Liquefied natural gas is used to transport natural gas over long distances, often by sea. In most cases, LNG terminals are purpose built ports used exclusively to export or import LNG.

LNG a physical change process converting natural gas to liquid for ease of transportation.

LNG has the obvious advantage of being established

for the past 40 years and has to-date enjoyed robust

growth and has an excellent safety record.

In recent years LNG has grown from an industry of

80 (MMTPA) in 1993 to 140 (MMTPA) today and

is set to double in the next 10 years.

The supply-demand balance for LNG in the short to medium term is forecasted to remain very competitive putting considerable pressure on the players to develop competitive projects and gain market share.

In asia some of the existing liquefaction terminals are as follows:

1. Oman LNG

2. Qatar gas, Qatar

3. Ras Laffan, Qatar

4. Rasgas, Qatar

LNG terminals in India are:

Dahej Terminal, Petronet LNG Ltd, Gujarat

Hazira Terminal, Hazira LNG Pvt Ltd, Gujarat

Dabhol Terminal, Ratnagiri Power (NTPC) LTD,

Maharashtra from Nov 2009

Kochi Terminal, Petronet LNG Ltd, Kerala

Currently, India has two operational LNG import

terminals, Dahej and Hazira. India received its first

LNG shipments in January 2004 with the start-up of

the Dahej terminal in Gujarat state. Petronet LNG, a

consortium of state-owned Indian companies and

international investors, owns and operates the Dahej

LNG facility with a capacity of 5 million tons per

year (mtpa)

India’s second terminal, Hazira LNG, started

operations in April 2005, and is owned by a joint

venture of Shell and Total. The facility has a

capacity of 2.5 mtpa, which may be expanded to 5

mtpa, in the future.

The 5 mtpa, LNG processing plant in Dabhol

continues to face delays. Currently operating as a

power plant, the LNG receiving terminal may be

operational in 2011 after dredging operations are

complete so that a breakwater can be built.

In addition, Petronet LNG has begun construction of

a 2.5 mtpa LNG import facility at Kochi. The

facility is expected to be completed in the first

quarter of 2012 and has secured a 1.5 mtpa supply

from Australia’s Gorgon LNG project

In order to secure supply of natural gas to India and

meet growing demand, India is currently looking to

invest in liquefaction projects abroad. For example,

ONGC and the UK-based Hinduja Group are

considering service contracts in Iran to supply 5

mtpa of LNG to India. The country is also

exploring the possibility of investing more in the

Sakhalin I LNG project.

Why Natural Gas? The Fuel of the 21st Century

‘Natural Gas could overtake oil as the global number

one fuel of choice by 2025’ mln boe/d

0

25

50

75

100

125

150

OilGas

1980 1990 2000 2010 2020 2030

Natural Gas as the fuel of the twenty-first

century with increasingly diverse supply,

driven by emerging technologies and

the development of broader gas markets.

Clean

Abundant

Cost competitive

bcf/d

North America

0

10

20

1990 2003 2020

0

10

20

1990 2003 2020

Europe

8%

17%

2%

14%

Asia

0

10

20

1990 2003 2020

62%

50%

6%0.3%

65%

Korea, Japan, Taiwan, India and China

Sources: Cedigaz, bp statistical review 2004, Shell

LNG Imports (% gas supply)

1990 2003

Evolution of LNG Markets….increasing global trade

2020

The World Energy Outlook projects that world’s primary

energy needs would grow by 16.8 billion TOE in 2030.

As for natural gas, the global gas demand is projected to

increase to around 4.3 TCM in 2030 i.e. an average growth rate

of 1.5% per year with the share of gas in the global primary

energy mix.

But that would depend largely on the world economic growth,

gas prices and government policies and hence there are large

uncertainties.

Estimated Sector-wise Demand*(MMSCMD)

Sector ‘11-12 ‘16-17Fertilizers 79.36 95.0

Power 148.38 221.0

City Gas 15.83 31.0

Industrial 21.96 45.0

Petrochemical / Refineries 23.25 38.0

Sponge Iron / Steel 7.86 12.0

Total Demand (A) 300.64 442.0

Estimated Domestic Gas Supply**(MMSMCD) - Optimistic

Source ‘11-12 ‘16-17 ONGC (FIRM + INDICATIVE) 51.65 75.0

OIL 10.00 10.00

Pvt. / JVs (As per DGH) 109.07 180.09

Total Projected Supply (B) 170.72 265.0

Demand – Supply Gap (C) = (A – B) 129.92 177.0

* - 11-12 figures are as per XIth Five -year Plan estimates and 16-17 figures are projected.** - Based on revised estimate of ONGC (Firm + Indicative) and DGH.

Supply Side:

Creation of economically sound LNG export

projects

Ensuring commercialization of resources in gas-

rich countries for their economic benefits.

Consumption Side:

Establishing a solid network of import facilities

These facilities must be built on a stable regulatory

and economic foundation to ensure reliable, long-

term service to customers at competitive prices.

Linking Source to Markets:

Linking through transportation and flexible

contracting that can withstand the twists and turns of

a changing LNG marketplace.

LNG IMPORT

LNG EXPORT

Pipe line infrastructure

LNG

Existing

Transmission Pipelines

Existing

Upcoming

GAIL’s Planned Pipeline

RIL’s East West Pipeline

RIL’s Planned Pipeline

City Gas/ CNG

Existing

Planned

LNG Terminal

JAGDISHPUR

PHOOLPUR

BHATINDA

BAREILLY

DISPUR

DELHI

AGARTALA

BARODA

LUCKNOW

PATNA

AHMEDABAD

RAJKOT

KOTA

MATHANIA

GWALIOR

UJJAIN

AGRA

KOLKATA

GAYA

BOKARO

VARANASIJHANSI

DAHEJ I & II

10 mmtpa*

HAZIRA

3.6 mmtpa

COIMBTORE

MANGLORE

MUMBAIBHUBANESHWAR

KRISHNAPATNAM

NELLORE

CHENNAI

TUTICORIN

TIRUCHCHIRAPALLI

HASANBANGLORE

KOLHAPUR

SOLAPURKAKINADA

VIJAYAWADA

DAMRA

DABHOL

5 mmtpa

KANJIKKOD

AURAIYA

GOA

CUTTACK

VIJAYPUR

KANPUR

NANGAL

GURGAUN

PUNE

BHARUCH

SURAT

HYDERABAD

RAJAMUNDRY

BHOPAL

KOCHI

2.5 mmtpa

ENNORE

2.5 mmtpa

BARMER

MANGALORE

5 mmtpa

INTEGRATED GRID TO LINK ANY SOURCE TO ANY MARKET

Existing – to start

Construction

MUNDRA

5 mmtpa

Existing P/L Capacity - 142 MMSCMD

Capacity after new P/Ls - 390 MMSMCD

Technical

Permitting and regulatory approval

Environmental

Local Sentiment

Social

Economic

Strategic

Viability and sustainability

The challenges of operation:

Scheduling

Multiple shippers

Single shipper terminals require careful scheduling as well

Fitting deliveries into slotted time

Weather, tide, supplier delays Managing storage space and its limitations

The unexpected

Terminals often challenged to achieve 100% utilization