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Pipelines: Policies, Regulations & RestrictionsSudha Mahalingam, Colombo Feb 29-Mar 1, 2012
Asia Energy Security Summit 2012
Salience of Natural Gas
Gas as bridge fuel for this century
Abundance, climate-friendly, availability in the neighbourhood
Longer pipelines, transcontinental
LNG makes it fungible Asia-Pacific has 70% growth in
LNG Capacities Is LNG price getting globalised,
delinked from crude?
Primary Energy Mix
coal30%
oil34%
gas24%
hydro6%
nuclear5%
renewables1%
World
coal52%
oil30%
gas11%
hydro5%
nuclear1%
renewables1%
India
Natural Gas
India’s consumption of natural gas has risen faster than any other fuel in the recent years.
Industries such as power generation, fertilizer and petrochemical production are shifting towards natural gas and play a dominant role in creating demand for it.
Using the above Natural gas CAGR, we forecast the demand 20 years hence. However, assuming that slowly the CAGR with match the GDP of India, we use g=10% from 11th year and g=7% from 16th year.
power43%
fertil-izer30%
Pet-ro-
chemicals11%
CGD6%
others10%
Current Sector-wise consump-
tion
Total demand 263 mmscmd
CAGR % Share / weights
power 9.0%-21.37% 43% 9.189100%
fertilizer 5% 30% 1.500000%
petrochemicals 13.60% 11% 1.496000%
Natural Gas demand CAGR 12.185100%
2010
-11
2012
-13
2014
-15
2016
-17
2018
-19
2020
-21
2022
-23
2024
-25
2026
-27
2028
-29
0
100
200
300
400
Natural Gas Demand
Year
Billion
cu
bic
mete
r387.819
Since the only mode of transportation of Natural Gas on land is by pipelines only, so by the year 2030, the Natural Gas pipeline
capacity will be 387.819 bcm =1062.5178 MMSCMD ≈ 1100 MMSCMD
Natural Gas Demand
Natural Gas: Future Opportunities Import of gas through pipeline and in the form of LNG. Increase the capacity of import terminals for LNG to 26 million
tonnes per year from 13.7 million tonnes. LNG terminals in India:
Location Capacity (MMTPA) Status
Dahej 10 to 14 Existing with AugmentationHazira 2.5 to 5 Existing with Augmentation
Dhabol 5 Under construction
Kochi 5 Under constructionMundra 6.5 ProposedEnnore 5 ProposedPipavav - Proposed
Kakinada - Proposed
Paradip, Dhamra, Gopalpur - Proposed
Mangalore - ProposedJamnagar - Proposed
How do we incentivise LNG? Asian sellers & Asian buyers –
Australia, Indonesia, PNG, Malaysia, Iran, Qatar, Turkmenistan
China, India, Taiwan, S.Korea Common user terminals? Regulated cost-plus tariffs?
Natural Gas: Future Opportunities
Turkmenistan–Afghanistan–Pakistan–India (TAPI) pipeline: 38mmscmd of Gas to India.
Schlumberger, estimates an initial gas-in-place 300-2,100 trillion cubic feet (TCF) in Indian shale gas basins in Damodar Valley. Reliance’s KG D6 field has proven reserves of just 7-8 TCF.
India’s pipeline network needs expansion to get the gas to market. Investment required: Rs 350 billion or US $7 billion
Journey to the Year 2030
Natural Gas Pipelines
Petroleum Product Pipelines
LENGTH
LENGTH
CAPACITY
CAPACITY
12000 Kms
300 mmscmd
13000 Kms
74 MMT
1100 mmscmd
400 MMT
45000 Kms
30000 Kms
How do we get there?
Policy : 33% common carrier Tax breaks for common carrier
capacity
Regulations - PNGRB
Authorisation – Trunk & CGD Tariff Common Carrier Access Code Affiliate Code TSSSS
Existing Pipelines
HBJ + GREP -5340km Dahej-Uran-Dabhol – 744 km EWPL – 1385 km Dadri-Panipat -132 km Regional networks in Mumbai,
Gujarat, Cauvery Basin Assam, Tripura etc
Total length: 13170 km
Pipeline grid in India
Licences Issued prior to PNGRB Chainsa-Jajjar-Hissar Dadri Bhawana Nangal Kochi-Bangalore-Mangalore Jagdishpur-Haldia Dabhol-Bangalore Kakinada-Howrah Kakinada-Vijayawada-Chennai Chennai-Tuticorin Chennai-Bangalore-Mangalore
Licenses issued by PNGRB Mallavaram-Bhopal-Bhilwada-
2000 km Mehsana-Bhatinda -1600 km Bhatinda-Jammu-Srinagar -725
km Surat –Paradeep – 2000 km
Challenges
Chicken or egg? State or Market? Viability gap
funding Disparities in tariff Stranded capacities – market
risk? National Gas Management
System Differing taxation precludes
swaps?
