Concept Note

Strengthening India’s Energy Security through a Decentralized Strategic LNG Storage Network using Mini LNG Terminals

31^st 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:

• Enhance energy security through distributed LNG storage
• Reduce supply vulnerability during geopolitical disruptions
• Deliver LNG closer to consumption centres by increasing regional storage capacity
• Enable faster and lower-cost deployment of storage infrastructure
• Support India’s transition to a gas-based economy
• Increase pan India LNG Storage capacity by approximately 200,000 M₃ with 10 mini-LNG Terminals

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:

• Geopolitical Supply Risk

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.

• Concentration of Supply Routes

A large share of LNG imports flows through maritime chokepoints such as the Strait of Hormuz, making supply vulnerable to geopolitical developments.

• Absence of Strategic Gas Storage

Unlike crude oil, India currently does not maintain significant strategic reserves of LNG or LPG, leaving the economy exposed to supply shocks.

• Industrial Impact

Supply disruptions have already impacted sectors such as:

• Fertilizer
• Petrochemicals
• Steel
• Industrial gas consumers

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:

• Provide buffer supply during geopolitical disruptions
• Stabilize domestic gas prices
• Ensure fuel availability for critical sectors
• Support power generation reliability
• Strengthen national energy resilience with increased storage and distribution capacity
• Making the Country future-ready for future domestic gas exploration & monetization

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:

• LNG cargo receiving facility
• Cryogenic LNG storage tanks
• LNG regasification systems
• LNG truck loading bays
• LNG bunkering modules

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.

• Rapid Implementation

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.

• Lower Capital Investment

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:

• distributed infrastructure
• phased expansion
• public–private partnership models

• Modular and Scalable Design

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.

• Proximity to End Users

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.

• Enabling Small-Scale LNG Ecosystem

Mini LNG terminals support multiple LNG distribution pathways:

• LNG trucking
• satellite LNG stations
• marine bunkering
• industrial fuel supply
• off-grid power generation

Small-scale LNG infrastructure can supply consumers even in regions without pipeline connectivity.

• Environmental Benefits

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 M_3.

• Network Architecture

The system would complement existing large LNG terminals by creating distributed storage nodes. Each mini terminal could function as:

• LNG storage facility
• LNG distribution hub
• LNG satellite supply point

• Suggested Geographic Distribution

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:

• industrial corridors
• ports
• power plants
• city gas distribution networks
• heavy transport hubs

 

Strategic Benefits for India

A decentralized mini-LNG terminal network would deliver several national benefits.

• Enhanced Energy Security

Distributed LNG storage reduces dependency on a small number of large terminals and improves resilience against supply disruptions.

• Industrial Continuity

Industries reliant on gas can maintain operations during supply shocks.

• Faster Infrastructure Expansion

Mini LNG terminals can be deployed quickly, enabling rapid expansion of LNG infrastructure.

• Support for LNG as Transport Fuel

LNG can power:

• long-haul trucking
• shipping
• mining equipment
• rail locomotives

• Enabling Remote Energy Access

Regions without pipeline infrastructure can receive LNG through:

• ISO containers
• cryogenic road tankers
• small LNG vessels

 

Policy Recommendations

To enable the development of decentralized LNG infrastructure, the following policy measures are recommended:

• National Strategic LNG Reserve Policy: Define a national LNG reserve target similar to strategic petroleum reserves.
• Coastal LNG Infrastructure Policy: Allocate land at select ports for mini-LNG terminals.
• Public–Private Partnership Framework: Encourage private participation in LNG storage infrastructure.
• Incentives for Small-Scale LNG Infrastructure: Provide tax incentives or viability gap funding.
• Integration with National Gas Grid: Ensure connectivity between mini-LNG terminals and pipeline networks where feasible.

 

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:

• Make in India
• Domestic LNG infrastructure development
• Global exports of LNG engineering solutions

The appended video narrates the impact created by three LNG terminals, being established by us INOXCVA, at

• Kyleakin, Scotland
• Crabbs Peninsula in Antigua
• Nassau, the Bahamas

 

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