cgd assignment

8/10/2019 CGD Assignment

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CGD ASSIGNMENTSchool of Petroleum management , Gandhinagar

Submitted to:Dr. Pramod paliwal

Submitted By:

Joy Barot (20131016)

Kuldeep Parmar (20131017)

Kunal garg (20131019)

2014

12/23/2014


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Q1. Natural gas demand in India is expected to increase in the next decades thanks to rapid

economic growth and its governmental efforts to diversify the energy mix. To meet the goal,

India will increase its natural gas production and LNG import as well as start to explore

unconventional natural gas sources (shale gas and CBM). Could you give us your insights

regarding future direction and/or its positioning of natural gas sector in the future?

Ans1: According to estimates by EIA, India has 63 tcf of recoverable shale gas

reserves.However, there has been a recent downward revision in the estimates. Indias shale

reserve estimates pale in comparison to global standards; however limited exploration has been

carried out so far. It is quite possible that similar to the US, Indias shale gas reserve potential

could be upgraded with further exploratory drilling.The cambay, Krishna Godavari, Cauvery and

the Damodar Valley are the most prospective sedimentary basins for carrying out shale gas

activities in the country. The Cambay basin in Gujarat is the largest basin in the country, spread

across 20,000 gross square miles, with a prospective area of 1,940 square miles. Around 20 tcf of

gas has been classified as technically recoverable reserves in the basin. It is estimated that the

Krishna Godavari basin, located in eastern India, holds the largest shale gas reserves in the

country. It extends over 7,800 square miles in gross area, with a prospective area of around 4,340

square miles. The basin encloses a series of organically rich shales, containing around 27 tcf of

technically recoverable gas.

Also India is potentially rich in CBM.The Directorate General of Hydrocarbons of India

estimates that deposits in major coal fields (in twelve states of India covering an area of 35,400

km2 ) contain approximately 4.6 TCM of CBM . Coal in these basins ranges from high volatile

to low-volatile bituminous with high ash content (10 to 40 percent), and its gas content is

between 3-16 m3/ton (Singh, 2002) depending on the rank of the coal, depth of burial, and

geotectonic settings of the basins as estimated by the CMPDI. In the Jharia Coalfield which is

considered to be the most prospective area, the gas content is estimated to be between 7.3 and

23.8 m3 per ton of coal within the depth range of 150m to 1200 m. Analysis indicates every 100-

m increase in depth is associated with a 1.3 m3 increase of methane content.

pipelines will add only 30 mmscmd to the supply by 2029-30. A gap of 486 mmscmd (131

million tonnes per annum) is expected between demand and supply by 2029-30, representing an

enormous opportunity for LNG. present gas market was very complex with different pricing


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regimes rendering LNG uncompetitive in some prominent sectors. APM (Administered Price

Mechanism) gas was being provided at a price of $4.2 million British thermal unit (mBtu)

against term LNG prices of $8.5 mBtu and average spot prices of $15 mBtu. The

recommendations of the Rangarajan Committee raising the prices of APM gas to $8.4 mBtu, if

adopted, will dramatically increase LNG prospects in India making it attractive to several

sectors. GSPC-Adani plans to add a 5.0 MMTPA terminal at Mundra, and Indian Oil

Corporation Limited plans to add a 5.0 MMTPA terminal at Ennore in the State of Tamil Nadu

by the end of the 12th five year plan period in 2016-17. An Floating Storage & Regasification

Unit (FSRU) based terminal at Kakinada and another terminal at Gangavaram, both on the east

coast of the country, are also expected to become operational in the second half of the 12th five

year plan. In addition to the existing and planned RLNG terminals mentioned above,

regasification capacity addition of 5.0 MMTPA each on the east and the west coast of the

country post 13th five year plan period is also likely to commission.


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Q2.Natural gas' composition differs from each production site. Are there any mandated national-

united standards or voluntary-based standards to require natural gas producers or natural gas

transmission companies to meet some natural gas quality requirements when transmitting in

pipeline natural gas which comes from different location? If no, how do they manage to maintain

natural gas quality? Do they normally process natural gas before transmitting it in pipeline?

Ans2. Instead of mandated national-united standards the voluntary-based standards require

natural gas producers or natural gas transmission companies to meet some natural gas quality

requirements. Generally the quality of natural gas is defined by its heating value. The

composition of natural gas varies but consists mainly of methane and varying amounts of heavier

aliphatic hydrocarbons, nitrogen and carbon dioxide (CO2). A typical commercial pipeline

natural analysis compositional analysis by gas chromatography (GC). As Raw production natural

gas must be purified to meet specified quality standards dictated by the major pipeline

transmission and distribution companies. These quality standards vary and are usually a function

of a pipeline systems design and the markets that it serves like :

1. Have a certain minimum heating value (BTU).In the United States, it should be about 1000+/-

50 BTU per cubic foot of gas at 1 atmosphere and 60 degrees Fahrenheit.

2. Be at or above a specified hydrocarbon dew point temperature. The hydrocarbon dew point is

the temperature below which some of the hydrocarbons in the gas might condense in the

pipeline.

3. Free of particulate solids to prevent erosion, corrosion or other damage to the pipeline.

4. Have a sufficiently low water vapor to prevent the formation of methane hydrates within the

gas. The maximum concentration should be less than around 150 ppm.

5. Contain no more than ~4 ppm hydrogen sulfide.

6. Contain no more than 2%-3% carbon dioxide.

7. That total inerts (CO2, N2, O2) be less than 4%.

Once the gas leaves the producing well, a pipeline gathering system directs the flow either to a

natural gas processing plant or directly to the mainline transmission grid, depending upon the


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initial quality of the wellhead product. The processing plant produces pipeline-quality natural

gas. This gas is then transported by pipeline to consumers or is put into underground storage for

future use.


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Q3.How many natural gas LDCs exist in India? Is local distribution sector dominated by several

companies or fragmented by various companies?

Ans3.Local distribution companies are responsible to sell or distribute the natural gas which is

transported through long distance, large diameter, and open-access pipeline system to end users.

City gate stations are the supply point and from here supplies are also directly delivered to large-

volume end users (Industrial and electric power generating facilities) bypassing LDCs.

Various LDCs are:

1. Mahanagar Gas Limited (MGL)

2. Sabarmati Gas Limited (SGL)

3. Indraprastha Gas Limited (IGL)

4. Aavantika Gas Limited (AGL)

5. Bhagyanagar Gas Limited (BGL)

6. Central Uttar Pradesh Gas Limited (CUGL)

7. Gail Gas

8. Adani Gas

9.Gujarat Gas Company Limited (GGCL)

10.Gujarat State Petroleum Corporation Gas (GSPC Gas)

11.Haryana City Gas Company Limited (HCG)

12.Maharashtra Natural Gas Limited (MNGL)

13.Tripura Natural Gas Company Limited (TNGCL)

14.Reliance Gas Corporation Limited (RGCL)

15.Assam Gas Co. Ltd. (AGCL)

State companies like BPCL and HPCL tried to adopt CGD as new business unit and ended up

selling CNG on their retail pumps. Looking at the growth of the business, new players are

entering the sector and a new trend of consortium was also witnessed in third bidding round. The

companies see this capital intensive CGD business as combination of both infrastructuresand marketing development. While the activity of development of infrastructure is regulated,

the activity of marketing development is unregulated. As incentive to invest in this business,

companies are given two kind of exclusivity- Infrastructure and Marketing Exclusivity.

Marketing exclusivity is from the purview of common carrier or contract carrier. The regulatory

body does not have any control on the market margin various LDCs are charging, therefore it is


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concluded that the local distribution sector is fragmented and consumers end up paying different

charges at different places.


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Q4. In India, are there any mandated or voluntary natural gas quality standards for local

distribution companies (LDCs) when distributing natural gas to their consumers (residential and

commercial & industrial (C&I))? If yes, are any documentation which describe natural gas

quality standards available in public for us? If no, how do they maintain natural gas quality when

distributing it to their consumers?

Ans4.Natural gas parameters are determined differently for different segments. CGD entities

distribute gas to different segments at different pressure.

FROM TO Pressure

1.Transmission Pipeline City Gate Station 38 Bar

2. City Gate Station CNG 19 Bar

Distt. Regulating Stations 19Bar

Industrial Segment 19Bar

3. CNG Transport Segment 200-250 Bar

4. Distt. Regulating Stations Service Regulator 4Bar

Meter Regulator 4Bar

5. Service Regulator Meter Regulator 100mBar

6. Meter Regulator Domestic Segment 21mBar

Commercial Segment 110mBar

Quality of Natural Gas depends upon calorific value, high heating value, low heating value,

amount of non-combustibles and wobbe index. By the help of the access code regulation,

specifications of natural gas can be referred. The threshold limits for other elements in natural

gas like CO2, CO, H2S, N2, O2, water dew point, hydrocarbon dew point, etc. as given in Table.

As such CGD entities before providing connection ask for the daily requirements (daily

contracted quantity) of user and purpose of use. On basis of those requirements which includes

specifying pressure of gas, consumers are categorised as domestic, commercial and industrial.

According to requirements, meters are provided to users and advanced are taken. For domestic

customers, main objective is to provide continuous supply while for industrial and commercial

customers, quality is also important. Consumers provide the calorific value, pressure and usage

pattern at which they will be using gas and agrees with LDC on error limits. Industrial and


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commercial consumers are provided connection till meter point and rest of the equipments are

their responsibility. Thus, they have full right to rejects the off spec gas or deal with LDC using

terms of contract or file a petition against unfair practice and claim damages. There are terms in

GSA (gas sales agreement) to deal with any imbalance. Other service related issues are

addressed according to the Service regulation.

Source PNGRB


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Q5.Do you know any examples (or general overview) of quality requirements of natural gas

(e.g. natural gas composition, pressure, etc.) distributed to consumers by LDCs?

Ans5 Constant Parameters

1.Internal diameter (ID) The internal diameter shall be determined by deducting twice the

thickness from outer diameter of steel pipes used in the CGD network.

2.Length The actual length (for already installed pipeline) or proposed length (for yet to be

installed pipeline) of the pipe in the pipeline system.

Roughness This is a fixed value for a pipe which determines the unevenness inside a pipe.

Depending on the pipe material, the below given value for roughness factor shall be used :

Type of Material Roughness (microns)Steel New Pipe (up to ten years old) With

internal coating 10-15

Without internal coating 3540

SteelOld Pipe( more than ten years old)-

With internal coating 15-20-

Without internal coating 40-45

3.Velocity The maximum allowable velocity of the gas in the steel pipeline section of CGD

network shall be 30 m/s.

4. STPThe steel pipeline network capacity shall be determined at maximum operating pressure

(MOP) for the City or Local Natural Gas Distribution Network and with the following standard

Pressure and Temperature conditions:

Standard pressure1.01325 bar(a).

Standard temperature15.5 degree C


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Variable parameters-

1. Operating temperatureFor the purpose of determining the capacity and for annual capacity

declaration to PNGRB, the summer temperature of 30 C shall be considered by all the entities.

(ii) Inlet temperature This is the actual inlet temperature ( C) of the gas from the source into

the CGD network.

(iii) Outlet temperature This is the actual outlet temperature ( C) of the gas at the delivery

point.

(iv)Inlet pressure The maximum pressure (in barg) that is available at the entry point to the

CGD network and shall be declared by the CGD entity during capacity declaration.

(v) Outlet pressure The minimum pressure (in barg) that is required by the consumer at the

delivery or exit point as per access arrangement entered into by the shipper and the transporter.

Gas compositionThe gas composition indicating all components totaling100% by volume is

to be given with the level of impurities as per the Petroleum and Natural Gas Regulatory Board

(Access Code for City or Local Natural Gas Distribution) Regulations, 2011. From this,

necessary input to the flow equation shall be worked out. In case of more than one source, the

weighted average composition of comingled natural gas beyond the second source of entry point

shall be considered.


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Q6- Are aware of any discussions/debates/examples regarding installation of stationary fuel cell

systems which are designed to use natural gas distributed to commercial & industrial consumers

as well as residential ones? Mainly, fuel cell systems installed in these consumers are utilized as

a backup power supply and/or heating system.

Ans6.Stationary fuel cell for power backup:

Global population is increasing at alarming rate and to meet the energy needs of that much

population, huge installations all over the world is going on. Now a days there has been a lot of

talks about sustainability and global warming which is a motivation of thinking in the direction

of clean energy alternatives. Natural gas comes out to be a cleaner alternative as we compare

from other conventional sources, chart shows the pounds of CO2 released per million Btu of

different fuel.

Coal (anthracite) 228.6

Coal (bituminous) 205.7

Coal (lignite) 215.4

Coal (subbituminous) 214.3

Diesel fuel & heating oil 161.3

Gasoline 157.2

Propane 139.0

Natural gas 117.0

Natural gas is most suitable alternative amongst all. Now a days a major constraint to supply

power basically for the remote location which is not properly connected to electrical grid. In

some of the locations it is difficult to lay the grid infrastructure too as fuel cell can provide the

opportunity for decentralized reliable alternative.

Stationary fuel cell system can provide the option of decentralized power need for the area whereit is difficult to provide the power by electric grid system.

This can be beneficial in other way round too, if we see our conventional method of energy

needs we find it most unsustainable. We produce energy by the combustion of fossil fuels though

the alternative is also available to us like fuel cell. Fuel cells doesnt need combustion it is


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somehow similar to conventional battery which converters stored chemical energy to electrical

energybut fuel cells doesnt stores energy, the oxidants and fuel are fed continuously to produce

electrical energy.

The figure shows a fuel cell based on the type of fuel used, they are of four types, natural gas and

other bio gas can be used as a fuel.

Motivations for using:

There are various motivations to move towards an alternative fuel option:

Environmental impacts related to carbon footprint Efficiency

Cost effectiveness.

If we see fuel cells this covers all the imperatives for a perfect alternative.

There are minimal environmental impact as we see a fuel cells as a backup and can boost up

fast means in case of emergency it satisfy instant backup option.

The efficiency is very high around 40- 50 % which is better enough for a new energy entrant.

It is somehow cost effective and technological advancement may bring down the cot in coming

years.


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Sources:

http://www.fuelcellenergy.com/assets/Expanding-the-role-of-natural-gas.pdf

http://www.relion-inc.com/pdf/femp_fc.pdf

http://www.ey.com/Publication/vwLUAssets/Shale_Gas_-

Key_considerations_for_India/$FILE/EYIN1210-084-Shale-gas.pdf

http://ijcea.org/papers/113-A618.pdf
http://www.fuelcellenergy.com/assets/Expanding-the-role-of-natural-gas.pdfhttp://www.relion-inc.com/pdf/femp_fc.pdfhttp://www.relion-inc.com/pdf/femp_fc.pdfhttp://www.ey.com/Publication/vwLUAssets/Shale_Gas_-Key_considerations_for_India/$FILE/EYIN1210-084-Shale-gas.pdfhttp://www.ey.com/Publication/vwLUAssets/Shale_Gas_-Key_considerations_for_India/$FILE/EYIN1210-084-Shale-gas.pdfhttp://ijcea.org/papers/113-A618.pdfhttp://ijcea.org/papers/113-A618.pdfhttp://www.ey.com/Publication/vwLUAssets/Shale_Gas_-Key_considerations_for_India/$FILE/EYIN1210-084-Shale-gas.pdfhttp://www.ey.com/Publication/vwLUAssets/Shale_Gas_-Key_considerations_for_India/$FILE/EYIN1210-084-Shale-gas.pdfhttp://www.relion-inc.com/pdf/femp_fc.pdfhttp://www.fuelcellenergy.com/assets/Expanding-the-role-of-natural-gas.pdf

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