Transcript Role of Natural Gas in India’s Energy Security

Natural Gas
Bridging the Gap
by
Suresh Mathur
Founding
CEO & Managing Director
Petronet LNG , India
11th December 2012
11th Petro India
Global Gas Industry
Uncertain Times
•
•
•
•
•
•
•
•
•
•
Economic Slowdown
Emergence of unconventional Gas
Potential Cross Border pipelines
Upcoming LNG Capacity
Increase risk for Mega projects
Nuclear Slowdown
Potential delays in LNG Projects
Global LNG Demand/Supply
Europe Gas Deficit
Spot Market
2
Asia
• Emerged as the most important & predominant
destination
• Led by China, India & South East Asia
• Will Account for 35% of incremental Global demand
growth till 2030
• Primary Global buyer of LNG.
• Lack of sufficient indigenous Energy resources
driving LNG demand
• New LNG buyers emerging – Thailand, Malaysia and
Indonesia
• Canada showing interest in Asian Markets
• China is pursuing multiple options:- LNG
- Cross Border Pipelines
- Unconvential Gas
- Deepwater Oil & Gas
3
India
• Growing Importance
• Greater Reliance on LNG & Cross Border
Pipelines
• Insufficient Domestic Supplies
• Gas Affordability major Concern
• Could prevent Large scale locking of latent gas
demand.
• Awareness & Greater Focus on Infrastructure.
• NELP / OALP
• Enabling regulations
4
INDIAN ENERGY SECTOR : AN OVERVIEW
World
Energy Consumption (MTOE)
Asia Pacific
India
433
Largest Energy
Consumer
11294.9
3981
Coal
29%
51%
53%
Oil
35%
29%
31%
Natural gas
24%
11%
8.6%
Nuclear
5.5%
3%
0.80%
Hydro
6.4%
5.3%
6%
3245
1097
129
(US$ 76 billion)
2.1%
4.1%
4.8%
2.5%
6.5%
6.6%
5th
Energy Mix (%)
Oil & Gas Imports
(MTOE)
Growth in Energy (10 yrs)
Total Primary Energy
Natural Gas
India – A Fast Growing Energy Market with Growth in Natural Gas Consumption
more than World & Asia Pacific.
5
Consumption of Natural Gas
6
Natural Gas Demand in India
7
Fall in Domestic Supply
Need for importing LNG
8
Increasing Market for LNG
9
Domestic Gas Prices likely to be far
below conventional LNG prices
10
LARGE DEMAND BUT SENSITIVE TO PRICE
Gas demand and supply, 2015
Mmscmd, at customer gate prices
59
171
25
19
40
388
276
230
46
185
146
Sectors with
demand
Price of $1617/ mmbtu
▪
▪
Industries
CNG
transport
126
185
2
Low
203
185
1
2010 year end
consumption
35
91
45
Price of $1314/ mmbtu
▪
▪
▪
Refineries
Industries
Power cogen
77
311
185
3
Medium
Price of $1112/ mmbtu
▪
Peaking
power plants
4
High
Price of $8-10
mmbtu
▪
▪
Potential
demand,
2015
Baseload power
New fertilizer
plants
Imports
Prices at Crude of $ 100/Bbl
1 Based on estimated LNG supply of 8 mtpa in 2015 including RasGas (7.5 mtpa) and 1.5 mtpa from Gorgon LNG in 2015
SOURCE: Indianpetro; DGH; Company annual reports; Expert interviews; McKinsey analysis
Domestic supplies
11
Regasification LNG Terminals in India
Sl LNG
terminal
Name
Company
name
Year-on-Year LNG Regasification Capacity (MMTPA) and R-LNG
Supply (MMSCMD)
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
201617
1
Dahej Terminal
Petronet
LNG
10
10
10
10
15
15
15
15
2
Hazira Terminal
Shell
3
4
4
4
4
5
5
5
3
Dabhol Terminal
Ratnagiri
Gas &
Power
0
3
3
5
5
5
5
5
4
Kochi Terminal
Petonet
LNG
0
0
0
0
5
5
5
5
5
Mundra Terminal
GSPL /
LNG
0
0
0
0
0
0
5
5
6
Gangauaram
Terminal
Petronet
LNG
0
0
0
0
0
0
0
5
7
Ennore Terminal
IndianOil
0
0
0
0
0
0
5
0
Total LNG
Regasification
Capacity
(MMPTA)
13
16
16
19
29
30
40
40
Total R-LNG
Supply*
(MMSCMD)
47
60
64
76
116
120
160
160
12
13
Emerging High Demand - For LNG in India
14
What we need to do
•
•
•
•
•
•
•
Review Pricing
Provide Infrastructure
Shift Existing Customers on Liquid to Gas
Policies to encourage Investment
Declared Good Status
Removal of Custom Duties
Cross Border Pipelines.
15
To do this we need Bold Initiatives
•
•
•
•
•
•
Change mind set
Focus on National Economics
Different ways of Subsidizing Power & Fertiliser.
Procure Gas Contracts.
Price Assumption
Progressive Regulation.
16
Way Forward
• Identify Liquid Fuel displaceable by gas.
• Identify customers / sectors for immediate
Conversion.
• Issue policy Guidelines / Directives.
• Draw out time bond action plan.
• Upgrade or Modify facilities at customer ends.
• Utilise surplus capacity of existing LNG Terminal.
• Speedy finlisation of LNG Contracts.
• Augment LNG Capacity in the Country.
• Expedite Cross Border Pipeline.
• Provide connectivity through spur lines/ pipelines to
the customers.
• Speed up CGD Network.
• Provide incentives to promote switch over.
17
Conclusions
18
Thank You
19