energy mart 2004 1 fuel options for power sector planning and logistics for natural gas dr. s.c....
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1Energy Mart 2004
FUEL OPTIONS FOR POWER FUEL OPTIONS FOR POWER SECTOR PLANNING AND LOGISTICS SECTOR PLANNING AND LOGISTICS
FOR NATURAL GASFOR NATURAL GAS
Dr. S.C. SharmaDr. S.C. SharmaPETRONET LNG LIMITEDPETRONET LNG LIMITED
NEW DELHI-INDIANEW DELHI-INDIA2121stst January, 2004 January, 2004
2Energy Mart 2004
OVERVIEWOVERVIEW
INDIA’S ENERGY REQUIREMENTINDIA’S ENERGY REQUIREMENT GAS A PREFERRED FUEL FOR POWERGAS A PREFERRED FUEL FOR POWER PLANNING FOR GAS DEVELOPMENTPLANNING FOR GAS DEVELOPMENT LNG IMPORTSLNG IMPORTS PETRONET LNG LIMITEDPETRONET LNG LIMITED CREATING GAS TRANSPORTATIONCREATING GAS TRANSPORTATION ISSUES AND CHALLENGESISSUES AND CHALLENGES CONCLUSIONCONCLUSION
3Energy Mart 2004
INDIA’S ENERGY INDIA’S ENERGY REQUIREMENTREQUIREMENT
4Energy Mart 2004
WORLD ENERGY OUTLOOK WORLD ENERGY OUTLOOK 20252025
SHARE OF NATURAL GASSHARE OF NATURAL GAS
World energy demand to grow at 1.8%.
Natural Gas consumption to grow at 2.8%.
Gas consumption for developing Asia at 6.1%.
Growing Share of LNG New technologies to cut
costs Liquefaction Shipping Regasification terminal
LNG to compete with piped gas.
0
51015
202530
3540
1990 2001 2010 2020 2025
Oil N. Gas Coal Others Nuclear
5Energy Mart 2004
WORLD ELECTRICITY WORLD ELECTRICITY CONSUMPTION GROWTH (BUs)CONSUMPTION GROWTH (BUs)
Region 2005 2010 2015 2020 2025 Avg % change/yr 2001-25
Industrialized countries
8307 9200 10106 11030 11994 1.7
Dev. Countries 4886 5962 7172 8555 10038 3.5
Dev. Asia 3103 3851 4697 5634 6604 3.7
China 1545 1966 2428 2986 3596 4.3
India 528 662 802 958 1104 3.4
S. Korea 296 372 443 498 552 3.0
Other Dev. Asia 734 850 1024 1192 1352 3.1
Cent.& S America 782 925 1081 1302 1577 3.3
Total World 14960 17144 19482 22009 24673 2.4
Source : International Energy Outlook-2003
6Energy Mart 2004
ENERGY OUTLOOK FOR INDIAENERGY OUTLOOK FOR INDIA
Large Requirement to fuel economic growth
Energy consumption to grow at 3.2%
Highest growth projected for gas sector
Growth of 6.1% for gas demand
Demand of coal to grow at 2.6%
Oil demand growth at 4% Energy/GDP elasticity at
0.61 Large scope for efficient
utilization of energy.
320 355426
506595
690
0
100
200
300
400
500
600
700
2001 2005 2010 2015 2020 2025
MMTOE
Source: International Energy Outlook 2003
7Energy Mart 2004
FUELS FOR POWER GENERATIONCoal & Natural Gas
Coal production growth at 2% to increase from current 360 MMTPA to 580 MMTPA by 2025.
Natural gas demand growth at 6.1% from current level of 30 BCM to 96 BCM.
Environment protection major driver for large scale gas use.
360 382431 472 510
580
0
100
200
300
400
500
600
2001 2005 2010 2015 2020 2025
Coal Demand.(MMTOE)
Source: International Energy Outlook 2003
2337
5171
88 96
0102030405060708090
100
2001 2005 2010 2015 2020 2025
Gas Demand (MMTOE)
8Energy Mart 2004
PLANNING FOR NATURAL PLANNING FOR NATURAL GASGAS
New Exploration Licensing policy
Large discoveries of gas made
Dahej terminal by Dec.2003 LNG terminal by Shell at
Hazira Revival of Dabhol Kochi LNG terminal Replacing liquid fuels by
gas CNG in transport sector
9Energy Mart 2004
SOURCING NATURAL GAS TO SOURCING NATURAL GAS TO INDIAINDIA
Blocks awarded for exploration Pipeline gas import projects
under consideration.Iran-IndiaBangladesh-IndiaTurkmenistan-Pakistan-IndiaMyanmar-India
LNG import at peninsular locations
Dahej Cochin MangaloreHaziraKakinadaEnnoreMangalore
Cochin
Dahej
Assam
BAY OF BENGALARABIANSEA
.
Ennore
Kakinada
Iran India
Pipeline
Bdesh India
Pipeline
Mangalore
Hazira
10Energy Mart 2004
CREATING GAS IMPORT CREATING GAS IMPORT INFRASTRUCTUREINFRASTRUCTURE
LNG Terminal Capacity (MMTPA)
Dahej 5
Dahej Exp 5
Kochi 2.5
Shell Hazira 2.5
Dabhol 2.5
Mangalore 5.0
Kakinada 2.5
Total 25
About 22.5 MMTPA of LNG by next 5 - 10 years
11Energy Mart 2004
NATURAL GAS FOR POWER NATURAL GAS FOR POWER SECTORSECTOR
– Low gestation period
– Lower capital cost compare to coal base plant.
– 56% guaranteed gas turbine efficiency.
– Cheaper peak load power generation.
– Committed supply for power plant life cycle.
– Utilization of cold energy from LNG to enhance efficiency by 3 to 4%
– Natural gas is the most viable source to meet the power demand
12Energy Mart 2004
POWER GENERATION POWER GENERATION CAPACITY ADDITION(MW)CAPACITY ADDITION(MW)
0
10000
20000
30000
40000
50000
8th plan 9th plan 10th plan
Planned Achieved
Cap
acit
y (M
W)
•Fuel Supply – Major constrain for power capacity addition•Power capacity addition target achieved at •About 50% level in 8th & 9th plan
13Energy Mart 2004
WHY LNG /GAS IMPORTS TO WHY LNG /GAS IMPORTS TO INDIA ?INDIA ?
Large emerging demand Location advantage Environment concerns Imported Crude prices Lower share of natural gas Use of liquid fuels by gas based
industries Focus on shifting from
LPG/kerosene to gas Plan to replace 20% liquid fuels
by gas
India imports about 90 MMTPA of crude oil, 20% of of liquid products replaced by LNG can result in saving of 1.5 to 2.0 billion US$ on import of crude oil.
14Energy Mart 2004
PETRONET DAHEJ LNG PETRONET DAHEJ LNG TERMINALTERMINAL
15Energy Mart 2004
PETRONET LNG LIMITEDPETRONET LNG LIMITED
Petronet LNG Limited promoted by large Indian NOCs
Developing LNG terminals at coastal locations
Petronet developing LNG terminal with JV partners in Southern India.
Equity structure of Petronet is – 50% PSUs – 20% GDF and RasGas– 30% Banks, FIIs, ADB, IDFC
Facilitate growth of power & fertilizer sector
Dahej terminal designed to optimize facilities to minimize the costs
16Energy Mart 2004
Supplier selected through ICB process – first time in the world.
LNG SPA signed on 31st July 1999.
Salient features of the SPA•Quantity: 7.5 MMTPA (FOB basis)•Term : 25 years•supply : December2003 (Dahej) / 2006-07 (Kochi)
• RasGas is building 4.7 MMTPA of liquefaction Train
• Biggest single LNG train.
LNG SUPPLY TIE UP LNG SUPPLY TIE UP WITH RASGASWITH RASGAS
17Energy Mart 2004
DAHEJ LNG TERMINALDAHEJ LNG TERMINAL11ss LNG TO INDIA LNG TO INDIA
Project chain in place project mechanically
completed First ship to arrive on
29th January All agreements in place Initial supply to existing
consumers Replace crude oil &
products Capacity upgradation of
Dahej to 10 MMTPA.
18Energy Mart 2004
LNG TANKS & LNG TANKS & VAPOURAISERS-DAHEJ VAPOURAISERS-DAHEJ
19Energy Mart 2004
VIEW OF JETTY-DAHEJ TERMINALVIEW OF JETTY-DAHEJ TERMINAL
20Energy Mart 2004
CONTROL ROOM-DAHEJ TERMINALCONTROL ROOM-DAHEJ TERMINAL
21Energy Mart 2004
UNLOADING ARMS & JETTY-DAHEJUNLOADING ARMS & JETTY-DAHEJ
22Energy Mart 2004
LNG UNLOADING ARMS-DAHEJ LNG UNLOADING ARMS-DAHEJ
23Energy Mart 2004
Gas Transportation System in India
Major cross country grid
Local state grid
Local CNG Grid
Private Companies
South Gujarat
North Gujarat
K G Basin
Cauvery Basin
Assam
Mumbai
Delhi
GujaratHBJ Pipeline
GAS SUPPLY LOGISTICS GAS SUPPLY LOGISTICS INDIAINDIA
24Energy Mart 2004
INFRASTRUCTURE FOR INFRASTRUCTURE FOR LNG/GAS TRANSPORTATIONLNG/GAS TRANSPORTATION
HBJ pipeline up-gradation to accommodate LNG volumes from Dahej LNG terminal
HBJ capacity enhancement by 23 MMSCMD for Dahej LNG.
Pipeline from Dahej to Uran for LNG supply by Dec.2004
Upgrading pipeline network in Gujarat
Extension of HBJ to further northern states
National gas grid planned to connect LNG terminals, gas producing areas.
National Gas Grid
LNG Demand Areas
25Energy Mart 2004
MARKET FOR MARKET FOR LNGLNG
26Energy Mart 2004
MARKETING OF LNG FROM MARKETING OF LNG FROM DAHEJ TERMINALDAHEJ TERMINAL
LNG from Dahej project will cater to
–Gujarat consumers
–HBJ consumers
–Uran consumers.LNG to be used in refineriesLNG for CNG as a transport fuelLNG for shortfall consumers.
27Energy Mart 2004
MARKETING OF LNG FROM MARKETING OF LNG FROM DAHEJ PROJECTDAHEJ PROJECT
Requirement of LNG for refineries.
Others by GSPL & C2/C3/C4 extraction– IOC using LNG for 3
refineries– BPCL for Mumbai refinery– HPCL for Mumbai refinery– GSPL requested 1 MMTPA
LNG allocations.– C2/C3/C4 extraction – Deficit consumers – 27
MMSCMD
Target Consumers Total Shortfall (MMSCMD)
Shortfall in South Gujarat
3.75
Shortfall along HBJ 8.25
Naphtha to LNG Switchover (Fertilizer + Power)
8.40
Shortfall in Uran (Mumbai)
7.05
Total Requirement 27.05
28Energy Mart 2004
NATURAL GSREQUIREMENT FOR NATURAL GSREQUIREMENT FOR CNGCNG
CNG fastest growing market due to environment concerns
Currently about 160 CNG filling stations
175,000 Vehicles on CNG Program to implement CNG in
other major cities like Kanpur, Lucknow, Ahmedabad, Vadodara, Faridabad & Hyderabad.
Large incentive on cost of fuel using
CNG Conversion potential of 1.47 million vehicles assessed in Mumbai & Delhi itself
20% replacement will require 10 MMTPA of natural gas/LNG.
29Energy Mart 2004
PRICING OF NATURAL GASPRICING OF NATURAL GAS
Price of domestic gas currently controlled by Government
Gas price revision under consideration. Gas prices moving towards market parity. PLL had made facilities on most competitive terms. Price most competitive for new power capacity. Affordable for fertilizer capacity creation. Very high affordability for liquid fuel based fertilizer
plants. High affordability to replace MS / diesel / naphtha / FO
in transport, domestic, fertiliser and other industries.
30Energy Mart 2004
COST OF POWER WITH LNGCOST OF POWER WITH LNG
Fixed charges Rs/kwh
Variable Charges Rs/kwh
Total cost
Rs/kwh
Existing Gas based projects
LNG Price $/MMBTU
4.0$ / MMBTU
New Projects
LNG Price 4.25$ / MMBTU
Project-Imported Coal-New
0.60*
0.90*
1.25
1.35
1.35
1.25
1.95
2.25
2.50
*Average fixed charges for all the gas based projects HBJ/Gujarat*Fixed charges for new gas based project
Natural gas a viable fuel for power etc.
Higher combined cycle efficiencies
Facilitating peak load power
Lower emissions
31Energy Mart 2004
ISSUESISSUES
•Dismantling of Administered prices in phases
• Setting up of Petroleum Regulatory Board
• Introduction of Open Access principle
• Framework of Transportation Tariff
• Unbundling of Transportation and distribution
• Multiple producer prices
• Distance based transmission tariff
32Energy Mart 2004
THANKSTHANKS
DISHA TO PROVIDE RIGHT FUEL FOR LARGE DISHA TO PROVIDE RIGHT FUEL FOR LARGE SCALE POWER DEVELOPMENT IN INDIASCALE POWER DEVELOPMENT IN INDIA