Global Lng Tarde- Case Study of India

8/14/2019 Global Lng Tarde- Case Study of India

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GLOBAL LNG TARDE- CASE STUDY OF INDIAGLOBAL LNG TARDE- CASE STUDY OF INDIA


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The LNG value chain consists several interconnected elementssuch as foreign gas field, liquefaction plant, LNG tanker, LNGimport terminal, and interstate pipeline system.

The first segment in the LNG value chain is exploration &production ,then is liquefaction, LNG shipping, regasification,

& storage.

The worlds gas markets are concentrated in three main areas:North America, Europe and Asia.

LNG :INTRODUCTIONLNG :INTRODUCTION


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The expected demand growth in Atlantic basin islikely to make the Middle East worlds leading LNG

producing zone. 2015, LNG production in this Zoneshould stand at about 170 billion cubic meters.

Consumption of natural gas will increase worldwidefrom 100 trillion cubic feet in 2004 to 163 trillion

cubic feet in 2030 according to the IEO 2007reference.

Over the last ten years international LNG tankertrade has increased by 7.2%/ year on average.

LNG tanker will grow rapidly to 196-232 Mt in 2010and 310-375 Mt in 2020


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Until 1984, in USA and Europe pipeline industry wascompletely regulated by the governments.

To buy or sell gas, users and producers has to deal with thepipeline they could not deal directly that was the reason why

gas markets failed to exist.

In 1985, in US, pipelines were given the option to becomeopen access means it was deregulated.

This change in the pipeline industry finished all the barriers tothe market and the first time in more than fifty years there wasthe competition between the producers.

DEREGULATION OF PIPELINE GAS MARKETDEREGULATION OF PIPELINE GAS MARKET


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Need to diversify the fuel mix

Imperatives of a cleaner environment along the lines of theKyoto Protocol

Oil price shocks of 1973/74 and 1979/80

Emergence of big new Asia markets: India and China.

Higher gas prices on some markets (North America, andEurope) tend to favors the growth of LNG

FACTORS AFFECTING DEMAND FOR LNGFACTORS AFFECTING DEMAND FOR LNG


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World LNG trade divided into three regions:

1.Pacific basin - Japan is the major Importer-81.86 Bcm. 2. Atlantic basin Spain is the major Importer-24.42 Bcm. 3. Middle East Exporters.(Unit -Billion Cubic Metres) USA Trinidad & Tobago

Oman Qatar UAE Algeria Egypt Libya Nigeria

Australia Brunei Indonesia Malaysia

EXPORTING COUNTRIESEXPORTING COUNTRIES


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USA Dominican Republic Puerto Rico Mexico Belgium France Greece Italy Portugal Spain Turkey UK China

India Japan South Korea Taiwan

IMPORTING COUNTRIESIMPORTING COUNTRIES


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Pacific Basin LNG demand will account for about 45% of theworld total in 2020.

Many new LNG receiving terminal projects had initially beingannounced in India and in China.

Atlantic Basin could experience faster growth of about10%/year and account for about 55% of world LNG demand by2020.

World natural gas consumption has increased at an average

annual rate of 2.6% over the past two decades, due to itseconomic and environmental advantages .


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GLOBAL MARKET DEVELOPMENTGLOBAL MARKET DEVELOPMENT


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The LNG Sales and Purchase Agreement commits the parties to supply

and purchase of the LNG and major investments in facilities to produce,transport, receive and consume the LNG for both sides.

Term of Policy Clarification on Quantity to be Delivered Annually and Flexibility to Increase or

Decrease Volumes Price Responsibility of Marine Transportation Assignment Amendment Off-Specifications Arbitration Confidentially and Representation

Payment Security Gas Supply Area

LNG CONTRACTSLNG CONTRACTS


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Diversion Rights

Invoice Payment

Scheduling Procedures

Delivery Rate Temperature and Pressure

The Heating Value and Main Components of the LNG

Measuring and Testing

Force Majeure

Destination

ContdContd


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Indias LNG imports comes from Algeria, Egypt, Nigeria, Oman,Qatar, United Arab Emirates, Australia, and Malaysia.

India started receiving LNG shipments in January 2004 with the start-up of the Dahej terminal in Gujarat state.

Indias second terminal, HaziraLNG a joint venture of Shell andTotal. The facility has a capacity of 2.5 mta (488 Bcf/y), which may

be expanded to 5 mta (975 Bcf/y) in the future.

Demand for natural gas is expected to grow three fold over the nextfew years. By 2011, the demand for gas is expected to grow from thecurrent 119 mmscmd to 325 mmscmd

COUNTERY WISE ANALYSIS : INDIACOUNTERY WISE ANALYSIS : INDIA


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LNG is expected to contribute nearly 31 per cent of the gas suppliesin India by 2011 as compared to 21per cent .

The growth will come from the expansion of Dahej terminal andcommencement of new capacities at Dabhol and Kochi to the tune of1.5 MMTPA and 2.5 MMTPA respectively.

Fertilizers segment in India would boost LNG supplies.

Reliance Industry has made a discovery of seven trillion cubic footgas reserves in the KG DW-6/98 block in the Krishna-Godavari basin.

It will remove fuel deficit at urea making fertilizer plants &meets half of the 39 mmsmd gas shortfall in power plant and

also with this discovery of Reliance UKS 1/3 demand will bemet


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The gas demand in India is expected to grow to over 300MMSCMD by 2025.

This new find that promises to deliver another 40 MMSCMD

gas will help India more or less meet its immediate demand.

KG-D6 gas will replace about seven per cent of India's oilconsumption in 2009-10.

ContdContd


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Europe will completely de regulate the pipeline gas market due to which thegas prices will become cheaper.

New LNG terminals are under construction in the Asia-Pacific region whichshows the new big market for the natural gas consumption.

North America will emerge as the largest target for LNG imports.

Europe will also emerge as very big LNG importer in coming years.

The new finds in India opens up lot of opportunities but the markethas been subsidized gas for so long is not yet ready for it.

CONCLUSIONCONCLUSION


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KG-D6 gas will replace about seven per cent of India's oilconsumption in 2009-10, rising to 14 per cent in the followingthree years.

US will become a dominant LNG market in future.

Most demand growth will come from Newer LNG importerssuch as China and India, with slower demand in Japan andSouth Korea.

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Global Lng Tarde- Case Study of India