India's Future lies in LNG - Ascertaining Potential Medium to Long Term Sustainable Demand for LNG in India
Overview of the Report
While the energy requirement of India is on the brink of a stellar growth, there are serious problems with the domestic gas supply scenario and overall sector framework. Under such circumstances, the moment has come for the key stakeholders across the natural gas value chain to reassess the risks & rewards in the Indian Gas Market and align their future strategies accordingly.
The primary objective of this study is to unleash the opportunities in store for RLNG consumption in India, based on an in-depth bottom up exercise of the Indian gas market. The study will provide the most authentic and segment-wise & region-wise RLNG market outlook, based on a regional & consumer segment-wise bottom-up analysis and forecasting. The analysis will also take into account the various regulatory & policy parameters and economic aspects applicable on the various gas consumer segments
Highlights of the Study
While the energy requirement of India is on the brink of a stellar growth, there are serious problems with the domestic gas supply scenario and overall sector framework. Under such circumstances, the moment has come for the key stakeholders across the natural gas value chain to reassess the risks & rewards in the Indian Gas Market and align their future strategies accordingly.
The primary objective of this study is to unleash the opportunities in store for RLNG consumption in India, based on an in-depth bottom up exercise of the Indian gas market. The study will provide the most authentic and segment-wise & region-wise RLNG market outlook, based on a regional & consumer segment-wise bottom-up analysis and forecasting. The analysis will also take into account the various regulatory & policy parameters and economic aspects applicable on the various gas consumer segments
Highlights of the Study
- Bottom-up Natural Gas demand assessment: Region-wise, Consumer Segment-wise and Fuel-wise, based on primary and secondary research.
- Forecasting of Natural Gas Demand, with regional and segmental split, giving: Present Scenario, Foreseeable Future Outlook (Upto 2020) and Non-Foreseeable Future Outlook (From 2020 to 2025).
- Assessment of landed price of Natural Gas at key demand hubs across different regions in the country.
- Region-wise and Consumer segment-wise RLNG demand based on price elasticity (i.e. LNG price appetite).
- Impact on RLNG demand based on different domestic gas availability & domestic/RLNG pricing scenarios.
- Based on above exercise, identification of primary target consumer segments and anchor customers for RLNG penetration, existing and emerging capacity, potential gas requirement and their location.
- Assessment on Gas Pricing that would facilitate penetration of LNG in the Indian natural gas market.
- Pan-India mapping of target LNG consumer segments, say: Power, Fertilizer, Refinery, LPG Fractionators, Industrial hubs, Downstream Natural Gas Distribution centers.
- Pan-India mapping of Existing, Expanding, Greenfield (under-construction), Indicated, Probable and Required Natural Gas Infrastructure: Gas Pipeline and RLNG Terminals, in order to facilitate LNG market penetration.
- Pan-India mapping of Natural Gas supply connectivity of RLNG Projects (as described above) and Demand Centers, with identification of key missing links
1. EXECUTIVE SUMMARY
2. BACKGROUND
a. Historic domestic natural gas production trend
b. Historic natural gas consumption trend
c. Outlining the demand drivers for Natural Gas in India
d. Outlook on domestic natural gas utilization/supply priority, and how it has evolved during highly constrained domestic gas supplies
e. Region-wise domestic & LNG natural gas supply sources
f. Overall natural gas domestic gas supply scenario and demand curve for the next 10-15 years timeframe
g. Region-wise natural gas pipelines: routes, supply source, key consumers, technical configuration
h. Identification of gaps in gas pipeline infrastructure in key potential gas markets
i. Gas pipeline tariffs for the gas pipelines
3. SELECTION OF POTENTIAL NATURAL GAS MARKETS IN INDIA: PRE-QUALIFICATION OF REGIONS AND STATES
a. Segmentation of natural gas markets based on regions by segregating key states, say:
i. Northern Region
ii. Western Region
iii. Central Region
iv. East and North-Eastern Region
v. Southern Region
b. Mapping of connectivity/proximity of the identified regions to the domestic and imported gas supply sources
c. Mapping of natural gas pipeline infrastructure growth & development in the identified regions and possibility of future pipeline expansion and addition based on market information
d. High-level economic growth assessment in the identified regions to take into account future energy requirement based on economic growth
e. Understanding of key natural gas demand drivers in the identified regions, based on historic gas consumption profile and future demand development outlook
f. Selection of promising regions/cluster of states that are likely to contribute significantly in the overall growth in Natural Gas demand in future on the basis of matrix developed on the basis of the above parameters
4. DETAILED AND EXTENSIVE NATURAL GAS DEMAND ASSESSMENT AND DEVELOPMENT OF DEMAND MODEL FOR THE QUALIFIED REGIONS/CLUSTER OF STATES
a. Mapping of Power, Fertilizers, Refinery, LPG extraction, Industrial clusters, SEZ’s, CGD for the qualified regions, state-wise basis: Name of units, current capacity, gas off-take/potential gas demand;
b. Bottom-up assessment of Natural Gas demand universe, Region-wise and Consumer-Segment wise to assess the current and up-coming natural gas demand potential
i. Existing Gas Allocation to Power, Fertilizer, Refinery, CGD, etc
ii. Potential demand for Natural Gas based on existing and upcoming capacity and alternate fuel sales for different gas consumers, say: Power, Fertilizer, Refinery, CGD, Industrial clusters, SEZ’s, etc
iii. Potential demand of natural gas based on state-wise and fuel-wise sales by different oil marketing companies
c. Information on expansion and new capacity addition plans for the key natural gas demand segments and assessment of potential gas demand for each of the qualified regions/states
a. Upcoming capacity as per actual plans by the respective companies for the key natural gas consumption segments, such as: Power, Fertilizer, Refinery, CGD, Industry, etc
b. Capacity additions as planned by the Planning Commission in the XII Plan Period (FY17)mand as estimated for the XIII Plan period (FY22)
c. Assessment of natural gas demand universe based on the respective conversion assumptions
a. Development of a detailed demand model and bottom-up natural gas demand outlook with the following layers
a. Consumer segment wise natural gas demand
i. Current Natural Gas Demand Universe, on a bottom-up study basis
ii. Foreseeable Future (say, Upto 2020) for Natural Gas Demand Universe. Based on actual capacity enhancement plans and government projections
iii. Non-Foreseeable Future (beyond 2020 and upto 2025) for Natural Gas Demand Universe. Based on industry projections and relevant assumptions
b. Region-wise/State-wise natural gas demand, with timing of such demand on the basis of
i. Current Scenario
ii. Upcoming/Foreseeable Future Scenario
iii. Non-Foreseeable Future Scenario
c. Assessment of Natural Gas supply scenario for the current, medium to long term scenario
a. Identification and mapping of key natural gas supply sources in India
b. Assessment of position of the various key supply sources to contribute to the future gas supplies, highlighting: Naturally declining/depleting, Upcoming with future supply potential, technically challenging supply sources, etc
c. Development of supply scenarios for future possible natural gas supplies,
i. Scenario I: based on the current gas supply scenario with modest rise in gas supply scenario, termed as Business-As-Usual (Realistic Scenario)
ii. Scenario II: based on any significant break-through in the natural gas market that would ramp-up the domestic gas supplies (Optimistic Scenario)
d. Summary of current and future natural gas supply scenarios to give a clear idea on how domestic gas supply will possibly behave vis-à-vis demand
6. STRATEGIC DEMAND-SUPPLY GAP ASSESSMENT BASED ON CH. 4 AND CH. 5 OF THE TOC
a. Assessment of pan India natural gas demand and supply scenario, and review of the existing and evolving D-S Gap. Understanding the factors impacting the demand and supply scenario
b. Assessment of consumer segment-wise pan India natural gas demand and supply assessment, based on the learning's from the Gas utilization policy and actual gas supply as directed by the government
i. The exercise will clearly identify the consumer segment-wise gas supply shortfalls in the current and future (foreseeable and non-foreseeable future)
ii. The exercise will outline the potential LNG demand universe or annual LNG imports universe for each of the consumer segments in the current and future (foreseeable and non-foreseeable future)
c. Assessment of region-wise and consumer segment-wise natural gas demand and supply scenario. The exercise will outline the following
i. Region wise Natural Gas demand-supply shortfalls and potential annual LNG requirement
ii. Region wise analysis of key gas deficit consumer segments and their potential annual LNG requirement
7. ASSESSMENT OF LANDED GAS PRICE FROM DOMESTIC AND RLNG SUPPLY SOURCES FOR THE QUALIFIED REGIONS/STATES BASED ON:
a. Domestic well-head gas price: Existing and evolving
b. Spot and Term LNG prices: Existing and evolving based on different LNG supply sources and pricing mechanisms
c. Regasification charges
d. Gas pipeline tariff and inter-connectivity charges
e. Taxes and duties
8. HIGH LEVEL GAS PRICE AFFORDABILITY INDEXING FOR EACH OF THE POTENTIAL NATURAL GAS CONSUMER SEGMENTS, SAY: POWER, FERTILIZER, REFINERY, INDUSTRIAL, CGD (DOMESTIC), CGD (CNG), CGD (INDUSTRIAL), CGD (INDUSTRIAL), ETC.
a. Outlook on the financial position of discoms against natural gas price escalations, key provisions for offtake of high-price gas
b. Government subsidy provision for fertilizer units to take high price gas
c. Outlook on pricing and price trends for key industrial fuels, such as FO, HSD, LPG, etc
d. Outlining the consumer segment wise gas price affordability bandwidth
i. Cut-off gas price for each consumer segments
ii. Development of scenarios for domestic gas supply, that will impact the consumer segment wise basket price of natural gas, and thus impact the appetite for LNG
9. RE-ASSESSMENT OF POTENTIAL LNG DEMAND AND ASSESSMENT OF TARGETABLE LNG DEMAND/MARKET, BASED ON
a. Scenarios of LNG prices in the country and eventual landed LNG price at gas market hubs and large consumer units in the qualified regions
b. Assessment of how the landed gas price (based on LNG) matches with Consumer segment-wise appetite for LNG in the respective qualified regions
c. Ranking of demand for LNG based on LNG Price and Consumer segment-wise demand curve
10. ORDERING THE QUALIFIED REGIONS IN TERMS OF
a. LNG demand base
b. LNG demand based on different LNG prices
c. Natural of LNG demand, i.e. long term and medium – spot demand
11. INDICATING THE LIKELY PRICE FORMULA THAT WOULD FACILITATE LNG PENETRATION IN INDIA
OTHER KEY FEATURES
a. Extensive Natural Gas Database: Region-wise and Consumer Segment-wise Natural Gas Demand
b. Critical Natural Gas Map of India: Mapping of Gas Pipeline Infrastructure, Domestic Supply Sources, LNG Supply Sources, Power Plants, Fertilizer Plants, Refineries, Industrial Clusters, LPG extraction plants, CGD
2. BACKGROUND
a. Historic domestic natural gas production trend
b. Historic natural gas consumption trend
c. Outlining the demand drivers for Natural Gas in India
d. Outlook on domestic natural gas utilization/supply priority, and how it has evolved during highly constrained domestic gas supplies
e. Region-wise domestic & LNG natural gas supply sources
f. Overall natural gas domestic gas supply scenario and demand curve for the next 10-15 years timeframe
g. Region-wise natural gas pipelines: routes, supply source, key consumers, technical configuration
h. Identification of gaps in gas pipeline infrastructure in key potential gas markets
i. Gas pipeline tariffs for the gas pipelines
3. SELECTION OF POTENTIAL NATURAL GAS MARKETS IN INDIA: PRE-QUALIFICATION OF REGIONS AND STATES
a. Segmentation of natural gas markets based on regions by segregating key states, say:
i. Northern Region
ii. Western Region
iii. Central Region
iv. East and North-Eastern Region
v. Southern Region
b. Mapping of connectivity/proximity of the identified regions to the domestic and imported gas supply sources
c. Mapping of natural gas pipeline infrastructure growth & development in the identified regions and possibility of future pipeline expansion and addition based on market information
d. High-level economic growth assessment in the identified regions to take into account future energy requirement based on economic growth
e. Understanding of key natural gas demand drivers in the identified regions, based on historic gas consumption profile and future demand development outlook
f. Selection of promising regions/cluster of states that are likely to contribute significantly in the overall growth in Natural Gas demand in future on the basis of matrix developed on the basis of the above parameters
4. DETAILED AND EXTENSIVE NATURAL GAS DEMAND ASSESSMENT AND DEVELOPMENT OF DEMAND MODEL FOR THE QUALIFIED REGIONS/CLUSTER OF STATES
a. Mapping of Power, Fertilizers, Refinery, LPG extraction, Industrial clusters, SEZ’s, CGD for the qualified regions, state-wise basis: Name of units, current capacity, gas off-take/potential gas demand;
b. Bottom-up assessment of Natural Gas demand universe, Region-wise and Consumer-Segment wise to assess the current and up-coming natural gas demand potential
i. Existing Gas Allocation to Power, Fertilizer, Refinery, CGD, etc
ii. Potential demand for Natural Gas based on existing and upcoming capacity and alternate fuel sales for different gas consumers, say: Power, Fertilizer, Refinery, CGD, Industrial clusters, SEZ’s, etc
iii. Potential demand of natural gas based on state-wise and fuel-wise sales by different oil marketing companies
c. Information on expansion and new capacity addition plans for the key natural gas demand segments and assessment of potential gas demand for each of the qualified regions/states
a. Upcoming capacity as per actual plans by the respective companies for the key natural gas consumption segments, such as: Power, Fertilizer, Refinery, CGD, Industry, etc
b. Capacity additions as planned by the Planning Commission in the XII Plan Period (FY17)mand as estimated for the XIII Plan period (FY22)
c. Assessment of natural gas demand universe based on the respective conversion assumptions
a. Development of a detailed demand model and bottom-up natural gas demand outlook with the following layers
a. Consumer segment wise natural gas demand
i. Current Natural Gas Demand Universe, on a bottom-up study basis
ii. Foreseeable Future (say, Upto 2020) for Natural Gas Demand Universe. Based on actual capacity enhancement plans and government projections
iii. Non-Foreseeable Future (beyond 2020 and upto 2025) for Natural Gas Demand Universe. Based on industry projections and relevant assumptions
b. Region-wise/State-wise natural gas demand, with timing of such demand on the basis of
i. Current Scenario
ii. Upcoming/Foreseeable Future Scenario
iii. Non-Foreseeable Future Scenario
c. Assessment of Natural Gas supply scenario for the current, medium to long term scenario
a. Identification and mapping of key natural gas supply sources in India
b. Assessment of position of the various key supply sources to contribute to the future gas supplies, highlighting: Naturally declining/depleting, Upcoming with future supply potential, technically challenging supply sources, etc
c. Development of supply scenarios for future possible natural gas supplies,
i. Scenario I: based on the current gas supply scenario with modest rise in gas supply scenario, termed as Business-As-Usual (Realistic Scenario)
ii. Scenario II: based on any significant break-through in the natural gas market that would ramp-up the domestic gas supplies (Optimistic Scenario)
d. Summary of current and future natural gas supply scenarios to give a clear idea on how domestic gas supply will possibly behave vis-à-vis demand
6. STRATEGIC DEMAND-SUPPLY GAP ASSESSMENT BASED ON CH. 4 AND CH. 5 OF THE TOC
a. Assessment of pan India natural gas demand and supply scenario, and review of the existing and evolving D-S Gap. Understanding the factors impacting the demand and supply scenario
b. Assessment of consumer segment-wise pan India natural gas demand and supply assessment, based on the learning's from the Gas utilization policy and actual gas supply as directed by the government
i. The exercise will clearly identify the consumer segment-wise gas supply shortfalls in the current and future (foreseeable and non-foreseeable future)
ii. The exercise will outline the potential LNG demand universe or annual LNG imports universe for each of the consumer segments in the current and future (foreseeable and non-foreseeable future)
c. Assessment of region-wise and consumer segment-wise natural gas demand and supply scenario. The exercise will outline the following
i. Region wise Natural Gas demand-supply shortfalls and potential annual LNG requirement
ii. Region wise analysis of key gas deficit consumer segments and their potential annual LNG requirement
7. ASSESSMENT OF LANDED GAS PRICE FROM DOMESTIC AND RLNG SUPPLY SOURCES FOR THE QUALIFIED REGIONS/STATES BASED ON:
a. Domestic well-head gas price: Existing and evolving
b. Spot and Term LNG prices: Existing and evolving based on different LNG supply sources and pricing mechanisms
c. Regasification charges
d. Gas pipeline tariff and inter-connectivity charges
e. Taxes and duties
8. HIGH LEVEL GAS PRICE AFFORDABILITY INDEXING FOR EACH OF THE POTENTIAL NATURAL GAS CONSUMER SEGMENTS, SAY: POWER, FERTILIZER, REFINERY, INDUSTRIAL, CGD (DOMESTIC), CGD (CNG), CGD (INDUSTRIAL), CGD (INDUSTRIAL), ETC.
a. Outlook on the financial position of discoms against natural gas price escalations, key provisions for offtake of high-price gas
b. Government subsidy provision for fertilizer units to take high price gas
c. Outlook on pricing and price trends for key industrial fuels, such as FO, HSD, LPG, etc
d. Outlining the consumer segment wise gas price affordability bandwidth
i. Cut-off gas price for each consumer segments
ii. Development of scenarios for domestic gas supply, that will impact the consumer segment wise basket price of natural gas, and thus impact the appetite for LNG
9. RE-ASSESSMENT OF POTENTIAL LNG DEMAND AND ASSESSMENT OF TARGETABLE LNG DEMAND/MARKET, BASED ON
a. Scenarios of LNG prices in the country and eventual landed LNG price at gas market hubs and large consumer units in the qualified regions
b. Assessment of how the landed gas price (based on LNG) matches with Consumer segment-wise appetite for LNG in the respective qualified regions
c. Ranking of demand for LNG based on LNG Price and Consumer segment-wise demand curve
10. ORDERING THE QUALIFIED REGIONS IN TERMS OF
a. LNG demand base
b. LNG demand based on different LNG prices
c. Natural of LNG demand, i.e. long term and medium – spot demand
11. INDICATING THE LIKELY PRICE FORMULA THAT WOULD FACILITATE LNG PENETRATION IN INDIA
OTHER KEY FEATURES
a. Extensive Natural Gas Database: Region-wise and Consumer Segment-wise Natural Gas Demand
b. Critical Natural Gas Map of India: Mapping of Gas Pipeline Infrastructure, Domestic Supply Sources, LNG Supply Sources, Power Plants, Fertilizer Plants, Refineries, Industrial Clusters, LPG extraction plants, CGD
