The Position of Natural Gas in Energy

Demand Growth and its Supply

Security

A. Amitava Sengupta
B. Director (Fin & Comm.)
C. Petronet LNG Ltd.

New Delhi
January 19, 2010
 OVERVIEW
 India Energy Scenario
 Demand Supply of Natural Gas
 Sectoral Analysis
 India’s Energy Security

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 Indian Energy Demand Scenario
Gas
Total Energy
Hydro Nuclear Coal
Year Oil (MTOE) Consumption in
(MTOE) (MTOE) (MTOE) (MTOE) BCM
MTOE
2007-08 11 4.4 216 140 40 33 410
2011-12 12 17 257 166 44 49 496
2016-17 18 31 338 214 64 71 665
2021-22 23 45 464 278 97 108 907 
2026-27 29 71 622 365 135 150 1222
2031-32 35 98 835 486 197 219 1651
% Growth
Source: Integrated 6%
Energy Policy, 11% 6%2006
of the Gov., August 5% 7%   7.2
Assumptions: (1) GDP growth assumed to be 9% (2) Population growth assumed to be 1.1% (3) Includes only commercial energy requirements

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Indian Energy Supply Scenario
India Primary Energy Projected Supply (indigenous) by fuel
(Mtoe)
 Year 2010 2015 2020 2025 2030 CAGR
Oil 45 45 55 55 50 0.53
Natural Gas 39 49 56 58 58 2.00
Coal 218 220 230 235 250 0.70
Nuclear Energy
8 14 22 29 32 7.18
Hydro electric
23 29 36 41 44 3.22
Total 333 357 399 417 434 1.34

Source: EIA statistics

Energy Deficit in India (Mtoe)

Year 2011-12 2016-17 2021-22 2026-27 2031-32 CAGR
Demand 496 665 907 1222 1651 6
Supply 333 357 399 417 434 1
Gap 163 308 508 805 1217 11

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 INDIA’S GAS DEMAND SUPPLY
(PETRONET ESTIMATE)
244.29 217.55
206.97
222.67
179.42

181.08

MMSCMD 2009 2011 2012 2025

(At Kearney
study)
Demand 181 223 244 349
Supply 179 207 218 286
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Gap 2 16 27 63
 Natural Gas Vs Other fuels

  LNG Fuel Oil Imported

Coal
Carbon Emission 110,000 164,000 208,000
(pounds per billion btu)

Calorific Value(Kcal/Btu) 12,650 10,400 6,400

Heat Rate for power 1,750 1,950 2,350

(Kcal/Kwh)

Natural Gas cleanest and most efficient fossil fuel

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 Natural Gas in Power Sector
MW  Installed at end of 10th Plan Target (11thPlan) Actual Nov. 2009 Capacity Added
Hydro 34654 15627 36885 2232
Coal 71091 52850 81606 10515
Gas 13722 6843 16823 3101
Diesel 1202 0 1200 NA
Sub-Total 86015 59693 99628 13614
Nuclear 3900 3380 4120 220
Renewable 7761 0 15225 7465
Total 132329 78700 155859 23530

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 Natural Gas in Power Sector cont…
 As per CEA estimates, the base power demand in India is
expected to rise from 775 billion units currently to 1400
billion units i.e. CAGR of 7.5% with a potential latent
demand of 1300 billion units to match per capita energy
consumption of China or Brazil.

 50% of this incremental base demand on natural gas would

mean requirement of additional 125 MMSCMD.

 Captive Power generation a major segment for gas usage

 Carbon tax, if implemented, will provide incentive for gas

consumption in favor of coal

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 Natural Gas vs Coal based Power
Relative cost of electricity w/o and with CO2 Capture
Studies MIT GTC AEP GE
PC No-capture,
1 1 1 1
Ref. Case
PC Capture 1.6 1.69 1.84 1.58
IGCC no-capture 1.05 1.11 1.08 1.06
IGCC Coal
•PC: Pulverized capture
(Super Critical) IGCC:1.35 1.39
Integrated Gasification 1.52
Combined Cycle 1.33
• From MIT Coal Study (2007) Gasification Technology Council (GTC), General Electric (GE) & American Electric Power (AEP)

 Gas/LNG based Power Plant have unique advantage of being

used for Peaking stations

 Depending on tightness of emission norms and Carbon Tax and

Capture technology cost effectiveness of coal vs gas reduces

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 Natural Gas in Fertilizer Sector
Feedstock-wise production capacity Demand
Period
No. of Production (MMSCMD)
Feedstock %Share
Units Capacity mtpa
2009-10 58
Gas 19 15 72
Naphtha 7 4 17 2010-11 64
FO/LSHS 4 2 10
2011-12 76
Total 30 21 100

 New Pricing Policy all existing, expansion and new plants

have to be gas based (deadline March 2010 – likely to be
missed)

 Fertilizer capacity expansion of 35% expected over the

next 3 years

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Natural Gas in Industry (incl. Petrochem & Sponge Iron)
Sector
2009-10 2010-11 2011-12
(MMSCMD)
Industrial 17.17 18.38 19.66
PetroChem/
37.15 39.15 39.15
Refineries
Sponge Iron 6.87 7.35 7.86
Total 53.09 56.81 60.77
 Industrial sector consumers are ceramic, glass and other
manufacturers

 Willingness to pay more for gas as compared to other sectors as liquid

fuel is costlier

 Total 8 petrochemical with 2.55 mtpa capacity and 40% gas based

 Additional capacity expansion in pipeline

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 Natural Gas in CGD
Sector (MMSCMD) 2009-10 2010-11 2011-12
City Gas 6 9 12

 Includes transportation as major source of demand

 India ranked 5th in World wide CNG production

 375 CNG outlets 1% of 35,000 petroleum outlets

 2007-08 only 75% of total demand was met

 25 cities have CGD and rising

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 India’s Energy Security
 India’s energy security aims at:

 ensuring the continuous availability of commercial energy

 at globally competitive prices to support economic growth
 meet our energy needs with safe, clean and convenient forms of energy.

Given India’s growing energy requirements and unlikelihood of matching

increase in the domestic supplies, despite some significant oil and gas
finds recently, the import dependence is only going to accentuate
sharply in the coming years.

Acquisition of energy assets and supplies from overseas and efforts to

promote infusion of new emerging technologies in the energy sector in
both conventional and non-conventional areas, therefore, assume
utmost urgency. 13
 Global LNG Scenario
Liquefaction Capacity                
Region 2,010.0 2,011.0 2,012.0 2,013.0 2,014.0 2,015.0 2,020.0 2,025.0

Asia Pacific 84.2 90.4 90.2 88.7 90.7 104.6 115.3 92.1
Europe 4.1 4.1 4.1 4.1 4.1 4.1 4.1 4.1
Middle East 76.9 94.5 98.1 98.1 98.1 98.3 98.3 98.3
North Africa 31.3 31.3 31.9 35.0 36.4 41.4 42.8 42.8
North America 0.8 0.2 - - - - - -
South America 16.2 18.7 19.4 19.4 19.4 19.4 16.2 9.4
West Africa 21.7 23.8 25.0 27.9 30.1 30.3 29.7 24.6
Total: 235.2 263.0 268.6 273.2 278.7 298.1 306.3 271.2
LNG Demand                
Region 2,010.0 2,011.0 2,012.0 2,013.0 2,014.0 2,015.0 2,020.0 2,025.0

Asia Pacific 122.1 132.2 141.9 145.9 156.3 168.1 186.6 227.5
Europe 60.4 69.4 71.2 72.2 75.3 81.1 148.1 169.0
North America 34.6 44.8 43.6 39.3 26.9 26.0 20.7 17.3
South & East Africa - - - 0.3 0.3 0.3 0.4 0.4
South America 3.2 4.0 4.2 4.2 4.3 4.4 5.5 5.9
Total: 220.2 250.4 260.9 261.8 263.2 279.9 361.3 420.2
                 
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Surplus/Deficit 15.0 12.6 7.7 11.4 15.5 18.2 (55.0) (149.0)
Source: Wood Mackenzie
 Step Forward

 National Pipeline Highway

 This initiative of Government if implemented will go
long way in creation of Gas infrastructure, creation
of new markets and bringing an Industrial
revolution

 Uniform Pricing of Gas

 This initiative will act as booster for new plants, use
of cleaner fossil fuel (natural gas) and provide level
playing field & promote competition amongst
Industries

 Need for immediate action by way of acquisition of Gas

assets abroad and ensuring supplies on long term basis
to Indian market 15
THANKS

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