Post on 12-Mar-2021
Brisbane
24 June 2014
LNG IMPORT FROM AUSTRALIA :
INFRASTRUCTURE & MARKET IN INDIA
S. Narayanan, Managing Director,
APGDC
Disclaimer
2
The following presentation and views are for information purpose only and are express personal opinion of the speaker. These are not endorsed by GAIL, APGDC or GoAP. Audience may independently verify before taking action and speaker does not held any responsibility for accuracy of information contained therein.
LNG import from Australia :
infrastructure & market in India 3
Background
LNG Infrastructures : Re-gasification
Kakinada FSRU project
LNG Infrastructure : Pipeline, Other
evacuation methods
LNG Supply Potential : Australia to India
4
Background
GDP Growth rate
India Average Growth
rate 2004- 2012 :
7.8 %
Australia : 3%, China
: 10.5 %
India, China Grew
more than World
average of 2.7%
7.9
9.3 9.3 9.8
3.9
8.5
10.3
6.6
4.5
-4
-2
0
2
4
6
8
10
12
14
16
2004 2005 2006 2007 2008 2009 2010 2011 2012
India Australia
China World
Growth of Economy 5
GDP Growth rate
(Data : World Bank)
India
China
World Australia
Indian Economy : Growth & projection
6
India’s GDP grew 4.6% in 2013-14
expected to be 5.5% in 2014-15 *
2014-18 : 5.9 % Annual average GDP Growth (OECD Study )
Long term GDP growth rate pegged to 5 % CAGR
World Energy Usage 7
Share of Natural
gas in the Energy
Basket : 24 %
There is marginal
decline in 2013
Share of Natural
Gas is in increasing
trend in longer term Oil 32.9%
Gas 23.7%
Coal 30.1%
neuclear Energy 4.4%
Hydroelectricity 6.7%
Renewables 2.2%
2013
Data Source : B P Statistical Review 2014
Total : 12730.4 MTOE
8
Oil 30.3%
Gas 9.2%
Coal 52.7%
neuclear Energy 1.3%
Hydroelectricity 4.6%
Renewables
1.9%
2012
India : Role of gas in Energy mix
Oil 29.5%
Gas 7.8%
Coal 54.5%
neuclear Energy 1.3%
Hydroelectricity 5.0%
Renewables
2.0%
2013
Coal 50%
Oil 25%
Gas 20%
Hydel 2%
Nuclear 3%
2025
Current Share of Natural gas in the Energy Basket : 8-9
%
There is marginal decline in 2013
Share projected to reach 20% by 2025
Further increase to converge to global trend, which is
higher, currently at 24%
Data Source 2012& 2013: B P Statistical Review 2014
Data Source 2025: India Hydrocarbon Vision 2025
Total : 2731 mtoe Total : 2952 mtoe
India : NG Vs Total Energy trend 9
320.8 345.1 366.8 390 420.1
446.5 483.8
510.2 534.6 573.3 595
26.6 28.7
32.1 33.5
36.1 37.2
46.7 56.7
55.3
52.9 46.3
0
100
200
300
400
500
600
700
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Natural Gas (in Mtoe)
Total Energy (Mtoe)
Share of Natural gas in the Energy Basket : 8 to 9 %
There is marginal decline in 2013
Share of Natural Gas is expected to increase in longer term as more infrastructure is being developed
Data Source : B P Statistical Review 2014
Natural Gas Consumption 10
Data Source : B P Statistical Review 2014
Share of Natural
gas consumption
as part of total
primary energy :
Slow but steady
growth
Natural Gas
consumption is
sizable and
significant role in
longer term
8.29 8.32 8.75 8.59 8.59
8.33
9.65
11.11
10.34
9.23
7.78
0.00
2.00
4.00
6.00
8.00
10.00
12.00
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Gas as % of Total Energy
India : Natural Gas consumption 11
Peak Consumption : 172.6 MMSCMD
Short term reduction in consumption – 2011-13 due to reduction KG D6 gas decline
2003- 2013 : CAGR : 5.71 %
Long term sustainable trend: Upward, around 5 %
Gas Consumption at same 5% CGR in 2030 : 274 MMSCMD
Power and Fertiliser are major consumers of gas totalling to almost 70%
80.8 87.4
97.8 102.2
109.9 113.2
142.2
172.6 168.2
161.1
140.8
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
200.0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Consumption (Average MMSCMD)
Data Source : B P Statistical Review 2014
India : Gas Demand Projection 12
Source : PNGRB
Vision 2030
Document
Reasonable
assumptions of
Relative energy
basket prices apply
The above is
Unrestrained,
realistic demand
price sensitive
Realistic
Consumption : 274
MMSCMD vs
demand of 746
MMSCMD
242.66
378.06
516.97
654.55
746.03
0.00
100.00
200.00
300.00
400.00
500.00
600.00
700.00
800.00
2012-13 2016-17 2021-22 2026-27 2029-30
Power Fertilizer
City Gas Industrial
Petchem/Refineries/Internal Coms. Sponge Iron/Steel
Total Realistic Demand Log. (Total Realistic Demand)
Figures in Annual Average
MMSCMD
India Gas Production : Inadequate 13
India’s share of proved global natural gas reserves is 33.7 billion Cubic meter, which is 1 % of world 3.37 trillion cubic meter (Source: B P Statistical Review 2014)
KG – D6: 6 TCF, recoverable reserves (estimations)
80 % of production is from off shore fields
Remaining is from onshore filed, in which 90 % is from Assam, Gujarat, Andhra Pradesh
Coal Bed Methane : Not Significant
4 rounds of bidding completed
33 blocks awarded, out of which 5 blocks are producing 0.23 MCM/day
Proved reserve of Natural Gas
14
Data Source : India Pet & NG statistics 2012-13
29.5 29.2 29.6 29.3 30.1 30.5
39.2
50.8
46.1
40.3
33.7
0
10
20
30
40
50
60
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Production (BCM)
Production in 2013 :33.7 Billion Cu m
equivalent to average of 92.3
MMSCMD
Reserve to production ratio of 40.2, vs-
a-vis world average of 55.1
India : Consumption, Production & Import
15
80.8 87.4 97.8 102.2 109.9 113.2 142.2
172.6 168.2 161.1 140.8
80.8 80.0 81.1 80.3 82.5 83.6
107.4
139.2 126.3 110.4
92.3 0.0 7.4
16.7 21.9 27.4 29.6
34.8
33.4 41.9
50.7
48.5
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Gas Import (Avg. MMSCMD)
Production (Avg. MMSCMD)
Consumption (Average MMSCMD)
Data Source : B P Statistical Review 2014
LNG Import to India 16
0.00
1.80
4.07
5.33
6.67 7.20
8.47 8.13
10.20
12.33 11.80
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Gas Import (MTPA)
Data Source : B P Statistical Review 2014
Gas Import
around 12 MTPA,
equivalent to
average of 48
MMSCMD
Primarily through
Dahej and Hazira
LNG terminals
Entire Import
through LNG, No
Import through
pipelines
LNG Import to India: Projection
17
LNG imports to rise from 47
MMSCMD in 2012-13 to 72
MMSCMD (18MTPA) in 2017-18
at a CAGR of 8-9%
India’s LNG requirements primarily met by
Qatar; however share has reduced from 83% in
2007-08 to the current 76%
Currently, PLL is having a long term supply
contract; 7.5 mtpa with Rasgas, Qatar
Supplies from Gorgon, Australia expected to be
delivered at Kochi terminal by 2015-16
GAIL : Tie-up in USA (HH based) to start in 2016-
17
TAPI Pipeline : Import from Turkmenistan
18
Executed Gas Sales and Purchase Agreement (GSPA) in May, 2012
Landed cost at Pakistan – India border is said to be USD 13/ MMBTU
Approx. 1800 kms long pipeline
India’s share 14 BCM/ year (approx. 38 MMSCMD)
Estimated cost: 7.6 Billion (2008)
SPV yet to be formed
Pipeline is expected to be operational in 2018
LNG Import : Determining factors
19
Decline in Indigenous production of Natural gas from KG – D6
& other blocks
Delay in trans-national pipeline- TAPI
Price of LNG
Fertilizer policy
Power tariff policy and Reforms
Last mile connectivity
Inter pipeline swapping, inter state tax
Beyond 2017, LNG penetration to be defined by
regulatory push 20
Peak hour Policy
Natural gas based plants are best suited for meeting peak power requirements as they can be switched on and off with generation being ramped up as per convenience
Subject to incentives offered by the government, it can promote usage of gas for power generation (as tariffs for peak hour are expected to be higher)
Renewable Energy Policy
Considering the rising energy needs of India and its growing focus on use of clean fuels, there is a significant potential for increased cleaner fuels consumption (solar, renewables, gas)
It will potentially result in structural shift in country’s fuel mix from oil towards cleaner fuels
Urea Pricing and Investment policy
Subsidization of POL products
21
Infrastructure For LNG Re-gasification and gas Distributions
India’s LNG Import Program 22
Currently, Four LNG terminals are in operation
Total Capacity : 20 MMTPA
All land Based, all in West Coast
Utilization of newly built terminals at Dhabol and Kochi are
low
Various terminals planned – both east and west coast (details in
later slides)
East Coast terminals :
Mixed development : Land based and also FSRU
Environmental clearance obtained for two projects
LNG Import Infrastructure : Existing and outlook
23
FSRU based / Land
based
Current 2015-16 2019 -20
PLL Dahej Land Based 10 15 15
Shell , Hazira 3.7 5 7
PLL Kochi 5 5 10
Dhabol 2 5 5
Kakinada FSRU based 3.5 5
Gangavaram Land / FSRU based 3.5 5
Mundra Land based 7.5 7.5
Pipavav Land Based 3.5 3.5
Ennore Land based 5 5
Mangalore Land based 5
Others 5
Total LNG Capacity
(MMTPA)
20.7 53.0 73
Gas Qty. 73.5 185.5 255
Figures in MTPA
LNG Projects in West Coast
24
LNG Terminals planned in West
Coast:
In Operation :
Dahej
Hazira
Dhabol
Kochi
Planned :
Mundra
Pipavav
Mangalore
Dahej
Hazira
Dhabol
Kochi
Mundra
Pipavav
Mangalore
Terminals under
operation
Terminals planned
LNG Projects in East India
25
LNG Terminals
planned in East Coast:
FSRU based :
Kakinada (2 nos.)
Krishnapatanam
Paradip
Digha
Karaikal
Land based terminal:
Gangavaram
Ennore
Kakinada
Gangavaram
Krishnapatanam
Paradip
Digha
Ennore
Karaikal
FSRU (In progress)
Land based LNG terminal
FSRU (Planned)
Gas Distribution Facilities
26
27
Kakinada
FSRU project
Distribution facilities in East Coast
28
Name of
the P/L
From – To Capacit
y
(MMSC
MD)
Curren
t flow
MMSC
MD)
Mallavara
m Bhilwara
pipeline
Kakinada –
Bhilwara
57 Under
Constr
uction
Kakinada
Srikakulam
pipeline
Srikakulam
, further to
Haldia
20 Notifie
d for
biddin
g by
PNGR
B
Ennore
Nellore
Ennore -
Nellore
5 Under
biddin
g
Vijaywada
- Nellore
Viajywada
– Nellore
10-15 Propos
ed
To Bhilwara
To Ankot (Gujarat)
GAIL KG Basin Network
ENPL
Ennore
Krishnapatnam
Gangavaram
Kakinada
Legends:
GAIL KG Network:
EWPL (RGTIL) :
MVPL (under const):
P/l under bidding :
LNG Terminals planned:
Gas Fields :
Offshore Gas fields
(RIL, ONGC, Cairn, GSPL)
29
30
Kakinada FSRU project
A.P. natural gas demand: salient features
Market Study and Business Plan completed by M/s KPMG:
Existing shortfall:13.6 MMSCMD
Additional prospective demand (in existing plants): 12.4 MMSCMD
Due to drastic reduction in domestic gas production, huge Investments made by power plants threatened to become stranded assets
Power is the first customer base in AP:
Affordability of RLNG is a key issue,
Pipeline connectivity required to mitigate the risk of power shortage.
31
Sector
Contract
ed qty. Supply GAP
Fertilizer 3.3 2.6 0.7
Power 14.0 2.8 12.2
CGD 0.10 0.11 -
Ceramics, Glass,
Steel, and Others 0.9 0.2 0.7
Total 18.3 5.7 13.6
Existing Demand (in MMSCMD)
Sector
Require
ment
GAP
Fertilizer (RLNG ) 5.4 5.4
Power 10.0 3.0 *
CGD 2.0 2.0
Others 2.0 2.0
Total 19.4 12.4
Future Demand (in MMSCMD)
FSRU on the East Coast
In case the FSRU is located on the East Coast
in AP, then the delivered price will be lower at
least by 4 US Dollar due to the avoidance of
additional taxes and transportation charges
Therefore, an FSRU terminal on the east coast
can meet the demand shortfall economically
when compared to the RLNG terminals on the
West coast
Further, towards open access of terminal,
power plants can make high sea purchase,
where tax component becomes nil, and no
customs duty, thereby making more viable
13.41
5.47
1.49
0
5
10
15
20
FOB Price &Other
Taxes Transportation Total Cost
$/M
MB
TU
14.00
2.03 0.40
0
2
4
6
8
10
12
14
16
18
FOB Price &Other
Taxes Transportation Total Cost
$/M
MBTU
15.68
20.36
Why FSRU on the East Coast?
LNG un loaded in East coast & delivered in AP
LNG un loaded on the West Coast & delivered in AP
FSRUs in East India : Need and Opportunities
33
To Bhilwara
To Ankot (Gujarat)
GAIL KG Basin Network
ENPL
Ennore
Krishnapatnam
Gangavaram
Kakinada
Legends:
GAIL KG Network:
EWPL (RGTIL) :
MVPL (under const):
P/l under bidding :
LNG Terminals planned:
Gas Fields :
Offshore Gas fields
(RIL, ONGC, Cairn, GSPL)
Opportunities :
Proximity to Australia LNG export projects as compared to west coast
Easy and ready evacuation through well established Pipeline Connectivity:
Kakinada connected to local and as well to various demand centres across the country through transmission and distribution network
Vizag and Ennore : connection plan made
Other ports : can be quickly connected
FSRUs in East India : Challenges
34
Prevailing higher landed price of imported gas, limiting demand
Indian gas market sensitive to gas price - Higher power cost is not getting accepted
Pooling / Mix of Domestic and imported gas : is not favourable due to reduced domestic production of gas
Viable cost for Indian market is around 11 to 12 $ per mmbtu Delivery Ex. Ship basis and possibly around 10 MTPA of LNG is affordable at this price.
0
10
20
30
40
$6-$7 $11-$12 $15-$16 >$18
Ga
s D
em
and
in M
MSC
MD
Price of Gas per mmbtu
Power Sector Demand (A.P.)
FSRU : Solution with Advantage
35
Floating Storage Re-
gasification Unit
(FSRU) is a
technological
innovation
Effective substitute to
land-based Re-
gasification terminals
FSRU : Solution with Advantage 36
Land Based Terminal
FSRU
FSRU : Solution with Advantage 37
Lower Cost of Implementation
(CAPEX)
Only Receipt facilities are to be
developed, Storage & Regas on
board are hired/ chartered
Capex : 250-350 Million USD ,
when compared to 1 bn USD for
an Land based terminal
Reduced time to market
18-24 months, compared to 48-
60 months
Storage
Regas
FSRU : Solution with Advantage 38
Minimal Land Requirement
1-2 Hectors s as compared to 30-40
hecters
Reduced footprint and environmental
impact- ideal for sensitive or restrictive
areas
More possible locations
Flexibility : in terms of Scales – also
expandable and scale-able
Mobility :
Can serve as conventional LNG carriers
during periods of low demand
Can avoid inclement weather
Preliminary Design Basis : Kakinada LNG
Send-out demand and flexibility:
Annual capacity : 3.5 mtpa;
Maximum send out : flow rate shall be 50% above the average
FSRU output:
Pressure: Min 80 bars, Max 120 bars;
Temperature: Min 0°C, Max 20°C.
Grid Tie-in : Pipeline 1
GAIL grid of Section: 12” & 18”, Distance to shore: <1km;
Gas pressure min/max: 50 bar/70 bar;Minim. Temp : : 3°C;
Grid Tie-in : Pipeline 2 (East-West pipeline):
Section: 48”;Distance : 17 km; Pressure min/max: 50 bar/80 bar;
Minimum Gas Temperature: 3°C;
39
Preliminary Design Basis (contd.)
Marine specifications :
Vessel size : Marine facilities will be designed to accommodate LNG
vessels between 120,000 m3 and 215,000 m3.
Mooring and berth shall be designed to accommodate Q max class
vessels at a later stage.
Call duration (including berthing, mooring, cool down, unloading, cast
off) will be 30 hours for a 160,000 m3 LNG carrier (assuming
availability of storage on the FSRU).
Project to be executed through a SPV being finalised shortly
Flaring: zero flaring (including during unloading) will be the guiding
principle under normal operation.
40
Project Layout
FSRU &
LNGC
Break
Water
(1050 m)
Turning
Radius
Channel (to be
widened
/ deepened GAIL
Existing
Pipeline
network
Inter
connecti
on
Subsea
P/L
Jetty and
Berth
Config
Jetty & berth located on
south leeside of break
water. Benefits :
Tranquil sea state
Less investment for Dredging
Scope for further port
developments
41
42
LNG Supply : Australia to India
LNG Supply to India - Long term contracts
43
From Rasgas, Qatar, linked to Dahej Terminal
7.5 MTPA for 25 Years
Price linked to JCC (12.67% )
From Gorgon, Australia, linked to Kochi terminal
1.5 MTPA , for 25 Years
Price linked to JCC (14.5% )
From Sabine Pass Liquefaction terminal :
3.5 MTPA starts from 2017
Import by GAIL, Price linked to Henry Hub
From Cove Point Liquefaction terminal
2.3 MTPA, Import by GAIL, Price linked to Henry Hub
From Gazprom, Russia
2.5 MTPA, import by GAIL (India) Limited
LNG Supply to India
44
Medium and Short term contracts :
Around 2 – 3 MTPA
Marubeni, GDF Suez, Gas Natural Fenosa
Spot Contracts:
1 – 1.5 MTPA
From countries viz. Qatar, Yemen, Nigeria, Oman, Algeria, Trinidad and
Tobago, Norway, Equatorial Guinea, UAE etc.
Major Australian LNG Projects 45
LNG Supply : Australia to India
46
Huge demand of LNG – though price sensitive market
Supply to East Coast of India – shortest navigable distance, especially from Barrow Island, Browse island projects
Kakinada : Excellent connectivity through pipelines to all regions of India
Prices need to converge , especially for long term supplies
Swapping of US Shale gas acquired by other players with Australian gas to reach other markets to increase volume of LNG export from Australia
47
48
Thank you
49