Asia Energy Security Summit 2012Pipelines: Policies, Regulations & RestrictionsSudha Mahalingam, Colombo Feb 29-Mar 1, 2012
Salience of Natural Gas Gas as bridge fuel for this century Abundance, climate-friendly, availability in the neighbourhood Longer pipelines, transcontinental LNG makes it fungible Asia-Pacific has 70% growth in LNG Capacities Is LNG price getting globalised, delinked from crude?
Primary Energy Mix World India renewa renewa nuclear nuclear bles hydro 1% bles 1% hydro 5% 1% 5% 6% gas coal 11% 30%gas24% coal 52% oil 30% oil 34%
Natural Gas India’s consumption of natural gas has risen faster than any other fuel in the recent years.Current Sector-wise Industries such as power generation, fertilizer and consumption petrochemical production are shifting towards natural gas and play a dominant role in creating demand for it. others 10% % Share / CGD CAGR weights 6% 9.0%- power 43% 9.189100%Petroc power 21.37% fertilizer 5% 30% 1.500000%hemic 43% petrochemicals 13.60% 11% 1.496000% als 11% fertiliz Natural Gas demand CAGR 12.185100% er 30% Using the above Natural gas CAGR, we forecast the demand 20 years hence. However, assuming that slowly the CAGR with match the GDP of India, we use g=10% Total demand 263 mmscmd from 11th year and g=7% from 16th year.
Natural Gas Demand Natural Gas Demand 450 387.819 400 Billion cubic meter 350 300 250 200 150 100 50 0 2020-21 2027-28 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2028-29 2029-30 YearSince the only mode of transportation of Natural Gas on land is bypipelines only, so by the year 2030, the Natural Gas pipeline capacitywill be 387.819 bcm =1062.5178 MMSCMD ≈ 1100 MMSCMD
Natural Gas: FutureOpportunities Import of gas through pipeline and in the form of LNG. Increase the capacity of import terminals for LNG to 26 million tonnes per year from 13.7 million tonnes. LNG terminals in India: Location Capacity (MMTPA) Status Dahej 10 to 14 Existing with Augmentation Hazira 2.5 to 5 Existing with Augmentation Dhabol 5 Under construction Kochi 5 Under construction Mundra 6.5 Proposed Ennore 5 Proposed Pipavav - Proposed Kakinada - Proposed Paradip, Dhamra, Gopalpur - Proposed Mangalore - Proposed Jamnagar - Proposed
How do we incentiviseLNG? Asian sellers & Asian buyers – Australia, Indonesia, PNG, Malaysia, Iran, Qatar, Turkmenistan China, India, Taiwan, S.Korea Common user terminals? Regulated cost-plus tariffs?
Natural Gas: Future OpportunitiesTurkmenistan–Afghanistan–Pakistan–India (TAPI)pipeline: 38mmscmd of Gas to India. Schlumberger, estimates an initial gas-in-place 300-2,100 trillion cubic feet (TCF) in Indian shale gas basins in Damodar Valley. Reliance’s KG D6 field has proven reserves of just 7-8 TCF. India’s pipeline network needs expansion to get the gas to market. Investment required: Rs 350 billion or US $7 billion
Journey to the Year 2030 Natural Gas Pipelines 12000 Kms LENGTH 45000 Kms 300 mmscmd CAPACI 1100 mmscmd TY Petroleum Product Pipelines 13000 Kms LENGTH 30000 Kms 74 MMT CAPACI 400 MMT TY
How do we get there? Policy : 33% common carrier Tax breaks for common carrier capacity