“Vision 2030” Natural Gas Infrastructure in India Report ...

1 vision 2030 . Natural Gas Infrastructure in India Report by Industry Group For Petroleum & Natural Gas Regulatory Board 1 Contents Acknowledgements .. 5 Objective of the study and sub group participants .. 6 7 1 Executive Summary .. 8 2 Natural Gas Demand/ Supply Dynamics .. 13 Present Demand Scenario .. 13 Demand Projections .. 15 Approach & 17 Power Sector Demand .. 18 Fertilizer Sector Demand .. 23 CGD Sector Demand .. 25 Other Consumer Sectors' Demand .. 27 Consolidated demand .. 28 Regional distribution of demand .. 30 Present Supply Scenario .. 33 Supply Projections .. 33 Approach & 34 Domestic 35 Imports of LNG .. 36 Gas Imports through Cross Border Pipelines .. 38 Non Conventional Sources .. 38 Consolidated supply projections .. 40 Demand Supply Balance .. 42 3 Natural Gas Infrastructure .. 44 Present state of Infrastructure .

2 44 Infrastructure Projection Approach & Methodology .. 46 Pipeline Infrastructure Development Plans .. 47 Scope for further development .. 52 4 Gas Sector Current status .. 55 Present State in India .. 55 2 International Examples .. 57 USA .. 57 UK .. 59 Market evolution models .. 60 Focus areas for India .. 61 Policy Issues .. 62 Regulatory Issues .. 67 Indicative Action Plan .. 72 FIGURES. Figure 1 Demand Projection Methodology .. 17 Figure 2 Region wise gas based power generation capacity (%) .. 19 Figure 3 Gas demand for power sector from 2012-13 to 2029-30 .. 22 Figure 4 Gas demand from fertilizer sector: 2012-13 to 2029-30 .. 24 Figure 5 Gas demand from CGD sector: 2012-13 to 2029-30 .. 26 Figure 6 Gas demand from other consuming sectors: 2012-13 to 2029-30 .. 27 Figure 7 Consolidated demand growth trajectory .. 29 Figure 8 Consolidated Demand - Break up in 2012-13 and 2016-17.

3 29 Figure 9 Consolidated Demand - Break up in 2021-22 and 2029-30 .. 30 Figure 10 Regional markets in India .. 30 Figure 11 Regional contributions to demand .. 32 Figure 12 Regional demand growth profiles .. 32 Figure 13 Gas supply projection methodology .. 34 Figure 14 Natural Gas Supply Growth Profile .. 41 Figure 16 Existing gas transmission network in India .. 46 Figure 17: Gas Infrastructure projection methodology .. 47 Figure 18 Gas transmission network in India at the end of 12th five year plan .. 50 Figure 19: Gas transmission network in India at the end of 13th five year plan .. 51 Figure 20: Infrastructure addition linked to ICF's NGG proposal and CBM Blocks .. 52 Figure 21: Natural gas chain ( India ) .. 56 Figure 22 Natural Gas Pipeline Network, 2009 .. 57 Figure 23 National Transmission System (UK) .. 59 Figure 24 Major structural and market elements for an enabling environment.

4 61 Figure 25 Action plan for development .. 73 TABLES. Table 1 Primary energy mix for India .. 13 Table 2 Sector wise Natural gas consumption in India (January 2013) .. 14 Table 3 Regional gas markets in India .. 15 3 Table 4 Demand drivers for various end user segments .. 16 Table 5 SUMMARY OF INSTALLED CAPACITY AS ON .. 18 Table 6 Gas Demand for Power Projects by End of 12th Plan (2016-17) .. 21 Table 7 Power Sector Gas Demand - 12th and 13th five year plan .. 22 Table 8 Power Sector Gas Demand - 2023 to 2030 .. 22 Table 9 Fertilizer Sector Gas Demand - 12th and 13th five year plan .. 24 Table 10 Fertilizer Sector Gas Demand - 2023 to 2030 .. 24 Table 11 Total Realistic Demand - 12th and 13th five year plan .. 28 Table 12 Total Realistic Demand - 2023 to 2030 .. 28 Table 13 Regional Markets Constituent States .. 31 Table 14 Regional Demand Distribution.

5 31 Table 15 Natural gas availability by source in India .. 33 Table 16 Domestic Supply Projections (MMSCMD) .. 35 Table 17 Domestic gas availability - 12th and 13th five year plan .. 35 Table 18 Domestic gas availability - 2023 to 2030 .. 36 Table 19 Imported LNG - 12th and 13th five year plans .. 37 Table 20 Imported LNG - 2023 to 2030 .. 37 Table 21 Gas availability (cross border pipelines) - 12th and 13th five year plans .. 38 Table 22 Gas availability (cross border pipelines) - 2023 to 2030 .. 38 Table 23 Total gas availability - 12th and 13th five year plan .. 41 Table 24 Total gas availability - 2023 to 2030 .. 41 Table 25 Natural gas transmission Infrastructure in India .. 44 Table 26 Natural gas transmission Infrastructure in India Regional Distribution .. 45 Table 27 Pipeline authorizations by MoPNG in 2007 .. 48 Table 28 Pipeline Authorizations through EOI Route / Pending EOI's.

6 48 Table 29 Gas pipelines expected to be commissioned in the 12th five year plan .. 49 Table 30 Summary Pipeline Infrastructure in 2030 .. 51 Table 31 Demand-Supply-Capacity from 2022-23 to 2029-30 .. 53 Table 32 Regional Infrastructure in 2030 .. 54 Table 33 Focus Areas .. 62 ANNEXURES. ANNEXURE I List of Thermal ( Gas Based ) Power Station as on ANNEXURE II Gas demand for Future power plants ANNEXURE III Plant wise gas requirement of UREA plants in 2010 11 ANNEXURE IV Demand Projections for UREA plants/ projects from 2012 2030 ANNEXURE V Gas consumption by CGD entitis for the year 2010 11 ANNEXURE VI Assumed GA's for new CGD networks for the period 2016 17 to 2021 22 ANNEXURE VII Pipeline Development Schedulefor pipelines expanding beyond 13th plan ANNEXURE VIII Pipeline capacity at source existing and additional 4 Acknowledgements The Report on vision 2030 Natural Gas Infrastructure in India was commissioned by the Petroleum and Natural Gas Regulatory Board ( PNGRB ).

7 The Report has benefited tremendously from the experience of a team of gas sector experts (nominated by entities on request from PNGRB) who invested their valuable time and also received support from their respective organizations. The Report has relied extensively on secondary sources of data for projecting supply, demand and pipeline Infrastructure which the team would like to acknowledge, without which the basic structure of this Report would not have been possible. The team also would like to especially acknowledge the team members from CEA, Planning commission, DGH and NFL which provided basic data and support for their respective areas. The team was also guided from time to time by Shri S Krishnan, the Chairperson PNGRB, and all its members and officials on the vision 2030 work including support on data acquisition from various agencies.

8 Acknowledgements are also due to Shri R P Watal, IAS, former Secretary PNGRB and Shri Rajeshwar Rao, OSD, PNGRB for special guidance and critical review of the Report . 5 Objective of the study and sub group participants The PNGRB in its meeting on 22nd November 2011 decided to form a Industry-group for formulating a vision 2030 - Natural Gas Infrastructure in India and nominated the companies listed below on the committee. The key terms for the group included projecting the Infrastructure required for development of gas sector in India , keeping in view the demand and supply of gas, and existing Infrastructure in the country. The terms also included providing suggestions on policy measures to be taken by Government of India / PNGRB to meet the stated objective of development of gas grid in the country. The sub-group, chaired by BG India , finalized its Report in April 2013 and submitted it to PNGRB in May 2013.

9 List of nominated member companies / organizations and their representatives BG India - Akhil Mehrotra (Chairman). BPCL - Shri Vijay Duggal CEA - Shri V K Singh Directorate General of Hydrocarbons - Shri Sudhir Kumar GSPL - Shri Devendra Agarwal GAIL - Shri Ajay Kumar Porwal, Shri Anant Khobragade HPCL Shri Deepak Hota, Shri A V Sarma, IOCL Shri D S Nanaware Kribhco /NFL Shri R K Agarwal , Ms Ritu Goswami ONGC Ms Tinku Nischal Planning Commission Shri Rajnath Ram PLL - Shri Man Mohan Ahuja Reliance Shri Neeraj Pasricha , Shri Manoj Pandey Shell Shri Anindya Chowdhury 6 Disclaimer This Report has been prepared collectively by the committee formed by PNGRB. The contents of the Report do not represent the views, strategy, outlook or circumstances of any of the individual committee member companies or their representatives. No representation or warranty, express or implied, is or will be made in relation to the accuracy or completeness of the information in this Report and no responsibility or liability is or will be accepted by any of the companies listed as committee member or any of their respective subsidiaries, affiliates and associated companies (or by any of their respective officers, employees or agents) in relation to it.

10 7 1 Executive Summary The Indian economy presently is believed to have established itself on a healthy growth path and this would increase going forward the energy consumption in the country. This increase in consumption is expected to be supplemented by an alteration in the primary energy mix of India on account of the substitution of oil by Natural gas. The share of Natural gas in the energy mix of India is expected to increase to 20% in 2025 as compared to 11% in 20101. However, given that all the plans for expansion in Natural gas supply in the country with the help of additional RLNG terminals, nation wide transmission pipeline network and transnational pipelines are expected to materialize by 2025, it is envisaged that the share of Natural gas in the primary energy mix would reach 20% till 2030 if not more. In recent years the demand for Natural gas in India has increased significantly due to its higher availability, development of transmission and distribution Infrastructure , the savings from the usage of Natural gas in place of alternate fuels, the environment friendly characteristics of Natural gas as a fuel and the overall favourable economics of supplying gas at reasonable prices to end consumers.