The natural gas industry is a relatively new entrant in the Indian energy sector, it is on the verge of making significant contribution to the Indian economy and is expected to significantly contribute to reduce Gross Domestic Product - energy elasticity coefficient.

The seven fold increase in natural gas reserves during last twelve years have generated an optimism for future gas discoveries in Indian sedimentary basins. The natural gas production is expected to increase nearly five folds by the turn of century from the present level of eight billion cubic meter per annum. In this paper, an attempt has been made to determine an appropriate pattern for optimal utilization of these large potentials of natural gas resources.

Presently, the priority use of gas, is considered as feedstock in fertilizer sector. The relative scarcity of commercial fuels coupled with the burgeoning energy demand have paved the way for natural gas utilization in other sectors. Systematic analysis has been carried out to determine the competitiveness of natural gas vis-a-vis other fuels/feedstocks in different sectors, taking into account, their historical growth trend.

The analysis indicate about eight fold increase in the deficit of power by the turn of the century which can be economically and efficiently narrowed by the gas based power plants. The major portion of petroleum demand in transport and domestic sectors presently met by import of middle distillates, may be substantially supplemented by natural gas, in future. Case studies for fuel replacement by gas, in these sectors, have also been discussed.

The integrated national development is expostulated by the development, distribution ana diversification of natural gas through a 'National Gas Grid'.


During the last two decades the world energy scenario has witnessed intense consciousness of energy related problems, emergence of new energy imperatives and realization of stellar role that natural gas is poised to play in forthcoming years. Natural gas currently meets about one fifth of the global commercial energy requirements, predominantly because of the large scale use in developed countries.

The emergence of natural gas as energy transition option has far reaching ramifications, particularly, for petroleum deficient developing nations. The historical development of gas industry in developed countries epitomizes the opportunities and challenges that lie before the developing countries. An analytical examination of growth of gas industry delineates the following five phases of development in the western world:

  1. Marketing of gas to small industrial and agricultural consumers in the vicinity of gas finds.

  2. Growth of gas reserves and replacement of small users by large industrial and power consumers.

  3. Development of distantly located gas market construction of transmission and distribution network and supply to domestic sector.

  4. Diversification of natural gas to other industries.

  5. Steady share of gas in total energy scenario.

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