**Executive Summary**
This document summarizes the Indian government's efforts to enhance the availability of natural gas for power generation in response to a parliamentary question. Measures include expanding the National Gas Grid and LNG terminals, unified tariffs, and allowing domestic gas producers to sell gas through authorized exchanges. The ultimate goal is to increase the share of natural gas in the country's energy mix and reduce dependence on conventional fossil fuels.
**Key Points / Main Content**
* **Enhancing Natural Gas Availability:**
* Expansion of National Gas Grid to connect domestic gas sources and LNG terminals.
* Introduction of a unified tariff for natural gas.
* Setting up of LNG terminals.
* Domestic gas producers with pricing and marketing freedom can sell up to 500 mmscm or 10% of annual production through authorized gas exchanges.
* **LNG Import Policies:**
* LNG placed under Open General License (OGL) category allowing free import.
* Nil customs duty on LNG imports used for electricity generation by generating companies.
* Gas-based power plants can freely import LNG, generate power, and sell it to customers.
* **Domestic Gas Production Initiatives:**
* Implementation of Hydrocarbon Exploration and Licensing Policy (HELP) shifting to a Revenue Sharing mechanism.
* Policy framework for Coal Bed Methane (CBM) monetization and Discovered Small Field Policy.
* Relaxed processes and approvals to promote Ease of Doing Business.
* Fiscal incentives for early monetization of fields, including marketing and pricing freedom.
* Market price discovery through e-bidding and permission for premium on gas produced from new wells.
* **Gas-Based Power Plant (GBP) Support:**
* Schemes implemented for procurement of power from GBPs during peak demand periods (2023, 2024, 2025) through competitive bidding.
* Minimum Off-take Guarantee (MGO) provided to selected GBPs.
* The PLF of gas-based power plants has increased from 11.4% during 2022-23 to approximately 15% during 2024-25.
* The ministry of Power has issued directions under Section 11 of the Electricity Act for maximization of generation from gas-based stations during the periods 26thMay 2025 to 30thJune 2025 and 1stMay 2024 to 30th June 2024.
**Impact Analysis**
**Stakeholder: Power Plants**
* **Impact:** Enhanced availability and affordability of natural gas for power generation.
* **Action Required:** Leverage new policies for importing LNG, utilizing domestic gas, and participating in power procurement schemes.
**Stakeholder: Domestic Gas Producers**
* **Impact:** Increased opportunities to sell domestic gas at market prices and access new markets.
* **Action Required:** Utilize pricing and marketing freedom to sell gas through authorized exchanges.
**Stakeholder: Consumers/Energy Sector**
* **Impact:** Improved energy security and reduced reliance on conventional fossil fuels.
* **Action Required:** N/A
Key Entities Referenced
Ministry of Petroleum and Natural Gas: The central government ministry responsible for the exploration, production, refining, distribution, marketing, import, export, and conservation of petroleum, natural gas, petroleum products, and liquefied natural gas (LNG).
Ministry of Power: The central government ministry responsible for electricity generation, transmission, distribution, and trading in India.
Liquefied Natural Gas (LNG): Natural gas that has been converted to liquid form for ease of storage or transport.
Electricity Act, 2003: Indian law that consolidates the laws relating to generation, transmission, distribution, trading and use of electricity and generally for taking measures conducive to development of electricity industry.
Hydrocarbon Exploration and Licensing Policy (HELP): Policy of the Government of India for exploration and production of oil and gas with revenue sharing mechanism.
LOK SABHA
UNSTARRED QUESTION No. 1872
TO BE ANSWERED ON 11th December, 2025
AVAILABILITY OF NATURAL GAS FOR POWER GENERATION
1872. Shri Shrirang Appa Chandu Barne:
Smt. Bharti Pardhi:
Shri Ravindra DattaramWaikar:
Dr. Shrikant Eknath Shinde:
पेट(cid:332)ोिलयम और (cid:366)ाकृ ितक गैस मं(cid:361)ी
Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:
(a) whether the Government has taken steps to enhance the availability of natural gas for power
generation and if so, the details thereof;
(b) the quantum of Liquefied Natural Gas (LNG) imported by power plants during 2025-26 and the
trend observed during the last five years;
(c) the major initiatives undertaken to increase the share of natural gas in the country’s energy basket,
including the expansion of the National Gas Grid and LNG terminals;
(d) whether any specific incentives or policy measures have been introduced to boost gas-based power
generation and improve Plant Load Factor (PLF) of gas-based plants, if so, the details thereof; and
(e) the expected impact of these initiatives on energy security and reduction in dependence on
conventional fossil fuels?
ANSWER
पेट(cid:332)ोिलयम और (cid:366)ाकृ ितक गैस मं(cid:361)ालय म(cid:336) रा(cid:475)मं(cid:361)ी
((cid:373)ी सुरेश गोपी)
MINISTER OF STATE IN THE MINISTRY OF PETROLEUM AND NATURAL GAS
(SHRI SURESH GOPI)
(a) to (c) Government have taken various measures to enhancethe availability of natural gas forpower
generation which, inter-alia, includesexpansion of National Gas Grid to connect domestic gas sources
as well as Liquefied Natural Gas (LNG) terminals to the power plants,introducing a unified tariff,
setting up of LNG Terminals, allowing the domestic gas producers who have been granted pricing and
marketing freedom to sell domestic gas upto 500 mmscm or 10% of annual productionfrom their
contract area whichever is higher, per year through gas exchanges authorized by PNGRB, etc.
Further, Government have placed Liquefied Natural Gas (LNG) under the Open General
Licence (OGL) category. This allows buyers to freely import LNG as per their requirement on
mutually agreed commercial terms with suppliers. Government have also made provisions for Nil
customs duty on import of LNG, if it is used for generation of electricity by a generating company as
defined in section 2(28) of Electricity Act, 2003 (36 of 2003) to supply electrical energy or to engage
in the business of supplying electrical energy to the grid. Gas based power plants are free to import the
LNG, generate power and sell it to customers.The quantum of Liquefied Natural Gas (LNG) imported by power plants during 2025-26 and
the year wise growth trend observed during the last five years is as under:
Year Total Gas imported (in MMSCMD) Growth w.r.t. last year (%)
2020-21 11.7 14%
2021-22 7.3 -38%
2022-23 2.8 -62%
2023-24 7.8 179%
2024-25 8.5 9%
2024-25 (Apr-Oct) 13.0 -
2025-26 (Apr-Oct) 9.1 -30%
(Source: Ministry of Power)
Government have taken multiple steps to increase share of Natural Gas in primary energy mix.
These, inter-alia, includes expansion of National Gas Grid Pipeline, expansion of City Gas
Distribution (CGD) network, setting up of Liquefied Natural Gas (LNG) Terminals, allocation of
domestic gas to Compressed Natural Gas (Transport) / Piped Natural Gas (Domestic)
CNG(T)/PNG(D) as priority sector, allowing marketing and pricing freedom with a ceiling price to gas
produced from high pressure/high temperature areas, deep water & ultra-deep water and from coal
seams, Sustainable Alternative Towards Affordable Transportation (SATAT) initiatives to promote
CBG etc..
For increasing domestic gas production, Government of India has notified Hydrocarbon
Exploration and Licensing Policy (HELP) for the award of exploration acreages shifting from
Production Sharing mechanism to Revenue Sharing mechanism. Government further notified policy
framework for early monetization of Coal Bed Methane (CBM) (2017), Discovered Small Field policy
(2018), policy reforms in 2019, where many of the processes and approvals were relaxed to promote
“Ease of Doing Business”, Revenue Share from Category II & III type of basins were removed, except
for windfall gains, 7 years Royalty Holiday for Deep & Ultra-deep blocks, concessional Royalty Rates
for Deepwater and for ultra-deep water blocks, and fiscal incentives have been provided for early
monetization of fields along with Marketing and Pricing freedom for natural gas. Further, Government
in 2020 allowed market price discovery through e-bidding system and in 2023 permitted a premium of
20% over the Administered Price Mechanism prices for gas produced from new well and well
interventions of Oil and Natural Gas Corporation Limited & Oil India Limited from their nomination
fields.
(d) and (e) Ministry of Power has informed that existing Gas-Based Plants (GBPs) in the country
remain underutilised due to the high cost of electricity generation. To meet increased demand during
crunch periods, the Ministry of Power implemented Schemes for procurement of power from GBPs
during peak demand periods in 2023, 2024 and 2025 through competitive bidding. Selected GBPs have
been provided with a Minimum Off-take Guarantee (MGO). During the crunch periods of 2023
(April–June 2023), 2024 (March–June 2024) and 2025 (March–October 2025), energy procured from
the selected GBPs under these schemes was 317 MU, 482 MU and 1,477 MU respectively. This
Scheme, inter-alia, helped in improving the utilization of gas-based assets, provided additional peak
support to the grid, and contributed to maintaining system reliability during periods of elevated
demand. The PLF of gas-based power plants has increased from 11.4% during 2022-23 to about 15 %
during 2024-25.In addition, Ministry of Power have issued directions under Section 11 of the Electricity Act
for maximization of generation from gas-based stations during the periods 26thMay 2025 to 30thJune
2025 and 1stMay 2024 to 30thJune 2024.
Policy initiatives to boost gas-based power generation and improve Plant Load Factor (PLF) of
gas-based plants are expected to strengthen energy security by diversifying the energy mix and
reducing reliance on coal and oil.
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