Professional Documents
Culture Documents
Table of Contents
1. Introduction
2. Reliance Industries Limited Profile
3. RIL's Gas Business Plan
3.1. Source of Gas
3.2. Transmission Pipeline
3.3. City gas Distribution
3.4. City Gas Demand
3.5. City gas Distribution infrastructure requirements
3.6. Project Schedule
3.7. Investment Proposed
3.8. Gas prices
3.9. Human Resources
3.10. Value Added Offerings
4. Conclusion
Annexures
'
Introduction
1.1
Natural gas is emerging as preferred fuel of 21 st Century due to its inherent economic
value. It can be used as fuel and feedstock. It is clean and environment friendly and is
comparatively cheaper and less volatile than its alternate liquid fuel
1.2
In developed economies like US and Canada, more than 75% of gas is used for domestic
and industrial sector
1.3
1.4
With the passing of the Petroleum and Natural gas Regulatory Board Bill 2006 through
Parliament, legislative stability and impetus has been provided for the investment of fund
in the development and growth of the gas industry especially infrastructure in the country
1.5
Reliance has world's largest gas find reported in 2002 in KG-D6 block of the coast of
Andhra Pradesh and is laying country's largest capacity pipeline to transmit this gas from
East to West of the country
1.6
While some large industrial and core sector customers receive natural gas directly from
high capacity interstate and intrastate pipelines, for supplying gas to other end-users,
distribution network is to be provided. Local Distribution Company (LDC) provides
distribution network for the delivery of natural gas to consumers within a specific
geographic area.
1.7
RIL is keen on participating in this local gas distribution venture to enable proper
utilization of clean and green fuel and is willing to undertake the entire range of activities
along the Gas Supply Chain.
1.8
Besides supplying gas through local gas distribution network to domestic, commercial,
industrial and automotive sector with measures to achieve high-energy efficiency,
Reliance has already initiated in-house projects that can provide value added services like
setting up distributed power generation units and its distribution to meet localized needs,
use emerging technologies like CHP, VAC & Fuel Cells to increase the efficiency of use
of gas and provide relief to farmers by promoting vapor absorption based cold storages
2.1
2.2
Though Reliance is the youngest player in the Petroleum Industry in the country, it has
already achieved excellence in the sector by positioning itself
2.2.1
2.2.2
2.2.3
2.2.4
2.2.5
Holding largest acreage under NELP for exploration and production of oil/gas in
the country after ONGC
2.2.6
2.2.7
2.2.8
2.2.9
2.2.10
2.2.11
2.2.12
2.2.13
23
Reliance Corporate Philosophy is to develop world-class/competitive projects with Stateof-Art Technology and highest standards for HSE to straddle entire value chain.
Source of Gas:
3.1.1
State of Andhra Pradesh is awarded under the New Exploration Licensing Policy
("NELP") for exploration, development and for production of oil/gas. Reliance
also has marketing / transportation rights for the oil/gas produced from these
blocks.
3.1.2
Reliance made the world's largest reported gas discovery in year 2002, in its
deep-water block in KG Basin popularly known as KG/ D6.
3.1.3
Reliance has already submitted the Development Plan with an initial potential of
@ 40 MMSCMD of gas from Dhirubhai 1, Dhirubhai 2 and Dhirubhai 3 having
upside potential of upto 80 MMSCMD. The government has since approved the
development plan. This is the largest potential from any single block.
3.1.4
The production is scheduled to commence from mid 2008. Our continued efforts
in exploration make us feel very confident of discovering more reserves in the
future.
3.1.5
Apart from gas sources mentioned above, Reliance has substantial gas finds at
NEC-25 of the coast of Orissa
3.1.6
Reliance also has CBM blocks at Sohagpur in Madhya Pradesh and Barmer in
Rajasthan which are highly prospective blocks
3.2
Transmission Pipeline:
3.2.1
3.2.2
The East-West pipeline creates the corridor of energy along its route and many
cities along the pipeline can be taken for natural gas distribution in these cities to
domestic, commercial, industrial and transport sector
3.2.3
To ensure reliability and security of gas supply and to enhance market reach of
nation's resource, Reliance plans to lay cross-country pipelines as per
requirement connecting its various gas fields
3.2.4
3.3.1
Supply of gas in India is primarily to core sectors like Fertilizer and Power. This
pattern of consumption has primarily developed as the availability of natural gas
from domestic sources is limited and has been allocated to core sectors. Lack of
infrastructure and legislative support to develop infrastructure has also restricted
natural gas usage for City Gas Distribution in India.
3.3.2
However, it has been recognized that City Gas projects have play a significant
role in developing the socio-economic life of the citizens and the viability of City
Distribution projects largely depends upon share of consumption by industrial
and transport consumers
3.3.3
3.3.4
Typically, City Gas Distribution of Natural Gas would cover supply of gas to
following category of consumers
3.3.4.1
3.3.4.2
3.3.4.3
3.3.4.3.1
3.3.4.3.2
The Medium & Small industrial units demand would be met from
distribution network which would a mix of Steel & Poly-Ethylene
pipes depending on the need of the consumer in terms of pressure as
well as volume of Gas required.
3.3.4.4
The Transport Sector - We expect to meet the demand for natural gas for
both the Private & Public transport operating within the targeted cluster
towns by setting up a network of Compressed Natural Gas (CNG
Stations).
3.3.4.4.1
3.3.4.4.2
1000
Jan-02
Feb-02
Mar-02
Apr-02
May-02
Jun-02
Jul-02
Aug-02
Sep-02
3.3.5
However, RIL has plans to offer value added services to the consumers by
offering them bundled energy solutions that will include emerging technologies
such as Gas Engines, Vapor Absorption Chillers, Waste Heat Recovery Systems
as also introducing Fuel Cells, Micro-Turbines etc.
3.3.6
To demonstrate our commitment to such an effort, RIL, even before its own Gas
has hit the shore has successfully demonstrated its forward bath by introducing a
CCHP solution at a Petrol Pump at Hazira, Surat, where the current incumbent
M/s Gujarat Gas Company has been operating for the last 16 years and have not
had such an approach till date. A detailed write-up of such an effort is enclosed in
Annexure - 2
3.3.7
34
3.4.1
3.4.2
Andhra Pradesh
3.4.2.1.1
Vishakhapatnam
3.4.2.1.2
Kakinada
'""
'
3.4.2.1.3
Vijaiwada
3.4.2.1.4
Nalgonda
3.4.2.1.5
Hyderabad
3.4.2.2
3.4.3
Maharashtra
3.4.2.2.1
Sholapur
3.4.2.2.2
Pune
3.4.2.2.3
Thane
'
Allocation of gas would be as per the demand estimate based on our preliminary
studies which is pegged at 8 MMSCMD.
State
Cities
Vishakhapatnam
1.0
Kakinada
0.4
Vijaiwada
0.8
Nalgonda
0.3
Hyderabad
1-2
Sholapur
0.4
Pune
1.0
Thane
3.0
Andhra
Pradesh
Maharashtra
Total
3.4.4
8.0
However, please note that this demand does not include demand from core
sector. As explained above the demand of this sector will be catered to by way of
a basic network outside the scope of the City Gas Distribution network. This will
ensure that the City Gas Network is independent and is not subjected to the
"'''
3.4.5
It also excludes the demand potential that will accrue out of fresh investments
that will be made in the State by way of various Industries putting up new units
on account of un-hindered availability of Gas.
3.4.6
It also excludes the demand for natural gas that will accrue when applications
involving the Emerging Technologies mentioned above are developed to target
more and more segments that are currently covered.
3.4.7
Map showing spur lines connecting Trunk Pipeline to eight identified cities
Vishakhapatnam(145 km), Kakinada(40 km), Vijaiwada(39 km), Nalgonda(26
km), Hyderabad(15 km), Sholapur(60 km), Pune(20 km) and Thane(32 km) is
attached as Annexure-4
3.4.8
3.4.9
As is clear from the above graph, typically, the industrial volume serves as the
anchor customer to make a successful city gas distribution project. The Domestic
Volumes being marginal, and the growth rate being rather very small, the
profitability project will be highly dependent on the rate of sale of gas for
industrial volumes.
3.4.10
3.4.10.1
utilize the waste heat for space heating during the winter months and for
space cooling during the summer months.
3.4.10.2
3.4.10.3
3.5
3.5.1
3.5.1.2
This will provide employment opportunities for semi-skilled and unskilled local workforce for the period of the project.
3.5.1.3
3.5.1.4
3.5.1.5
Project Schedule
3.6.1
3.6.2
Once City Gas Distribution projects mentioned above are allocated to Reliance,
Spur lines would be laid by 2008-09
3.6.3
3.6.4
3.6.5
RIL &/or the JV would facilitate to commission such identified Project by 200809, so that these projects are synchronized with upstream and transmission
system.
3.6.6
The City Gas projects have longer gestation period. However, supply of gas
could be introduced in the city by 2008-09 from Basic grid to industrial
consumers and Mother CNG stations. Distribution network may take 3-5 years to
cover the area including domestic/commercial consumers.
3.6.7
3.6.8
Investment Proposed:
3.7.1
RIL envisages following primary investments in the setting of the proposed City
Gas Distribution project.
3.7.1.1
3.7.1.2
While each City Gate Station may cost around Rs 100 crores, the project
cost for each of the city is to be determined through feasibility studies.
However, total cost for these 8 cities likely to be in the range of Rs 5000
crores
38
Gas Price
3.8.1
3.8.2
However, City Gas Distribution projects are price sensitive and therefore supply
cost will be minimized through financial and technical efficiency so as to
compete with subsidized alternative like LPG.
Price of gas would however be competitive to re-gasified LNG or alternate
source of gas supply and shall also be competitive to fuel which it would replace
39
Human Resources:
3.9.1
A key part of any successful strategy starts with using highly qualified and
dedicated team of personnel.
3.9.2
3.9.3
3.9.3.2
Technical Expertise
3.9.3.3
- 3.9.3.4
3.9.3.5
3.9.4
The team will contribute to the unique program design, management and
technical experiences to the transition project team, resulting in a unique blend of
strategies and techniques that can meet and exceed the goal
j io
3.10.1
Reliance has on its anvil, a number of projects that is aimed at offering the
customer friendly energy solutions.
3.10.2
Given its vast product profile and competencies that it can leverage on, Reliance
will offer the consumers bundled solutions that will include Combined Cooling,
Heating & Power solutions, Distributed Energy through Gas Gensets/ Fuels
Cells, Integrated Energy Solutions including Solar & Gas.
3.10.3
Various product offerings have already been enumerated in the above paragraphs
especially with references made in paragraphs 2.4.5, 2.4.6 & 2.5.12 and its
subsets.
3.10.4
Reliance believes that there are immense opportunities use these technologies
foster effective utilization while focusing on Energy Usage Optimization &
Conservation
3.10.5
3.10.5.1
Indirect heating of liquids & gases in which the sensible heat of exhaust
gases is transferred to the liquid or gas being heated
3.10.5.2
3.10.6
3.10.7
RIL believes that reduced fuel expenditures - the direct beneficiary of efficient
use of Gas- can be thought of as a new source of capital. The investment that
makes the efficiency possible will yield annual savings each year over the
economic life of the improved system
3.10.8
Process heating efficiency can be an effective way to capture new value, as also
leads to better monitoring & control of fuel use, resulting in decreased fuel
expenditure and reduced cost of environmental compliance as well as more
productive use of assets.
3.10.9
3.10.10
It is also in the process of developing a program for the employees and in the
long run the consumers (in relevant industry) to be exposed to various forms
education/ training etc as follows:
3.10.10.1
3.10.10.2
3.10.10.3
4 Conclusion
4.1
Reliance Industries Limited is the sole operator who is able to commit resources along
the entire gas supply chain including:
4.1.1
4.1.2
4.1.3
4.1.4
Its keenness to invest in setting up a world class City Gas Distribution network in
8 (Eight) major cluster hubs which will in due course cover most towns/ cities in
the State.
4.1.5
Deploying its key manpower to ensure that the project(s) are developed to be in
synchronization with the development of the other related projects which
constitute the Gas Supply Chain i.e from Source to Consumer.
4.1.6
4.2
Given its vast product profile and competencies that it can leverage on, Reliance will
offer the consumers bundled solutions that will include Combined Cooling, Heating &
Power solutions, Distributed Energy through Gas Gensets/ Fuels Cells, Integrated Energy
Solutions including Solar & Gas
4.3
While RIL has in house technical, financial and managerial capabilities to undertake
world class Gas Distribution system and City Gas Distribution projects, it is also keen to
partner with respective State Government in providing world class Gas Distribution
networks by forming a JV with the State nominates Nodal agency for developing City
Gas Distribution projects in Vishakhapatnam, Kakinada, Vijaiwada, Nalgonda,
Hyderabad, Sholapur, Pune and Thane.
4.4
RIL is keen to work in close coordination with the Government of India and respective
State Government in creating gas revolution in the country.
4.5
RIL strengths would complement the Government's efforts to develop City Gas by 200809 as Reliance has the source of gas and transmission system to supply gas.
4.6
4.7
RIL would also be keen to supply gas to bulk consumers in core sectors like power and
fertilizer by laying dedicated spur lines to these plants
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Annexure - 3
Typical City Gas Distribution Project
CGD project will primarily consists of
City Gate Station (to receive from transmission system and odorize it with
Mercaptan). Mother CNG Station would also be stalled at City Gate Station to boost
supply to Daughter Stations
Basic grid from City Gate Station in the city and which normally operates at 19 bars.
(Steel pipes)
City would be divided into various wards having potential demand of around 5000
SCMD and District Governors would be provided on the Basic Grid to supply gas at
regulated pressure from Basic Grid to distribution network within the ward [19 bars
to 4 bars].
Service lines from distribution network to meet the requirement of the individual
consumer(s) - 4 bars (PE). Service lines will be 1 54" for commercial supply and 1"
for residential supply
Internal fittings/metering.
The supply of gas to larger industrial consumers is made from Basic Grid, whereas smaller
industrial consumers are supplied gas from Distribution network (PE).
: * ?
Annexure - 2