments in gas infrastructure projects
Low gas prices caps recovery in gas production in the near term
Chain of upstream reforms could usher a new era of gas market development
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India gas markets long-term outlook 2016
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