India LNG Storage Capacity Boost: How India LNG Storage Capacity Boost Responds to West Asia Supply Crisis

India LNG Storage Capacity Latest News

• India is reconsidering its energy security strategy after disruptions in liquefied natural gas (LNG) supplies caused by the closure of the Strait of Hormuz during the West Asia conflict. 
• The crisis has highlighted India’s limited LNG storage capacity, prompting both the government and industry stakeholders to plan expansions. 
• Petronet LNG stated that the company aims to increase its storage capacity by about 70% by adding new cryogenic tanks at terminals like Dahej, Kochi, and the upcoming Gopalpur facility. 
  • Petronet LNG is India’s largest LNG importer, established in 1998 as a joint venture by major public sector oil companies such as GAIL, BPCL, IOCL, and ONGC. 
  • It handles about 74–75% of the country’s LNG imports and operates key import and regasification terminals at Dahej (Gujarat) and Kochi (Kerala).
• Currently, unlike crude oil, India has minimal LNG reserves, leading to discussions on building adequate stockpiles to better withstand future geopolitical and supply shocks.

Lessons from the Hormuz Crisis: India’s LNG Vulnerability

• Heavy Dependence on Hormuz Route – India relies on LNG imports for nearly half of its natural gas needs, with around 60% of supplies routed through the Strait of Hormuz.
• Supply Disruptions and Immediate Impact – The West Asia conflict led to a near halt in vessel movement through the Strait, resulting in no LNG cargo reaching India from the Persian Gulf for over two months. This severely disrupted supply chains despite efforts to source LNG from alternative markets.
• Rationing and Sectoral Prioritisation – With limited supplies, the government prioritised natural gas for essential sectors like transportation and household use, while curtailing supply to certain industries, highlighting the strain on domestic energy management.
• Inadequate Storage Capacity – India currently has 23 LNG storage tanks, including those operated by Petronet LNG, but these are primarily designed for operational continuity rather than emergency reserves. Each tank holds roughly one shipload, while daily consumption exceeds one tank.

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Expanding LNG Infrastructure: Challenges and Way Forward

• High Cost and Long Gestation Period
  • Building LNG storage tanks is a complex and expensive process because they must be cryogenic, capable of maintaining extremely low temperatures to keep gas in liquid form. 
  • Each tank can take at least three years to construct after approvals, making expansion a long-term effort.
• How LNG Storage and Supply Works
  • Natural gas is cooled into LNG and transported via specialised cryogenic vessels. 
  • It is then stored in cryogenic tanks at terminals, where it is regasified and supplied to consumers through pipelines.
• Pipeline Connectivity as a Key Constraint
  • Beyond storage, inadequate pipeline infrastructure limits the efficient use of LNG terminals. 
  • Some terminals operate below capacity due to poor connectivity, restricting the evacuation of gas to end users.
• Way Forward: Integrated Infrastructure Development
  • Improving pipeline networks alongside increasing storage capacity will enhance utilisation of LNG terminals, strengthen supply chains, and help India build a more resilient energy system against future disruptions.

India’s LNG Import Shift: Diversification Amid Hormuz Disruption

• India’s LNG sourcing saw a sharp disruption in early 2026 as key suppliers like Qatar and the UAE dropped out due to the Strait of Hormuz crisis. 
• Qatar supplies plunged from 1.055 million tonnes in January to 765,000 tonnes in February and just 60,000 tonnes in March before falling to zero in April, marking a 100% decline over three months. 
• Similarly, UAE shipments dropped from 403,000 tonnes in January to 131,000 tonnes in March and to zero in April.

Rise of Alternative Suppliers

• In response, India rapidly diversified its import basket. 
• Countries like Oman, Nigeria, and Angola significantly increased shipments, while new and smaller suppliers such as Mauritania, Australia, Indonesia, Cameroon, and the Republic of the Congo entered the mix. 
• The United States also expanded its role, reflecting a growing reliance on spot LNG markets.
• Overall LNG imports stood at 1.947 million tonnes in April, up from 1.673 million tonnes in March (a 16% rise), but still significantly lower than 2.577 million tonnes in January, reflecting lingering supply tightness.

Source: IE | FE