India is reassessing its energy security strategy following disruptions in liquefied natural gas (LNG) supplies caused by the closure of the Strait of Hormuz during the West Asia conflict. The crisis exposed a critical weakness—limited LNG storage capacity, prompting urgent policy and infrastructure responses.
Background: India’s LNG Dependence
India depends heavily on LNG to meet its energy needs:
- LNG accounts for ~50% of India’s natural gas consumption
- Around 60% of LNG imports pass through the Strait of Hormuz
- Petronet LNG handles 74–75% of India’s LNG imports
- Key terminals: Dahej (Gujarat) and Kochi (Kerala)
Despite this dependence, India lacks strategic LNG reserves, unlike crude oil.
Lessons from the Hormuz Crisis
1. Supply Disruptions
The closure of the Strait halted LNG shipments from the Persian Gulf for over two months, severely affecting supply chains.
2. Sectoral Prioritisation
The government prioritised gas supply for:
- Transport (CNG)
- Household use (PNG)
Industries faced reduced allocations.
3. Inadequate Storage Capacity
- India has only 23 LNG storage tanks
- Each tank ≈ 1 shipload capacity
- Daily consumption > 1 tank per day
➡️ Indicates no buffer for emergencies
Expansion Plans: Strengthening LNG Storage
Petronet LNG plans to increase storage capacity by ~70% through:
- New cryogenic tanks at:
- Dahej
- Kochi
- Upcoming Gopalpur terminal
This marks a shift toward building resilience against geopolitical shocks.
How LNG Storage Works
- Natural gas is cooled to -162°C to form LNG
- Transported via cryogenic ships
- Stored in cryogenic tanks
- Regasified and distributed via pipelines
Challenges in Expanding LNG Infrastructure
1. High Cost & Time-Intensive
- Cryogenic tanks require advanced technology
- Construction time: ~3 years per tank
2. Pipeline Connectivity Issues
- Poor pipeline networks limit gas evacuation
- Some terminals operate below capacity
3. Lack of Strategic Reserves
- Existing tanks are for operational use, not emergency storage
India’s LNG Import Diversification
The crisis forced India to diversify its suppliers:
Decline in Traditional Suppliers:
- Qatar: From 1.055 MT (Jan) → 0 (April)
- UAE: From 403,000 tonnes → 0 (April)
Rise of Alternative Sources:
- Oman, Nigeria, Angola
- New entrants: Mauritania, Australia, Indonesia, Cameroon, Congo
- Increased reliance on USA (spot market LNG)
Import Trend:
- April: 1.947 MT
- March: 1.673 MT (+16%)
- January: 2.577 MT (pre-crisis)
➡️ Recovery is ongoing but supply remains tight
Way Forward: Building Energy Resilience
- Expand LNG storage capacity for strategic reserves
- Develop pipeline infrastructure for better connectivity
- Promote supplier diversification to reduce geopolitical risks
- Integrate LNG strategy with energy security policy
- Encourage PPP investments in infrastructure
Conclusion
The Hormuz crisis has been a wake-up call for India’s energy security. While LNG is crucial for India’s transition to a cleaner energy mix, the absence of adequate storage infrastructure exposes the country to external shocks. Expanding storage capacity, improving pipeline connectivity, and diversifying imports are essential steps toward building a resilient and secure energy future.