Petro India Conference

2016
Organized by

Oil Price Volatility and its

impact on LNG projects &
pipelines in India
Dr BS NEGI

Coverage

Reasons for Oil Price Volatility

Global Context
Indian context
Impact on LNG Projects
Impact on Pipeline Infrastructure

Oil Price volatility- possible causes

Global Recession and Asian Recovery

Middle East Economy Oil/Gas based
US/Canadian Shale Gas revolution ??
Russian Gas supply to Europe- A Geo Political
threat
Australia- high production cost
Iran Effect- lifting of sanctions
Chinese Economic slow down
Oil producing countries perspective- Saudi
Arabia, Bahrain, Kuwait, Nigeria, Mozambique ,
Iraq etc
Supply Demand Syndrome

Oil Price volatility- possible causes

Shale Gas effect

CBM effect- Queens Land Curtis LNG plant
Environmental consideration-Renewables
effect
Regional market diminishing effect
Other effects
Panama Canal widening- shipping cost reduction
LNG national players going global

LNG Liquefaction capacity built up

Emergence of new LNG suppliers
Emergence of new LNG buyers

Global Context

The fall in the price of oil is not translating into an

stimulus for the economy unlike in the past
Production rigs deployment reduced by 60% but
fracking of wells increased.
China's CNOOC is one of world's largest oil and
gas companies has taken bold steps to face the
crisis
Oil price fall more curse than blessing (for consumers and
companies)
Output reduces and profit evaporates
Employees layoffs
Sharp curtailment of CAPEX
Financial stress
Market deflation
Benefits not passed to the end user in totality

Indian context

Import burdon on Government reduces

Tough call for deep water E&P
Efficiency improvement in operation
D-1, D-3 fall in production
Equipment and services become cheap- gas production
cost comes down from $10-11 to $5-6/mmbtu
US LNG may be costlier than alternative
Reduction in investment in E&P
Increase consumption of gas in power sector- gas
pooling
Cheap spot cargo than the long term LNG
LNG terminal on merchant/tolling basis- Asian LNG
demand falling (15% increase in 2010 to (-)5% in 2015)
Emergence of gas trading hub ??
Impact on LNG and Pipeline Infrastructure

LNG Infrastructure Growth dynamics

Gas
Demand
ROCE
Policy
Regime

LNG by
Tankers

Gas Supply
Domestic

LNG
(India)

Pipeline
Connectivi
ty

LNG
Sourcing

Regulatory
Regime

Inland
Navigation

LNG new applications

(direct to engine, bunker
fu)el, Loco fuel )

LNG Terminals Status

SN

LNG
Terminal

Owne
r

Capaci By
ty
2025

Remarks

Dahej

PLL

10

15-20

Commissioned in 2004,
Owners
GAIL,BPCL,IOCL,ONGC, ,

Hazira

Hazira
LNG

Commissioned in 2005,
Promoters Shell(74%), TOTAL
(26%)

Dabhol

RGPPL

Promoters : GAIL,NTPC, Maha

Genco and Lenders

Kochi

PLL

2.5

Commissioned 2012,
Promoters
GAIL,BPCL,IOCL,ONGC

Mundra

GSPC
+
Adani

Commissioning by 2017,
( IOC,ONGC , Indian Gas
Solution, Bal)

Jafrabad
(Pipavav)

Swan
5
Energy

FSRU, Planning Stage, ONGC,

IOC,BPCL may book capacity

Jaigarh

H8
Energy

EPC lined up, connectivity to

P/L permitted , Storage

LNG Terminals Status..

S
N

LNG
Terminal

Owner

Capaci Expansi
ty
on

Remarks

Ennore

IOCL +
TIDCO

Advance stage,
Contracts lined up

Dhamra

Adani

By 2018-19, GAIL &

IOC as off-takers, FSRU

10 Mangalore

ONGC
+PBCL +
Mitsui

2.5

Planning stage, MOU

signed

11 Haldia

H Energy
East coast

2.5

Offshore p/l 115Km to

Contai landfall point

12 Gopalpur

GAIL

Planning Stage, PLL

also interested

13 Okha

ILFS/SP

2.5

FSRU, Planning Stage

14 Okhamadh GVK Power 2.5

i
Infrastruct
ure

Planning Stage

LNG Terminals Status..

S
N

LNG
Terminal

Owner

Capaci By
ty
2025

Remarks

16 Kakinada

GAIL+APG
DC+ GdF+
Shell

Planning stage, MOU

signed, APGDC(50%),
GdF(26%), Shell(24%)

17 Nanalyaja
(Gujarat)

ILFS

18 Paradip

GAIL, IOCL, 5
HPCL

19 Krishnapatt
am

FSRU

2.5

2.5

20 Vizak

FSRU

GAIL,+ APIDCL

21 Jamnagar/
Kakinada

RIL + BP

Planning stage

22 Gujarat
Coast

HPCL+
2.5
Shapoorji
Palanji (SP)

FSRU Planned

70.575.5

35.5 Greenfield+10
cap add

Total

100.5

Planning stage,
Planning stage, FSRU
Planned
LNG Bharat

Gas Pipeline
Infrastructure

Pipeline Infrastructure Growth dynamics

Gas
Demand
ROCE
Policy
Regime

Infrastructure
Adequacy

Pipelin
es

LNG Imports

Gas Supply
Domestic

Market
Maturity

Regulatory
Regime

Pipelines Authorized Before PNGRB

Establishment
S.No.

Pipeline(GAIL)

Length(Km) Capacity
(mmscmd)

Dadri-Bawana-Nangal

646

31

Chainsa-Jhajhar-Hissar

350

35

Jagdishpur-Haldia

2000

32

Dabhol-Bangalore

1400

16

Kochi-kanjirikkod-Bangalore

1100

16

Total

5496

130

S.No.

Pipeline (RGTIL)

Length
(Km)

Capacity
(mmscmd
)

Kakinada- Basudebpur

1100

25

Kakinada-Chennai

425

Chennai-Bangalore

600

Chennai-Tuticorin

670

Total

2820

46

Pipelines after establishing PNGRB

S.N
o.

Pipeline

Length(Km
)

Capacity
(mmscm
d)

Mallyavaram Bhilvara Vijaypur

(GSPC Gas Net)

1584

30

Mehsana Bathinda (GSPC Gas Net) 1670

30

Bathinda- Srinagar (GSPC Gas Net)

740

15

Surat- Paradip (GAIL)

1724

30

Ennore-Krisnapatam-Nellore
(KROS)

260

Kakinada-Srikakulam (APGDCL)

300

10

Chennai-Bangalore

600

Chennai-Tuticorin

670

Total

7448

133

Pipelines EOI received in PNGRB

S.No. Pipeline

Length(Km
)

Capacity
(mmscm
d)

Durgapur- Kolkata

160

Vijaywada- Nellore (APGDCL)

325

10

Paradip- West Bengal

(Dattapalia) HEnergy

850

10

Jaigarh- Mangalore via Panji,

Karwar, Udupi

635

10

Langtala (Jaisalmer)Mehsana(Gujarat)- (Focus

Energy)

510

10

Total

2480

44

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