LNG - GAIL & India
LNG - GAIL & India
LNG - GAIL & India
20.00%
15.00% 23 %
10.
2% 5%
7.5 8.1
10.00% 0%
6. 5
5.00%
0.00%
2000 2005 2010 2015
% Share of Natural Gas, India % Share of Natural Gas, World
From early 2000, Gas share was around 7-8%, which increased during 2010-11 (above 10%),
due to increased KG D6 gas production and dwindled thereon.
Natural gas share of primary energy in India low as compared to rest of the world
Gas Demand Supply Scenario
GAIL internal demand assessment
388
MMSCMD
308 135
128
122
116
246 110
105
100
205 90 95
81 86
77 85 91
167 70 73 80
63 66 70 75
54 57 60 62 66
136 52 58
49 51 55
44 47 40 43 45 48
40 42 29 31 33 35 38 55 57 59
26 27 50 51 53
23 24 44 45 47 48
20 21 33 34 35 35 36 37 38 40 41 42
32 33
30 29 32
72 74 77 79 82 85 88 90
51 59 63 64 65 65 65 65 65 65 65 65 68 70
46 46 47
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040
Primary Energy Demand (Mtoe) 723 823 968 1139 1340 1576
Source: PTTLNG
Gas Supply Trend in India over a period of time - India
162
160 45%
155
144
40%
140
134 131
121 35%
120 118
0 0%
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
4 340 MTPA Global nominal liquefaction capacity. It increased by 36 MTPA from 2015
USA: Sabine Pass Train 1 and 2 (9 MTPA); Australia : Gorgon (10.4 MTPA),
APLNG (9 MTPA) and GLNG Train 2 (3.9 MTPA); Malaysia Bintulu (3.6
MTPA)
Million tonnes
Source ICIS
Changes in International Market : Price
Prices of Spot LNG have reduced by around 60% in major markets of Asia, Europe and Latin America
World LNG Landed Prices Feb 13
Source FERC
LNG Price – Trend w.r.t. Crude & Gas
Changes in International Market
Spot trade % is increasing in the overall LNG trade
Global spot Vs Term LNG Trade Unit MTPA (Left) ; % (Right)
Low prices of spot LNG due to supply overhang has made downstream buyers averse towards entering into
long term contracts
Also large customers (Steel, IPPs, and Refineries) are trying for direct import of LNG
The price of LNG under long term contracts are currently uncompetitive compared to spot LNG thereby
undermining its marketability.
Henry Hub indexed LNG is highly uncompetitive compared to Brent linked LNG: Higher fixed liquefaction
charges along with shipping costs
Re-gas
Infrastructure
NANGAL
BHATINDA
Hisar
DELHI
Jhajjarr
BAREILLY
GURGAUN
AURAIYA LUCKNOW
MATHANIA AGRA DISPUR
MUNDRA JAISALMER
JAGDISHPUR
BARMER
5 mmtpa GWALIOR
KANPUR
PATNA
PHOOLPUR
DABHOL HYDERABAD
KAKINADA
Existing Re-gas capacity 26 MMTPA
1.4 + 3.6 mmtpa 3-5 mmtpa
CHENNAI
New re-gas capacity 30-33 MMTPA
JAIGARH BANGALORE
3-4 ENNORE
5 mmtpa By 2020-21 , Aggregate re-gas
mmtpa
capacity over 55 MMTPA
COIMBATORE
KOCHI
5 mmtpa
GAIL: Diversified Gas Sourcing
Russia-Gazprom
2.5 MMTPA
2018-2038
US-Henry Hub
Cheniere & Dominion : 5.8
MMTPA Turkmenistan (TAPI)
2017/18-2036/37
38 MMSCMD(10.6 MMTPA)
Qatar 2019/20-2048/49
4.8 MMTPA until
2004/16-2028
Gorgon
0.42 of 1.44
MMTPA 2017-2034
b) GAIL sells to the same Entity on FOB basis at Sabine Pass same/diff. quantity during 2018-2019
• P = 115% HH + 3 $/MMBtu + Small Margin
• Quantity = Mutually agreed Quantity
GAIL has sold some Henry Hub volume in international market in Time Swap
Optimization strategies for sale of US volumes
Destination Swap
a) GAIL sells to the Entity on FOB basis at Sabine
• P = 115% HH + 3 $/MMBtu
Contractual issues: Ability to
• Quantity = Mutually agreed Quantity
off-take in FOB leg and
supply in DES leg
b) An Entity sells to GAIL on DES India basis during the same period
• Price DES = GAIL’s Sabine Pass FOB cost price + Constant
• Quantity = Mutually agreed Quantity
Destination Swap of some volume for first few years done, the price of such LNG (when DES)
would reduce to levels closure to the RasGas LT RLNG price, under present market condition.
Shipping arrangements for LNG Sourced from US
• Appointed Shipping Corporation of India (SCI) for charter hire of near term LNG
ships requirements.
• Charter hire exercise for existing LNG ships for (3+1) year term is under
process.
LNG-run trucks represents a Technology is already available Government trying to start LNG
significant improvement over barges on Ganga by 2018-end
diesel fuel with advantage in
terms of cost and emissions Railways have launched their first
CNG train in Jan’2015 Globally, growing number of ship-
owners turning to natural gas due
Building a network of fuelling
to stringent emission rules and
stations to ensure the supply of Options are being explored to use
economic benefits
LNG is major challenge LNG in locomotives
Conclusion
• India is one of the fastest growing economy in the world and
macro-economic drivers indicate significant upside in
consumption of Natural Gas in coming decades.