Download - Indian natural gas market ppt
JAIPURIA INSTITUTE OF MANAGEMENT
APROJECT ON
MANAGERIAL ECONOMICS
SUBMITTED BY:-
ROMANA AFTABHEENA KUMARI
ANSHU AGGARWALKANAK KUMARISATYAM KUMAR
NILANSHU PANDEY
INDIAN NATURAL GAS MARKET
INTRODUCTION
Natural gas is one of the most abundant energy resources on the planet, yet more than one-third of global natural gas reserves remain stranded and undeveloped.
70% of gas traded internationally is exported by pipeline; 30% by liquefied natural gas (LNG).
Alternative technologies have been refined and developed in recent years but are yet to make serious inroads into the challenges of developing remote gas fields
TECHNOLOGIES AVAILABLE TO TRANSPORT NATURAL GAS LONG DISTANCES
CONSUMPTION TRENDS
ENERGY MIX & EMISSIONS BY SOURCES: INDIA
ENERGY MIX PROPOSED WITH 25 BCF/D NATURAL
GAS CONVERSION
12%
36%33
%
4%8%1%5%
coaloilnatural gashydronuclearwindblomass/others
ENERGY MIX TODAY
20%
39%
23%
4%
8%1%5% coal
oilnatural gashydronuclearwindblomass/others
DEMAND AND SUPPLY GAP FOR NATURAL GAS
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012
0
50
100
150
200
250
300
SupplyDemand
CHANGES IN DEMAND AND SUPPLY GAP IF ADDITIONAL GAS IS ANTICIPATED (PLAN XI)
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012
0
50
100
150
200
250
300
SupplyDemand
INDIA NATURAL GAS SECTOR
CURRENT PRICING MECANISM IN INDIA
Pricing of gas- Administered price mechanism
In Xth plan, under APM-gas from nominated ONGC & OIL fields priced uniformly at Rs.2,850/(SCM). uniformly for all customers except in North East, wherein the customers were charged a price of Rs.1700 per 1000 SCM
With effect from 1.7.06, the gas pricing for APM gas was changed. all available APM gas would be supplied only to the power and fertilizer sector consumers.
All other consumers would be supplied natural gas at market
related price subject to a ceiling of ex-Dahej RLN. Free market gas -JV/Private sector, re-gasified LNG etc.
DEMAND SIDE ISSUE
On the demand side, the challenge is to perform a transition to prices closer to market prices while maintaining the consumer’s competitiveness. This price, more than twice the former APM price level fixed by the government, has unsurprisingly become a reference point. Being a private sector company, RIL cannot sell gas at under cost; therefore their clients have to be able to pay cost-plus for any of their gas. Indeed gas availability and affordability for customers are crucial for gas development in India.
SUPPLY SIDE ISSUE
From the supply side, keeping artificially low APM prices often sends the wrong signals: indeed, gas prices have to be high enough in order to attract upstream investments, and cover production costs and the recovery of capital in order to limit under-recoveries from PSUs. These, unsurprisingly, complained that low prices had been resulting in substantial losses for them.
INDIAN GAS MARKET OVERVIEW
MAJOR PLAYERS
E&P -
- ONGC, OIL, RELIANCE, BRITISH GAS, CAIRN, NIKO, GSPC
LNG -
- PETRONET LNG LTD (JV OF PSU,s, GDF, ADB)
- SHELL HAZIRA LNG LTD (SHELL, TOTALFINA-ELF)
- RATNAGIRI PROJECT
GAS TRANSMISSION & MARKETING - GAIL (INDIA) LTD
REGIONAL / RETAIL - MGL, IGL, GCC, GSPC, AGC, TNGCL, PLAYERS BGL, GSPL, GGL & OTHERS
MARKET SHARE
32%
21%
24%
19%
4%
Market share
RELIANCEGAILONGCCNGOTHERS
THANK YOU…