Presentation

on Small Scale LNG

PETRONET LNG LIMITED

New Delhi
 Content

 Application of LNG as Fuel

 Worldwide use of LNG as Automotive Fuel

 Factors prompting use of LNG as Automotive Fuel in

India

 PLL’s Target

 E&Y Study and Recommendations

 PLL Activities on LNG as an Automotive Fuel

 Project Plan and Support from Authorities

 MOUs Signed & Industrial Activities

Application of LNG as Fuel
 LNG As Fuel Applications – Target Markets
And Means Of Transport

Source: IGU
Worldwide use of LNG as Fuel
 Road Transport in China

 China is paving the way for LNG in road transport

Year 2012 2013 2014 2015
Number of LNG 70,000 100,000 250,000 300,000
trucks
Number of LNG n.a. n.a. 2,122 2,600
fueling stations
 OEM active involvement: 60+ OEMs

Data Source - ENN

Factors prompting use of LNG as
Automotive Fuel in India
 Falling Crude Prices
and effect on LNG Prices

21.00 JKM West India JCC LNG

20.00
19.00
18.00
17.00
16.00
15.00
14.00
13.00
12.00
11.00
10.00
9.00
8.00
7.00
6.00
5.00
4.00
 Comparison Diesel v/s LNG

Percentage
BIS – IV BIS -VI norms Natural Gas
S. No Parameters difference BIS
Diesel (g/km) (g/km) Emissions
IV & BIS VI

1 CO 0.50 0.50 0% 0.22

2 NOx 0.25 0.06 76% 0.25

3 PM 0.025 0.005 80% 0.0029

Diesel LNG
Major Expanses by refineries for
making Diesel fuel as Euro-6 Fuel is as such Euro-6 compliant.
Compliant.
Major Expenditure by truck
Very Minimal expenditure on ‘after treatment’ due
manufacturers for ‘after treatment’
to absence of particulate matter.
of Flue gases.
 Comparison LNG v/s CNG
Energy Density
 Since space occupied by fuel is a very important factor in moving
vehicles, we need to understand the term energy density
 It is the energy contained in a fuel per unit volume occupied by that fuel
 LNG achieves a higher reduction in volume than CNG so that the
(volumetric) energy density of LNG is 2.4 times greater than that of
CNG.
LNG CNG
PLL’s Target
 Diesel Consumption In India
Year 2010 2011 2012 2013 2014 2015
-11 -12 -13 -14 -15 -16

Total DO consumption (Million MT) 60.0 64.7 69.1 68.4 69.4 74.6

Growth in consumption of DO from

2010 to 2016
Growth Growth (%)
(Million MT)
2011-12 4.7 7.8
2012-13 4.4 6.8
2013-14 -0.7 -1.0
2014-15 1.0 1.5
2015-16 5.2 7.5
Average 2.9 4.5
Data source: PPAC & INDIA TODAY
 Medium & Heavy Commercial Vehicles (Trucks)

Data Source- ICRA Report

SN Year Volumes Growth

1. 2013-14 1,61,909 28%

2. 2014-15 1,95,918 21%

3. 2015-16 2,60,923 25%

Yearly Average 2,06,250 25%

 PLL’s Target
 Introduce LNG as an alternative fuel for transportation
(commercial heavy vehicles like trucks & buses) and small
industries.
 Target – 2 Million MT
 1 Million MT- through LNG fuelled trucks (1.3% of the
total diesel oil consumption (74.6 Million Tonnes) for
year 2015-16).
o Trucks required- about 33,000 nos. (i.e a small
percentage of the annual additions)

 1 Million MT- through 300 small industries consuming

10 T per day.
 Key Drivers

 The key drivers are environmental, economic and

geopolitical.

 Benefits of LNG in terms of CO2, SOx, NOx and

particulate emissions.

 Stricter regulations on the marine sector are

stimulating the use of LNG as bunker fuel in Europe &
USA.

 Most of the growth is seen in China.

 E&Y Study
and Recommendations
 LNG’s competitiveness vis-à-vis diesel

Brent Price (USD/ BBL) 45.0 60 80 100 120

Delivered LNG Price (USD
/ MMBTU) - NCV 13.7 15.8 18.9 22.1 25.2

FOB Arab Gulf

Diesel ($ /BBL) 52.1 66.0 88.1 110.1 132.1
Retail Diesel Price
(INR / Litre)* 52.31 55.6 62.0 68.4 74.6
Retail Diesel Price
($ / MMBTU) 21.24 22.6 25.2 27.8 30.3
Difference with
Delivered LNG 35% 30% 25% 21% 17%
(NCV) at Delhi

Specific Excise Duty

(INR / Litre)* 17.3 14.0 10.5 7 3.5
► LNG expected to be competitive against diesel as illustrated in the table above – even if excise duty reductions are considered

* Retail Diesel Price in Delhi calculated based on specific excise duty . Price applicable from 1st August 2016
 LNG’s competitiveness vis-à-vis diesel – Without Taxes

Brent Price (USD/ BBL) 45.0 60 80 100 120

Delivered LNG Price 16.6
11.6 13.8 19.4 22.1
(USD / MMBTU) - NCV

FOB Arab Gulf

Diesel ($ /BBL) 52.1 66.0 88.1 110.1 132.1
Retail Diesel Price
(INR / Litre)* 27.3 32.7 42.0 51.3 60.6
(without Taxes)
Retail Diesel Price
($ / MMBTU) )* 11.1 13.3 17.0 20.8 24.6
(without Taxes)
Difference with
Delivered LNG -4.7% -3.8% 2.8% 7% 10%
(NCV) at Delhi

LNG expected to be competitive against diesel as illustrated in the table above – even if excise duty reductions are considered

* Retail Diesel Price in Delhi calculated based on specific excise duty . Price applicable from 1st August 2016. Without Taxes
Delhi – Mumbai Route
 PLL’s activities on
LNG as an Automotive Fuel
 Activities Undertaken
Regulatory Aspects
 MOPNG recommended for inclusion of LNG as an automotive fuel in
Central Motor Vehicle Rules.

 MORTH has given mandate to testing agencies like CIRT, ARAI to

prepare a draft report suggesting changes wherever applicable in

existing CNG standards.

 JS MORTH also mentioned that the only change will be regarding

component standards; Emission standards shall be similar to CNG

 CIRT has conducted multiple meetings with all stake holders and

prepared a roadmap.
 Activities Undertaken

 Draft changes to AIS-24 and AIS-28 were made and case was

presented in Central Motor vehicle Rules(CMVR) Technical Standing

Committee where it received positive response from members

 It is expected that MORTH will issue draft changes very soon

Approvals from PESO

 Recommendation of MOPNG to Ministry of Commerce & Industry, for

standard formulation of LNG fuelling stations through PESO.

 PESO is formulating a team to deliberate the standards to include LNG

dispenser stations
 Activities Undertaken
Vehicle and LNG Infrastructure Development
 Meeting with CEO & MD of Tata Motors and sensitized him about the future

growth of the LNG trucking market. Regular follow up continues.

 Meetings with truck fleet operators like M/s Gati, M/s Safexpress to understand

their requirement.

 Study undertaken through consultant E & Y. Routes chosen for development of

pilot project along Delhi-Mumbai (NH-8) and Kochi-Mangalore route.

 Discussions carried out with HPCL and Gujarat Gas for development of LNG

fuelling stations. Recce of National Highway-8. Retail Outlets of HPCL identified

for installation of LNG fuelling stations.

 Locations also identified in the State of Kerala – Government to facilitate

Project Plan and Support from
Authorities
 Project Plan

 Development of Pilot route with establishment of LNG fuelling stations.

The distance between two stations being 250 km. (6-7 stations will be
planned on Delhi-Mumbai corridor and 3 stations on Kochi – Mangalore
route).

 100 trucks powered by LNG to ply on Delhi- Mumbai corridor and Kochi
– Mangalore corridor.

 Finalization of business plan with OEMs including Tata Motors & Ashok
Leyland (key players in heavy commercial transportation) for trucks and
buses.

 PESO to be pushed for formulation of standards & inclusion of LNG fuel

tank and dispenser stations in Gas cylinder rules.
 Phase-1 (Pilot Project) Within One(1) year

The following parameters have been considered for the pilot project:
 Diesel Fuel consumption / Freight movement around corridors
 Distance from LNG terminals
 Ease of establishing pilot project
 Ease of monitoring and evaluation of the project
 Investment in Chain– Pilot Project

S.No Element Related Cost

1. Cost of a typical LNG station, equipped with 60 KL Rs. 5.0 Cr.

storage tank and other equipments and piping.

2. Cost of 9 LNG stations (A) Rs. 45 Cr.

3. Cost of a truck for transportation of LNG with storage Rs. 1.3 Cr.
capacity of 17 tonnes

4. Cost of 10 LNG transporting trucks (B) Rs. 13 Cr.

5. Cost of 1 LNG Truck Rs. 0.45 Cr.

6. Cost of 100 numbers LNG Trucks (C) Rs. 45 Cr.

7. Total (A+B+C) Rs. 103 Cr.

Phase-2 - within three(3) years
The top 5 freight corridors in
India are:
 Jammu-Delhi-Mumbai
 Delhi-Chennai
 Mumbai-Chennai
 Delhi-Bangalore
 Kandla-Mumbai-Kochi

The following parameters have

been considered for Phase -2
of the project:
 Diesel Fuel consumption /
Freight movement around
corridors
 Distance from LNG terminals
 Investment in Chain– Phase-1 (0.3 MMTPA)
Covering Major National Highways
S.No Element Related Cost (Rs cr)

1. Cost of a typical LNG station, equipped with 60 KL 5.0

storage tank and other equipments and piping.

2. Cost of 100 LNG stations (A) 500

3. Cost of a truck for transportation of LNG with storage 1.3

capacity of 17 tonnes
4. Cost of 100 LNG transporting trucks (B) 130

5. Cost of one Truck Loading Bay at Terminal 5

6. Cost of 7 numbers Truck Lading Bays (C) 35

7. Cost of 10,000 trucks @ Rs 45 lac per truck (D) 4,500

8. Total (A+B+C+D) 5,165

Phase-3 (Pan India Roll-out) (5 – 7 Years)
The following parameters
have been considered for
Phase -3 of the project:

 Distance from LNG

terminals
 After 3-4 years LNG
infrastructure shall be
developing on East
Coast of India
 Ease of monitoring and
evaluation of the Project
 Investment in Chain– Pan India (1 MMTPA)
S.No Element Related Cost (Rs cr)

1. Cost of a typical LNG station, equipped with 60 KL 5.0

storage tank and other equipments and piping.
2. Cost of 250 additional LNG stations (A) 1250

3. Cost of a truck for transportation of LNG with storage 1.3

capacity of 17 tonnes

4. Cost of 250 LNG transporting trucks (B) 325

5. Cost of one Truck Loading Bay at Terminal 5

6. Cost of 14 numbers Truck Lading Bays (C) 70

7. Cost of additional 23,333 trucks @ Rs 45 lac per truck 10,500

(D)
8. Total (A+B+C+D) 12,145
 Support from Authorities

 Fuel quality standards equivalent to CNG are required to be modified

with respect to LNG usage by Bureau of Indian Standards which comes

under the Ministry of Consumer affairs.

 As the standards for LNG Fuel tank and dispenser stations are not

existing, help is required to push organizations like PESO/OISD to

formulate standards at the earliest; comes under the Ministry of
Commerce & Industry.

 This model can be economized if existing OMC Retail Outlets can be

augmented with LNG infrastructure. For pilot project, such arrangement

is desired to be put in place with existing OMCs with the help of
MOPNG.
 MOUs Signed and
Industrial Activities
 MOUs signed and Industrial Activities

 MOU between PLL and ENGIE

 Discussions with Exxon Mobil – more interested on

the Kochi Marine side

 MOU between PLL and VEnergy for LNG project in

National Waterway 1.

 MOU between PLL and IMC.

 Solution is being worked out for NTPC Kayamkulam.

 Key Points
 PLL and ENGIE has signed a non-binding MOU on 24th
June 2016 valid for a period of 2 years.

 The purpose of entering into this MOU is to jointly

investigate and explore Small Scale LNG projects in
Indian sub-continent and world-wide.

 Both the entities have shown common interest for

following market segments:
 LNG to power,
 LNG as fuel to tucks and inland waterways,
 LNG to industries, and
 LNG transportation by ISO containers and small scale LNG
carriers.
THANK YOU