New Delhi, Aug 28 : The global liquified natural gas (LNG) markets are now heading towards significant supply glut, which is set to benefit India as significant capacity addition amid expectation of modest demand growth in the global consumption will keep the LNG prices under check, a report said on Wednesday.

Consumption in India is expected to grow by 6-8 per cent YoY in FY2025, supported by softer LNG prices and an uptick in the domestic gas production, according to the report by credit rating ICRA.

Globally, about 193 million metric tonne (MMT) of the LNG production and liquefaction capacity is slated to be added over the course of the next four years.

The report highlighted that after two volatile years in terms of natural gas supplies and pricing, the global LNG markets are now heading towards significant supply glut with large capacity additions planned from CY2024 to CY2028.

'Global natural gas consumption is expected to witness modest growth, given the focus of the major natural gas consumers in regions of European Union, Japan and Korea towards other sources of energy,' said Girishkumar Kadam, SVP and Group Head, Corporate Ratings, ICRA.

India thus stands to benefit in terms of availability of LNG at reasonable prices over the medium term, notwithstanding the near-term volatility amid geo-political tensions in West Asia, he mentioned.

India's gas consumption, after witnessing headwinds in FY2023 owing to the elevated LNG prices, recovered sharply to 187.9 mmscmd (million metric standard cubic meters per day) in FY2024 (17 per cent increase YoY) with easing of LNG prices.

In India, the growth is supported by the City Gas distribution (CGD) sector, followed by the refineries' offtake, said the report.

The increasing adoption of electric vehicles in the passenger vehicle and bus segments will remain key threats for the CNG offtake.

Going forward, domestic gas production will witness marginal growth over the course of FY2025 and FY2026 with the ramp up of production from ONGC's 'KG-98/2 basin' in Q4 FY2025 and on-streaming of few stranded gas production fields.

However, since domestic production is expected to start moderating from FY2028 onwards, the reliance on LNG would further rise as India looks to increase the share of natural gas in the energy mix, the report mentioned.

/IANS