The Green Fuel of Future

UNDERSTANDING
NATURAL GAS By,
Bhargavi Karlapudi

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 What is Natural Gas?
Found underneath earth’s surface

Combustible mixture of hydrocarbons

Typical Composition of Natural Gas
Methane CH4 70-90%

Ethane C2H6

Propane C3H8 0-20%

Butane C4H10

Carbon-di-oxide CO2 0-8%

Oxygen O2 0-0.2%

Nitrogen N2 0-5%

Hydrogen sulphide H2S 0-5%

Rare gases Ar, He, Ne, Xe traces

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 Value Chain
Value Chain of Natural
of Natural Gas Gas

Exploration Extraction Production

Transportation

Consumers Distribution

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Benefits of ofNatural
Value Chain Gas
Natural Gas

Convenience

Environmental Versatility
Benefits

Natural Gas

Consistent
Reliable Savings
Supply

Safer

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 Types and of
Value Chain Consumers
Natural Gas

Natural Gas

PNG CNG LNG Types

Domestic Commercial Industrial Transport

Consumers

PNG – Piped Natural Gas

CNG – Compressed Natural Gas
LNG – Liquefied Natural Gas

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 Applications if NG

Applications
Applications

Domestic Commercial Industrial Transport

Power/
Cooking Power
Cooking Cogeneration Fuel

Micro
Cooling
Power Feed Stock
Cooling
Space Heating/ Direct Firing/
Heating Fuel
Cooling Heating Indirect Heating

Hot water Cooling

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 NATURAL GAS
INDUSTRY IN INDIA

ential
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 Indian Gas Market Structure
Regulated by DGH & MOPNG To be regulated by PNGRB

Upstream Midstream Downstream

ONGC

Transport
RIL GSPL GAIL Power

GSPC Fertilizer
GAIL GGCL

Pvt/JV
Cairn/GE/Niko RGTIL RIL Industrial

LNG TNGC Domestic

Hazira AGCL
Shell
Dahej AGCL Commercial
MGL/IGL/BGL
PLL
Dahej - Ext
Others Transport
Dabhol SEL
Kochi
PLL
Transnational Bulk Marketers/Shippers
Pipelines
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Sources of Natural Gas

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Intensive Exploration & Production

 26 Sedimentary Basins – 3.14 million sq km

 Only 19% of the area extensively explored

 Domestic Hydrocarbon Scenario (as on 1.04.2007):

Prognosticated Resources (Oil + 28-32 BMT

Oil Equivalent Gas)
Established Geological reserves 8.2 BMT
(O + OEG)
O + OEG already produced 1.42 BMT

Balance Recoverable Reserves 1.85 BMT

(O + OEG)
Current Oil Production 32.19 MMT

Current Gas Production 88.22

MMSCMD
Source: DGH / MoP&NG

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Massive Investments

Total Investment required

in the proposed projects
is about USD 15-20 bn

Transnational Gas pipelines planned

 Iran-Pakistan-India pipeline
 Myanmar-India Pipeline
 Turkmenistan-Afghanistan-
Pakistan-India pipeline

Source: MoP&NG, Infraline, IMaCS Research

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 Demand and Supply

East India –
North, West 6% share by
India 68% 2012 RIL CBM
share by 2012 5 MMSCMD

RIL Shahdol
5 MMSCMD

Petronet Dahej OIL

30.60 MMSCMD 5 MMSCMD
Gujarat Shell Hazira RIL NEC
6.10 MMSCMD 6.30 MMSCMD 12 MMSCMD
Dabhol Rava
Bombay Offshore 18.0 5 MMSCMD
56.42 MMSCMD MMSCMD Krishna Godavri
South India –
80 MMSCMD
26 % share
by 2012
Petronet Kochi
LNG Terminal 4.50 MMSCMD

Source: GAIL Infraline reference book

Supply will be less than demand

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 Exploratory Government Measures
New Exploration Licensing Policy
 110 Production Sharing
contracts in 5 New Exploration
Licensing Policy (NELP) rounds
 30 discoveries with hydrocarbon
in-place reserves of over 600
MMT in last 3-4 years
 Investment commitment of about
USD 5 bn in exploration phases
under NELP
 Perception of prospectivity of
Indian sedimentary basins
reflected in NELP VIII response
Coal Bed Methane Policy
 16 Blocks already awarded
with production potential of 25
MMSCMD under Coal Bed
Methane (CBM) I & II rounds
Exploratory  Significant commercial finds in
Measures blocks held by RIL and ONGC
 First commercial production of
CBM by 2007-08
 54 Bids received for 10 CBM
blocks offered in the third
round
 Award of blocks in near future
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 Getting Natural Gas to Market

Total reserves 985 bcm Existing

• 2,800 Kms of HBJ pipeline

Rajasthan traverses from Hazira to
4.5 bcm
Delhi,Gujarat,MP,UP and
Rajasthan.
• 433 Kms of GSPL whcich
HBJ Pipeline traverses from Hazira to
Petronet Dahej Tripura Kalol in Gujarat
Gujarat Shell Hazira 18 bcm
82 bcm • 610 Kms of Dahej –
Dabhol
Vijaipur pipelines by Gail
Bombay Offshore
380 bcm
Krishna Godavri
380 bcm

Source: UBS

Infrastructure is a major issue

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 Pipelines-Existing & Planned
Significant investment requirements and rapidly growing demands are
challenges to infrastructure development
• Infrastructure to connect demand centers
with supply sources
• Infrastructure to develop regional markets
• Pipelines connecting Southern
states with supply sources
Delhi
• Pipelines connecting Eastern
Dadri states with supply sources
Jagdishpur • Pipelines to connect East and
West regional markets
Vijaipur • Pipelines to connect East and
North regional markets
Dahej Kolkata • Requires anchor loads e.g.
Hazira power, fertiliser
Uran Pune • State grids to connect major
Dabhol Hyderaba demand centres within states
d Kakinad
a • National gas market expected to evolve
Goa
from regional gas hubs once infrastructure
Bangalor is available
Mangalore e Chennai
Existing / Planned LNG Terminals
Coimbatore Existing Transmission Lines
Kochi
Planned Transmission Lines
South India connectivity in next phase
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 Present Status

• PNGRB announced CGD to 200 cities in next 5 years

• Board has received EOI for 70 cities
• 13 cities have been awarded licenses to various companies by
GoI
• Average gas requirement per city is ~0.5 to 1.0 MMSCMD by end
of 15-20 years
• Average investment per city is Rs.300 Crores
• Approximate investment in in next 5-7 years is ~Rs.10,000

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 Challenges

• Basic Challenges
– Energy deficit market and large demand supply gap in natural
gas
– Huge unexploited potential
• Making up the shortfall through
– Unlocking India’s upstream potential through enhanced
exploration
– Encouraging development of new sources-CBM
– LNG Imports
• Critical Challenges
– Shift to market-based pricing for domestic gas and LNG
– Adequate policy measures to develop the natural gas market

Natural Gas has an important role to play in India’s energy needs

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Players
S.NO Name of Company State District/Town Current Status
Sibsagar Operational
Dibrugarh Operational
Jorhat Operational
1 Assam Gas Company Ltd Assam
Golaghat Operational
Lakhimpur Operational
Tinsukia Operational
Indore Planned
2 Avantika Gas Ltd Madhya Pradesh
Gwalior Planned
Vijaywada Operational
3 Bhagya Nagar Gas Company Ltd Andhra Pradesh
Rajamundry Operational
4 Cairn Energy Ltd Proposed
5 Central UP Gas Ltd UP Kanpur Proposed
6 Chirotar Gas Sahakari Mandali Ltd Gujarat Anand Operational
7 Essar Proposed
8 Gail Authority of India Ltd Cross Country Operational
Lucknow Planned
9 Green Gas Limited UP
Agra Planned

Ahmedabad Operational

Gujarat
Vadodara Operational
10 Gujarat Adani Energy Ltd
Por Planned
Noida Planned
UP Lucknow Planned
Khurja Planned
Haryana Faridabad Planned
Udaipur Planned
Rajasthan
Jaipur Planned

26 Players showing interest – 3 Major Transmission Players

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Players – Contd.,
S.NO Name of Company State District/Town Current Status
Surat Operational
Baruch Operational
11 Gujarat Gas Company Ltd Gujarat Ankhleshwar Operational
Jhagadia Planned
Vapi Planned
12 Gujarat State Petroleum Corporatiom Ltd Gujarat
Ansansol
13 Great Eastern Energy Corporation Ltd West Bengal Durgapur Planned
Ranigunj
Gurgoan Operational
Rohtak Planned
Haryana
Rewari Planned
14 Haryana City Gas Distribution Ltd
Jhazzar Planned
Neemrana Planned
Rajasthan
Bhiwadi Planned

15 Indraprastha Gas Company Ltd Delhi Delhi Operational

16 Kolkata City Gas Company West Bengal Kolkata Planned

Mumbai Operational
Thane Operational
17 Mahanagar Gas Company Ltd Maharshtra Navimumbai Operational
Mira-Bhayander Operational
Paste Planned
18 Maharshtra Natural Gas Company Maharshtra Pune Planned
19 Reliance Industries Ltd Cross Country 55 Towns Proposed
20 Reliance Natural Resources Ltd Proposed
Mehsana Planned
21
Sabarmati Gas Ltd Gujarat Sabarkantha Planned
22 Siti Energy Ltd UP Moradabad Operational
23 Tripura Natural Gas Company Ltd Tripura West Tripura Operational
24 Vadodara Muncipal Corporation :td Gujarat Vadodara Planned
25 Torrent Power Gujarat Dahej
26 GMR Energy

Many other players interested to foray into CGD Business

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 Gross Sales of Gas Players

Fig in Million Rs.

Company Operations Gas Revenues Total Revenues

ONGC Exploration 75,528 650,494
RIL All 34890 174350
IOC All 2307290
GAIL Transmission 219836 219836
GGCL CGD 4463 4463
IGL CGD 9621 9621

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