Challenges and feasibility

analysis of PNG and CNG

infrastructure
Energy Policy Project

Group 10
BISWA MOHAN PATI (M17-11)
TUHIN BORGOHAIN (M17-33)
UJJWAL RAO (M17-34)
Objectives
• Status of current CNG & PNG infrastructures in India
• The need to develop CNG & PNG infrastructure
• Key elements of PNG & CNG Infrastructure
• Challenges for development of PNG & CNG infrastructure
• Feasibility analysis of PNG & CNG infrastructure
• How the government is handling those issues ?
• Plans for the future developments
• Prescriptive solutions
Introduction
• PNG = Piped Natural Gas (≤ 4 bar)
• Used for domestic and industrial purpose
• CNG = Compressed Natural Gas (>200 bar)
• Transportation purpose

Key elements of PNG & CNG Infrastructure

Gas Pipelines

PNG & CNG Infrastructure R-LNG Terminals

CGD Network
Challenges for development of PNG & CNG infrastructure

• Lower Availability of Natural Gas Reserve 1

• R/P of India = 43.52 2
• With a total demand of 148.5 MMSCMD 2 against a reserve of 3398.25
MMSCMD 2, India will be depleted of natural gas in about 22-23 years

• High import cost 1

• India purchases LNG at $7/MMBTU against $2.94 Henry Hub Price/MMBTU 2
• Leads to lower affordability by consumers

1. Gas Market in India: Overview and future outlook. Ernst & Young
2. BP Statistical Review of World Energy 2018
Challenges for development of PNG & CNG infrastructure
(contd.)
• Inadequate transmission and distribution infrastructure
• Total pipeline capacity = 451.36 MMSCMD 3
• Throughput = 192.57 MMSCMD 3
• Utilisation = 42.6 %
→ Lack of proper distribution network has led to inefficient utilization of domestic
capacity

• Limited import facilities

• Total import capacity = 81 MMSCMD 1
• Limited LNG terminals and R-LNG facilities (will be discussed shortly)

3. www.ppac.org.in ~ Petroleum Planning and Analysis Cell

Feasibility analysis of PNG & CNG infrastructure

• Potential sources 2
Major Importers (% of total imports) Domestic production (% of total
domestic production)
United States 0.60%
Andhra Pradesh (KG Basin) 3.21%

Australia 2.50%
Gujrat 4.20%

Nigeria 3.60%
Tripura 5.70%

Qatar 13.20% Assam 9.40%

0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00%
Feasibility analysis of PNG & CNG infrastructure
(contd.)
• Potential entry ways to the Indian market

LNG Terminal Capacity (MMSCMD)

Dahej Port 4 36
Dhabol Port 5 18
Kochi Port 4 18
Hazira Port 6 9
Dhamra Port (developing) 7 18

4. www.petronetlng.com ~ Petronet LNG

5. www.gail.co.in ~ GAIL
6. www.haziralngandport.com ~ Hazira LNG and Port
7. www.adaniports.com ~ Adani Ports
Feasibility analysis of PNG & CNG infrastructure
(contd.)
• Landed cost of delivery (in Delhi):
• CNG = Rs. 41.97/kg 5
• PNG = Rs. 38.77/kg 5 Viable profit margin
• Import price = Rs 25.79/kg 2

• Expected demand and supply for natural gas:

• Expected demand by 2029-30: 713.49 MMSCMD 8
• Expected supply by 2029-30: 448.20 MMSCMD 8

8. Balyan, A. K. "Meeting Demand Challenges of an Emerging

LNG Market: India." Gas 9, no. 11 (2013): 20.
Conclusion
• Overcome underutilization through parallel development of import,
transmission and distribution infrastructure
• Tie up with new importers at lower import prices to gain price parity with
world average (e.g. recent tie-up with Russia at $5.5/MMBTU 9)
• Develop additional capacity of LNG terminals to capitalize on the import
sources of LNG
• Presence of import partners, viable profit margin and demand-supply gap is
in favor of PNG & CNG infrastructure

9. https://goo.gl/LiMD1u ~ Times of India

THANK YOU