Concept Note
Strengthening India’s Energy Security through a Decentralized Strategic LNG Storage Network using Mini LNG Terminals
31st March, 2026
Submitted to:
Ministry of Petroleum & Natural Gas
Government of India
Submitted by:
INOX India Ltd, Vadodara, Gujarat.
Executive Summary
India’s economic growth and industrial expansion are increasing the country’s reliance on imported natural gas and liquefied natural gas (LNG). However, recent geopolitical disruptions in West Asia have exposed vulnerabilities in India’s LNG supply chain. Supply constraints caused by conflict and shipping disruptions have already forced gas allocation adjustments and industrial curtailments in India.
India currently lacks strategic reserves for LNG similar to its crude oil strategic petroleum reserves, making the gas economy particularly sensitive to external shocks.
In response to recent supply disruptions, policymakers have begun evaluating the creation of strategic LNG reserves and expansion of LNG storage capacity.
This white paper proposes a complementary solution:
A decentralized network of Mini LNG Terminals across India’s coastline that can act as distributed strategic LNG storage hubs.
Unlike conventional LNG terminals that require 5–10 years to develop, mini-LNG terminals can be deployed within 15–18 months, enabling rapid creation of strategic LNG storage capacity.
Such infrastructure built around mini-LNG Terminals can:
INOXCVA proposes a national framework where modular mini-LNG terminals complement existing large LNG terminals, creating a resilient and flexible LNG supply architecture.
Strategic Context: India’s Growing LNG Dependency
India is the fourth-largest LNG importer in the world, and LNG has become an essential fuel for multiple sectors including power, fertilisers, petrochemicals, city gas distribution, and heavy industry.
Natural gas demand is expected to increase significantly as India pursues its policy objective of raising the share of natural gas in the energy mix to 15% of total primary energy consumption.
However, India remains highly dependent on imported LNG. Key vulnerabilities include:
Recent conflicts in West Asia have disrupted LNG shipments and forced supply rationing in India. Up to 47.4 million standard cubic metres per day (MMSCMD) of LNG supply has been affected due to force majeure conditions linked to geopolitical tensions.
A large share of LNG imports flows through maritime chokepoints such as the Strait of Hormuz, making supply vulnerable to geopolitical developments.
Unlike crude oil, India currently does not maintain significant strategic reserves of LNG or LPG, leaving the economy exposed to supply shocks.
Supply disruptions have already impacted sectors such as:
These developments highlight the need for a more resilient and distributed LNG storage and supply infrastructure.
The Case for Strategic LNG Storage
Strategic energy reserves are an essential component of national energy security. India already maintains Strategic Petroleum Reserves (SPR) for crude oil to protect the economy against supply disruptions. However, the rapid expansion of natural gas consumption now requires a similar strategic approach for LNG.
Strategic LNG reserves can:
Recent policy discussions indicate the government is evaluating expanding LNG storage capacity to build strategic reserves.
This Paper proposes that such reserves should not rely solely on large terminals but should also leverage distributed storage infrastructure through mini-LNG terminals.
Mini LNG Terminals: A Scalable Infrastructure Solution
Mini-LNG terminals are compact facilities designed to import, store, distribute, and re-gasify LNG in smaller volumes, enabling flexible deployment across diverse locations.
Unlike traditional LNG terminals, which require large capital investment and long construction timelines, mini-LNG terminals are designed with a modular architecture that allows rapid deployment and phased capacity expansion.
Typical Components
Mini LNG terminals typically include:
These terminals serve as multi-purpose LNG hubs supporting power generation, industrial fuel supply, and marine or transport applications.
Advantages of Mini LNG Terminals
Mini LNG terminals offer several advantages that make them well suited for strategic LNG storage networks.
One of the most significant advantages of Mini LNG terminals is their ability to be deployed within a significantly shorter timeframe compared to conventional LNG infrastructure. Large-scale LNG terminals typically require 5–10 years from planning to commissioning, owing to complex regulatory approvals, large-scale civil works, and extensive infrastructure integration.
In contrast, Mini LNG terminals, owing to their modular design and shop-fabricated components, can be commissioned within 15–18 months.
This accelerated deployment capability enables India to rapidly build strategic LNG storage capacity, respond swiftly to supply disruptions, and align infrastructure development with evolving demand patterns.
Mini LNG terminals require significantly lower upfront capital investment compared to large terminals. Lower CAPEX reduces financial risk and allows infrastructure to scale with demand.
This makes them suitable for:
Mini LNG terminals follow a modular concept, allowing additional storage tanks or regasification modules to be added as demand grows. This enables flexible capacity planning without overbuilding infrastructure.
Mini LNG terminals can be built closer to industrial clusters, ports, and urban demand centres. Given the right-of-way challenges in laying pipelines, this reduces reliance on long-distance pipelines and enables more efficient LNG distribution.
Mini LNG terminals support multiple LNG distribution pathways:
Small-scale LNG infrastructure can supply consumers even in regions without pipeline connectivity.
LNG offers lower emissions compared to conventional fossil fuels such as diesel. For example, LNG can reduce carbon dioxide emissions by around 20–22% compared with diesel, while significantly lowering particulate and Sulphur emissions. This supports India’s clean energy transition and decarbonization goals.
Proposed National Strategic LNG Storage Network
This Paper proposes a decentralized coastal LNG storage network consisting of multiple mini-LNG terminals. This proposed strategic network would not only enhance the distribution capabilities, but would also increase the national LNG storage capacity by ~200,000 M3.
The system would complement existing large LNG terminals by creating distributed storage nodes. Each mini terminal could function as:
West Coast – Gujarat, Maharashtra, Goa, Karnataka & Kerala
East Coast - Tamil Nadu, Andhra Pradesh, Odisha & West Bengal
Island Territories - Andaman & Nicobar Islands & Lakshadweep
These terminals could supply LNG to nearby:
Strategic Benefits for India
A decentralized mini-LNG terminal network would deliver several national benefits.
Distributed LNG storage reduces dependency on a small number of large terminals and improves resilience against supply disruptions.
Industries reliant on gas can maintain operations during supply shocks.
Mini LNG terminals can be deployed quickly, enabling rapid expansion of LNG infrastructure.
LNG can power:
Regions without pipeline infrastructure can receive LNG through:
Policy Recommendations
To enable the development of decentralized LNG infrastructure, the following policy measures are recommended:
Role of Indian Industry
India has developed strong capabilities in cryogenic engineering and LNG infrastructure. Companies such as INOXCVA have successfully delivered mini-LNG terminal solutions internationally, including installations in remote regions and island economies.
Leveraging indigenous technology and engineering capabilities will support:
The appended video narrates the impact created by three LNG terminals, being established by us INOXCVA, at
Conclusion
India’s ambition to expand the share of natural gas in its energy mix must be supported by resilient LNG infrastructure. Recent geopolitical developments have demonstrated the vulnerability of global LNG supply chains and the need for strategic storage.
A decentralised network of mini-LNG terminals offers a practical, scalable, and cost-effective solution to strengthen India’s energy security.
Such infrastructure can ensure that LNG is stored strategically, distributed efficiently, and delivered reliably across the country, supporting India’s industrial growth and clean energy transition.
INOXCVA stands ready to collaborate with the Government of India to design, develop, and implement this next generation of LNG infrastructure.
Proposed Mini LNG Terminal network across India
Rationale behind the proposed locations for mini-LNG terminals in India
| Region | Proposed Location | Strategic Rationale | Key Demand Centres |
|---|---|---|---|
| West Coast | Kandla | Petrochemical and port cluster Major energy logistics hub |
Gujarat industrial belt Kutch & North Gujarat |
| Mumbai / JNPT | Largest industrial demand centre | Maharashtra manufacturing | |
| Vadhavan Port (upcoming) | |||
| Ratnagiri | Lies on an underserved stretch | Can boost regional shipping | |
| Goa | Maritime and industrial demand | Coastal industry | |
| Mangalore | Refinery and petrochemical hub | Karnataka industry | |
| Vizhinjam | Emerging deepwater port | Southern logistics | |
| East Coast | Tuticorin/Karaikal | Large industrial base | Tamil Nadu manufacturing |
| Krishnapatnam | Industrial corridor | Andhra Pradesh clusters | |
| Visakhapatnam | Steel and shipping hub | Eastern industrial corridor | |
| Kakinada | Gas infrastructure presence | Fertiliser & petrochemicals | |
| Paradip | Refinery and petrochemical hub | Odisha industry | |
| Haldia | Gateway to Eastern India | Bengal industrial belt | |
| Island Territories | Andaman & Nicobar | Strategic energy security | Island power supply |
| Lakshwadeep |