2. The 14th
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Growth in Primary Energy Demand
Global Energy Demand increases by 1/3rd
, India is a major
contributor for the growth
3. The 14th
Regulators & Policymakers Retreat
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Gas Consumption Growth – 2035
Major Contributor is Developing Economies
4. Demand for LNG almost doubling over the next decade.
Asian Gas Scenario - LNG Demand
5. India – Emerging LNG Market
SOURCE: Gas Industries; GIIGNL; Datamonitor; MoPNG; McKinsey analysis
High case: 75% capacity utilisation
Low case: 50% capacity utilisation
LNG imports
mtpa
86837671
+1% p.a.
202520152010
Japan
34333233
0.1% p.a.
202520152010
South Korea
17151311
+3% p.a.
202520152010
Taiwan
9
13% p.a.
2025
53
35
20
37
15
25
2010
India
564533
9
+13% p.a.
202520152010
China
India has Large Incremental Demand
Asian Gas Scenario
6. Natural gas currently ~11% of India’s energy mix;
Expected to reach 20% by 2030
25%
20%
51%
2%2%
2030
Oil
Natural Gas
Coal
Nuclear
Hydro
Evolving Energy Mix – Increasing Share of Gas
12 bcm
58 bcm
26 bcm
200 bcm
India Gas Market Scenario
7. Gap Between Demand and Domestic Supply
60
80 22-26
102-106
120-124
16-20
(BCM)
64- 68GAP
(At current coal & fertilizer
pricing. Will change as
power and fertilizer policy
reforms progress)
SOURCE: McKinsey, GAIL
India Gas Market Scenario
8. Existing and Projected Re-gas Capacity
Source: MOPNG, GAIL
Existing Re-gas capacity : 14.8 MMTPA
Projected Re-gas capacity: 48.5 MMTPA
India Gas Market Scenario
9. The 14th
Regulators & Policymakers Retreat
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Type
Resources In Place
Reserves
Conventional Oil & Gas
206
Billions bbl
72 Billion bbl
(35%)
Unconventional
CBM 92 TCF 9 TCF (10%)
Gas Hydrate
Under evaluation
(~1894 TCM)
Shale Gas
Under evaluation
(1000’s TCF)
Oil Shale
Under evaluation
(~ 3000 MMBBL)
INDIA’S HYDROCARBON RESOURCES
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Total Discoveries : 180
On Production : 22
Under Development : 14
Commerciality Established : 25
Under Evaluation : 48
Other Stages : 71
Reserves accretion from new
Discoveries (as on 01.04.12) :737 MMT
(Considering Commercial Discoveries) (O+OEG)
Development of Discoveries
158
13. •Crude Oil Pricing :
International price for Crude Oil
Actual Crude Oil price realization by NOCs under Nomination
regime is less due to subsidy sharing
•Gas Pricing and Utilization :
APM/Non-APM Price for Gas produced by ONGC & OIL
Gas Pricing Formula is approved by GoI under PSC /CBM Contract
regime
Allocation of Gas as per Gas Utilization Policy of Government
ALLOCATION AND PRICING
14. • Gas should be supplied in the following orders of priority :
Gas –Based Urea Fertilizer Plants
LPG Plants
Power Plants supplying power to the Grid/State utilities at regulated
rates under PPA
City Gas Distribution (CGD) Systems for Domestic and Transport
Sectors
Steels/Refineries/Petrochemicals for feedstock purposes
CGD for Industrial and Commercial use
Any other customers for captive and merchant power, feedstock or
fuel purposes
Guidelines introduced for selection of customers for domestic gas
available from small/ isolated fields under NOCs
GAS UTILIZATION POLICY
15. Dr. Rangarajan Committee’s recommendations on
pricing of domestically produced gas:
• Competitive domestic gas price currently does not exist in India
• The recommended domestic gas price in India will be arrived at
by averaging the following:
- Henry Hub price in the US ( for North America)
- National Balancing Point price in UK ( for Europe)
- Netback price at the sources of supply for Japan
- Netback price of Indian LNG import at the wellhead
of the exporting countries
The proposed formula to be applied prospectively across
all sectors.
Proposed Contractual Reforms
16. IEA estimates that India would need a total investment of USD 2306 billion on overall
energy supply infrastructure from 2011- 2035 ( avg USD 92 billion p.a.)
Investment Opportunities
Required energy investment, 2011-35 (USD billion)
Value through Partnerships
In 2012, Asia accounted for 71% of global LNG demand compared to 64% in 2011.
MUM-ZXE332(GAIL)-20120312-(MS)-(SM) The growth rates in the traditional markets of JKT are low and the additional volumes in Japan would primarily result from stoppage of nuclear plants, rather than growth in economy, if any. China arguably has largest Shale gas reserve which could affect its LNG demand and hence the market has uncertainty. While LNG demand in the Rest of Asia (e.g., Thailand, Indonesia, Vietnam) is increasing, it is relatively fragmented. Comparatively, India which is having fewer domestic resources and is growing is set to become one of Asia’s most important LNG destinations over the next 10 to 15 years.
Natural Gas is 24% of the World Primary Energy Mix. Source: BP Statistics 2012, Energy Outlook 2030
GAP = Total Demand - Domestic Supply ( in 2016-17) = 175 to185 MMSCMD = 64 to 68 bcm = 48.6 to 51.3 MMTPA This is the Total LNG Regas capacity needed in 2016-17 to meet the gap (Assuming no supply from transnational supplies)
Capacity of re-gasification facilities being augmented from 15 MMTPA to 50 MMTPA by 2016-17. GAIL is co-promoter of Dahej and Kochi terminals, and jointly owns the Dabhol Terminal with liquefaction rights
India needs considerable investment to build a reliable and adequate energy supply chain to provide modern energy to the large proportion of the Indian population whose energy demand is currently unmet. Investment in supporting infrastructure for energy is also indispensable; this includes transportation and import facilities, especially for gas and coal, and manufacturing base for equipment and components. Investment in this area should be aligned with the expected expansion of energy capacity from the planning stage.