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MOSL: OIL & GAS: India’s Gas sector benefiting from syzygy ahead

OIL & GAS: India’s Gas sector benefiting from syzygy ahead

 

• Both India and China have been in the same boat, facing poor availability of domestic natural gas. However, the syzygy of: a) strong policies for reducing pollution, b) rise in pipeline infrastructure, and c) availability of natural gas has resulted in China's natural gas consumption rocketing (at 20% CAGR) since the start of the 21st century.
• With: a) the National Green Tribunal (NGT) focusing on reducing pollution, b) 90% rise in the length of trunk pipelines over the next few years, as well as c) increased availability of LNG operable capacity (57%) and availability of domestic gas (~30%), we expect the alignments of the stars - the syzygy - to bode well for India's Gas sector.
• As per our research, GAIL, GUJS, and GUJGA will be the top beneficiaries of the same. 

China firmly on its way to raising the share of natural gas in its primary energy mix to 15% by CY30

• At the start of the 21^st century, natural gas consumption in India, at 72mmscmd, was marginally higher than that in China (69mmscmd).
• However, rising focus on reducing emissions in both Transportation and Industrial segments, resulted in China’s gas consumption growing to staggering 13x in CY00-20.
• India, battling the twin constraints of poor natural gas availability as well as pipeline infrastructure, saw its gas consumption growing to only 2x in the same period. With a 20% CAGR, China’s gas consumption has risen to ~5.5x that of India, a sorry state for India compared with the marginal lead at the start of the century.