development and future of lng in india

7/27/2019 Development and Future of LNG in India

1/12

Development and Future of

LNG Industry in India


2/12

AGENDA

1 Natural Gas Uses and Benefits

2 Introduction to LNG

3 Need for LNG

4 Factors affecting Indian LNG Market

5 LNG Value Chain

6 Beginning and Evolution of LNG

7 Existing Players in LNG

8 Indian LNG Market - Future Landscape and Latest Development

9 Conclusion


3/12

NATURAL GAS USES AND BENEFITS

Sector Uses

Power As fuel for base load power plants in combined cycle/co-generation power plants

Fertilizer Industry As feed stock in the production of ammonia and urea

Industrial As an under boiler fuel for raising steam as fuel in furnaces andheating applications

Domestic and Commercial For heating of spaces and water for cooking

Automotive As a non-polluting fuel

Petrochemicals As the raw material from which a variety of chemical productse.g. methanol, are derived

Application of Natural Gas in various sectors


4/12

INTRODUCTION TO LNG (LIQUIFIED

NATURAL GAS)

Natural gas is transported in its gaseous form through pipelines

India has gas deficit and needs to import natural gas. This can be donethrough laying international pipelines

Only option is to import natural gas in the liquefied formin pressurisedvessels. This form of natural gas is known as Liquefied Natural Gas LNG

The natural gas from the gas field in the exporting country is purified,compressed to liquid form, transported in pressurised vessel to theimporting country and is then regasified. This regasified form is then known asR-LNG (Regasified LNG)


5/12

NEED FOR LNG

LNG import in India is

projected to grow from about45 MMSCMD in 2010 to

about 160 MMSCMD in 2020

Projected demand growth :

220 MMSCMD in 2010 to

390 MMSCMD in 2020,(increasingly outstripping its

domestic supply)


6/12

FACTORS AFFECTING THE INDIAN LNG MARKET

Major External Factors

Major Internal Factors

Less-than-expected output from domestic fields, mainly KG-D6

Developing pipeline infrastructure

New gas sector regulations in India

1

Global LNG market supply-demand dynamics to favor Indias LNG

imports

2

Future Factors

Pooling of gas prices

Price sensitivity

3


7/12

LNG VALUE CHAIN

Exploration and Production

Liquefaction

Shipping

Storage and Regasification

Distribution of cost along the value chain (in reference to US operations)


8/12

BEGINNING AND EVOLUTION OF LNG

First liquefied natural gas (LNG) receiving and re-gasification terminal in Indibecame operational at Dahej, Gujarat, in 2004

Countrys total LNG import capacity is about 15 MMTPA, with Petronet LNG

holding a dominant share of about 75%

Current Players Petronet LNG and Shell Haziraoperate in the Indian LNGreceiving and re-gasification market


9/12

Petronet LNG Shell Hazira

Market leader with about 76% (11.5

MTPA) of total LNG.

Owns and operates an 11.5 MMTPA

terminal at Dahej and is constructinganother terminal at Kochi

It has gas sale purchase agreements

with GAIL, BPCL and IOCL (gas off-

takers).

Off-takers share the gas received in a

60:30:10 ratio (GAIL, BPCL and IOCL,

respectively). Petronet charges a fixedregasification margin from the off-takers.

Petronet is planning to target new

markets such as South India, Sri Lanka

etc.

Started operations in 2005 at Hazira,

Gujarat. Shell and Total are its

promoters and hold 74% and 26%

stakes in the terminal, respectively.

Hazira terminal is used exclusively forregasifying spot LNG. This was the first

terminal in the world to adopt this

model.

This terminal is used mainly for

regasifying spot LNG.

Shell and Total opened the terminal for

use by a third party (Gujarat StatePetroleum Corporation). Taking this

strategy further, they have offered this

facility to major customers such as

Reliance Industries Limited.


10/12

INDIAN LNG MARKET - FUTURE LANDSCAPE

Proposed Project Player/s

LNG

Procurement

capability

R-LNG off-take

capability

Operational

skills

Ability to raise

funding for the

project

Overall project

success

probability

East Cost Terminal Petronet LNG

Kochi LNG Terminal Petronet LNG

Dabhol LNG

Terminal

Ratnagiri Gas andPower (GAIL and

NTPC)

Ennore LNG

Terminal

IOCL and TIDCO

Mundra LNG

Terminal

GSPC and Adani

Unnamed LNG

Terminal

Reliance and BP

Karwar Port LNG

Terminal

Karnataka Power

Corporation

Mangalore LNG

Terminal

MRPL

Jamnagar LNG

Terminal

GVK Power and

Infrastructure

Dighi Port LNG

Terminal

Hiranandani

Paradip LNG

Terminal

MMTC

Kandla Port LNG

Terminal

Kandla Port Trust

Haldia LNG Terminal

Spice Energy

Pipavav LNG

Terminal

SWAN Energy

and APM

terminals

List of new players planning to enter LNG market and comparative analysis of

their future plans


11/12

INDIAN LNG MARKET - LATEST

DEVELOPMENT

Proposed East Cost terminal by Petronet LNG

In April 2011, Petronet announced

plans to set up an LNG terminal on the

east coast of India

It aims to supply gas to the Sri Lankan

market through this terminal

Status

Petronet aims to double its LNG

business in the next five years

It envisages a big opportunity to sell

gas in the Sri Lankan market

Business Need

Sri Lankan power and nascent

petrochemical industries

Industrial belt in Tamil Nadu and

proposed power plants in the region

Potential

Customers

Sri Lankan LNG Market

Industrial & domestic

consumers to switch to LNG

since it can be used directly

(no conversion to electricity

required)

Power plants (currently on

fuel oil and diesel) to switch

to LNG

Petronet has already

received a request from Sri

Lanka for supply ofLNG


12/12

CONCLUSION

LNG holds the key to Indias short to medium term energy and environmental

security.

Out of expected 4 terminals coming up in the country ,2 are likely to be put

up in Gujarat.

Future gas pricing policies such as gas price pooling may help solve the pricingissue and put LNG at par with domestic natural gas

14 players have laid out plans to enter the market. Gujarat leads the way in

LNG.

development and future of lng in india

Documents