India: LNG Sector Overview Seminar LNG Opportunities in India Norwegian Offerings Mumbai, 9 th February 2018
Agenda LNG Consumption, Demand Forecast LNG / Gas Infrastructure Key Issues 2
LNG Demand Forecast Europe 83 94 53 LNG being pushed into Europe in 2020. Declining domestic production requires increasing LNG imports in the later years. 2017 2020 2030 Americas 16 19 21 MENA 2017 2020 2030 Pipeline gas imports from US to Mexico reduces LNG import requirements, while the newer importers such as Uruguay and Colombia push up LNG demand. 19 21 2017 2020 Asia 330 36 2030 Reform of subsidized domestic gas prices allows for further LNG imports. 199 233 2017 2020 2030 Growing LNG demand as domestic gas production cannot keep up with requirement. Potential new demand creation during period of low prices. Note: The above units are all in mmt of LNG. Source :FGE 10 3
mmt mmt Asia LNG Demand Forecast 60 Established Asian Markets LNG Demand Growth (base year 2016-17) 50 New Asian Markets LNG Demand Growth (base year 2016-17) 50 40 40 30 20 30 20 10 10 0-10 0 Japan South Korea Taiwan India China Thailand Bangladesh Malaysia Vietnam Indonesia Pakistan Singapore Chinaand India account for the bulk of incremental growth in established Asian markets. In new Asianmarkets, incremental growth is seen across the board, with Pakistanand potentialnew entrant Bangladesh driving it. 11 Source :FGE 4
Overview Indian Gas Sector Primary Energy Mix-India mtoe 120 100 195 252 316 394 541 685 723 730(P*) 8.4 7.6 6.9 7.2 6.9 7.5 7.5 8 P*:Provisional 80 Others 60 56.3 55.8 52 53.7 54.1 57.9 56.9 57 Coal 40 5.6 6.7 7.5 8.2 10.2 6 6.2 6 Natural Gas Oil 20 0 29.7 29.9 33.6 31 28.7 28.6 29.4 29 1990 1995 2000 2005 2010 2015 2016 2017 Gas share in India energy basket increased from 5.6% to 10.2% during 1990-2010; However its share fell during 2010-2015 Decline in domestic Gas production & high price of LNG As per IEA, India gas demand growth is estimated @ 4.6% p.a. up to 2040 Gas share in India energy mix to rise to 20% by 2025 as per GOI vision 2030 Source : BP Stats 2017 5
Gas Demand & Supply Bulk of gas demand is projected to be from the fertilizer sector, followed up by the power sector. But Power sector demand is contingent on policy decision. RLNG ( and thereby LNG imports) are imperative to bridge the demand supply deficit Latent demand not captured Source : PPAC 6
LNG Imports Trend 25 mmtpa 20 15 10 High High Oil Oil Prices Prices Low Low Oil Oil Prices Prices Rising trend in Oil Prices (P) 5 0 2012 2013 2014 2015 2016 2017 (P): Provisional Source : IGU 2017/ PPAC 7
LNG / Gas Infrastructure
Gas Infrastructure Existing Natural Gas Pipeline Network Mundra S-HPCL Company Length (KM) Capacity (MMSCMD) GAIL 10977 206 Reliance RGTL 1469 80 GSPCL 2198 43 AGC 1000 6 IOCL 140 9.5 ONGC 24 6 RGPL 312 3.5 Total 16120 354 Swan Dahej Hazira Digha Dhamra Natural Gas Pipelines under execution/construction Dabhol H-Energy Kochi Kakinada Ennore Company Length (KM) Capacity (MMSCMD) GAIL 5486 139 GITL 2035 78 GIGL 2777 119 APGDC 391 90 KEI-RSOS PEPL 250 36 Total 10939 462 9
Gas Infrastructure LNG import Terminal Sr No Terminal Capacity (MMTPA) Comment 1 PLL Dahej existing 15.0 Operational 2 Shell Hazira 5.0 Operational 3 RGPPL Dabhol 3.5 Operational 4 PLL Kochi 5.0 Operational Sub Total 28.5 Under Execution / Expansion 1 Dahej Expansion 2.5 FY 19 Completion 2 GSPC LNG, Mundra 5.0 FY 18 Completion 3 IOC Ennore 5.0 FY 18 completion 4 HPCL Shapoorji Energy pvt.ltd., Chhara 5.0 FY 20 completion 5 Swan Energy-Jafrabad FSRU 5.0 FY 20 completion 6 H-Energy West coast terminal, Jaigarh 4.0 FY 20 completion Sub Total 26.5 Expected Capacity by 2020 55 Proposed/Planned 1 GAIL, Kakinada 3.5 Prospective 2 East Coast terminal, Digha, 3.0 Prospective 3 Adani Enterprises, Dhamra 5.0 Prospective 4 Mumbai Port 5.0 Prospective Sub Total 16.5 10
Key Issues
Key Issues Unbundling of Gas-Sector Provide incentives to private player to enter Availability of Gas at Point of use Promotion of Gas in automotive sector Competition Consumer Inadequate pipeline grid Location of LNG terminals CNG stations inadequate LNG dispensing Unit promotion LCNG stations promotion Infrastructure Gas Market Supply Pricing Limited domestic Gas availability Dependence on LNG import Volatility of prices Benchmark HUB Regulation based pricing Market driven Policies Mandated use of Gas Open access of Pipeline & Terminals Rationalization of taxes, duties & levies - GST Review of City gas distribution contracts 12
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