School of Petroleum Management ( PDPU) (PGDPMX-2012) Module-VI

(Business of LNG-I)

Assignment – Prepare a blue print of the LNG imports and supporting infrastructure required in India by 2020

Submitted By: Pradipsinh Parmar Submitted To:Dhiren M Desai.dhiren,desai@eeps.in

Roll no:(20123013) Email:pradipje@yahoo.co.in

IntroductionIndia is the fourth largest consumer of energy in the world after USA, China and Russia but it is not endowed with abundant energy resources. It must, therefore, meet its development needs by using all available domestic resources of coal, uranium, oil, gas, hydro and other renewable resources, and supplementing domestic production by imports.

The Indian economy has been projected to achieve an average real GDP growth of 6.4% during 2008-2035. Energy availability is key to economic growth and therefore, going forward high economic growth would lead to increase in the energy consumption of the country. The primary energy mix of India is also set to alter on account of the substitution of oil by natural gas. The share of natural gas in the energy mix is expected to increase to 20% in 2025 and beyond as compared to 11% in 2010.The expected change in the primary energy basket for India in 2010 and 2025 has been presented in Table 1

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Macro analysis for demand/ supply of Gas in India

The liquefaction of natural gas dates back to the 19th century when German engineer Karl Von Linde built the first compressor/refrigeration machine in 1873. The first commercial natural gas liquefaction plant began operations in 1941 in Cleveland Ohio. In 1959, the first LNG tanker, the Methane Pioneer, carried a LNG cargo across the Atlantic Ocean from the United States to the United Kingdom.With the increasing demand and profitability of LNG, there has been a marked increase in the number of LNG tankers and facilities. There has also been a fast paced conversion to newer technology driven by economies of scale. In July 2008, Samsung Heavy Industries delivered the LNG tanker, Mozah, with a capacity of 266,000 cubic meters, to EXXON. That capacity is basically double that of tankers built 5 years ago.This report will continue with a description of the LNG supply chain and a look at current trends and risks associated with LNG.

Picture Oil and Gas production platform in sea.

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India’s primary energy supply is currently dominated by coal (53%),oil (30%),Hydro 5% and least stand for nuclear only 1%, while the share of natural gas is only 11%. The demand for natural gas is 61 bcm (between 2009 and 2010) and the proved and recoverable reserves are estimated at 1437 bcm as of April 2010.Natural gas use in India really started to grow in the late 1970s after the first major gas discoveries in the western offshore region and the development of the first transmission pipeline in the northern region. Before 2009, gas demand potential was Estimated to be 20 or 30 bcm higher than actual use as consumption had been constrained by the lack of supply for over a decade. To address the supply shortfall, the Indian government passed some reforms at the end of the 1990s to encourage Domestic production and the construction of liquefied natural gas (LNG) terminals Currently the distribution network is concentrated in Western India. The two LNG terminals (Dahej and Hazira) are also on the west coast of India. Due to lack of natural gas infrastructure, a pilot scale LNG distribution thru LNG tankers is also Being studied by Petronet LNG Sources: International Energy Agent (IEA), MoPNG, MoP, GAIL, PNGRB, Petronet LNG, Interviews

Primary demand and Supply analysis of Natural GAS in India.India’s limited access to energy supplies may limit its economic growth potential.The primary and priority consumers of natural gas are the fertilizer and the Power industries. The secondary consumers are city gas distribution networks, compressed natural gas (CNG) and industrial users. In the electricity sector, India is facing a serious crisis; the present energy and peaking shortage in the country is pegged at 10.3% (March 2011).The planning commission of India has set up an expert group to recommend an integrated energy policy. Many of the policies Recommended for coal are already implemented, but the progress on Power sector has yet to show results while the oil and gas sector continues with an unsustainable pricing policy.

Historically natural gas was cheaper than alternate fuel like petrol,diesel,naptha oil, and other LSHO\FO.With the increasing demand of gas and technological advancement had made it viable to use large scale of gas in power,fertlisers, and domestic use.

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It has become easier for the power, fertilizer and CGD sectors, as well as industrial and commercial establishments, to switch over to natural gas for their energy requirements. In the near future power and fertilizer sectors are expected to remain the anchor segments for natural gas demand in India. Going forward though, with the additional supply of gas significant demand for natural gas is also expected to come from the industrial (usage both in process and power generation - cogeneration) and CGD segments. The total consumption of natural gas was 127 mmscmd (January 2013) with power and fertilizer sectors consuming 36 and 39 mmscmd of gas respectively. The sector wise consumption has been presented in Table 2.

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Indian Power sector Demand and supply analysis.As of March 31, 2012 India had an installed power capacity of almost 2,00,000 MW.

  Hydro Thermal Nuclear

R.E.S. Total

    Coal Gas Diesel Total   (MNRE)  STATE 27,380 49,457 4,965 603 55,025 0 3,514 85,919PRIVATE 2,525 23,450 6,713 597 30,761 0 20,990 54,276CENTRAL 9,085 39,115 6,702 0 45,817 4,780 0 59,683TOTAL 38,990 112,022 18,381 1,200 131,603 4,780 24,503 199,877

The gas based power generation 18381MW is 9.1% of India’s total generation capacity. The following table gives power sector gas demand as per national planning commission report in 12th and 13th plan year.

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Supply analysis of Natural GAS in India.Current supply situation of natural gas in India.

The projection of supply of gas in India from domestic and LNG import up to year 2029-30

Both domestic gas production and gas imports have to increase in order to meet the demand from the power and fertilizer industries. The natural gas in India is sold in different forms:

i) Regasified Liquefied Natural Gas (RLNG) through pipelines;ii) CNG compressed to 200-250 barg used as fuel for

transportation;

iii) Piped Natural Gas (PNG)/City Gas to domestic users and

iv) Natural Gas transported directly from onshore/offshore field Production,

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India has 1437 bcm of proven natural gas reserves as of 1stApril 2010 of which 829 bcm are onshore and the rest offshore reserves.

Domestic production of natural gas was 47.5 bcm in 2010 (Figure of which 82% comes from offshore and rest from onshore fields (45% from ONGC and the rest from JVC/Private sector). Production had been flat at 30 bcm since 2002, till the start of eastern offshore KG field in April 2009 which added approximately 15 bcm (2009-10).

Indigenous gas production in India can be classified on regulatory & contractual basis as follows, nominated fields awarded to National Oil Companies (NOC), Small size & Medium size fields awarded to private parties, pre-NELP discovered fields, NELP fields and CBM blocks. For projecting the natural gas supply from the domestic sources for the period 2012-13 to 2029-30, the gas supply projections provided in the Plan Document have been considered as reference. However, these projections have been further refined on the basis of information obtained from DGH and ONGC as provided in Table 16 and table 17 and table 18.

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Gas Imported through LNG and Pipe Line in India.

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India’s current LNG import capacity is 12.5 MMTPA (15.8 bcm) with LNG terminals at Dahej (10 MMTPA) and Hazira (2.5 MMTPA). Two more terminals are under construction at Dabhol(5.5 MMPTA) and Kochi (2.5 MMTPA and expandable to 5.0 MMTPA) and will start in year 2013. These LNG supplies are sourced from Qatar, Australia, and Trinidad and Tobago. The bulk demand for India natural gas is from the power sector (45.2%) and the fertilizer industry (27.9%). These two industries account for 73% of total natural gas consumption.

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India's gas demand to more than double to 606 mmscmd by 2022India's natural gas demand is likely to more than double to 473 million standard cubic meters per day by 2016-17 with most of incremental demand coming from power plants.

As per the projections made by Oil Ministry for the 12th Five Year Plan (2012-13 to 2016-17), current gas demand of 189 mmscmd is likely to rise to 473 mmscmd.

"The overall demand would grow from 293 mmscmd (in 2012-13) to 473 mmscmd (in 2016-17) over the 12th plan period and from 494 mmscmd (in 2017-18) to 606 mmscmd (in 2021-22) over the 13th plan period," according to the projections.

"This represents a compounded annual growth rate of 7.5 per cent over the two plan (10 year) periods," it said.

Of the 473 mmscmd demand at the end of 12th Five Year Plan period, 207 mmscmd would be from power and another 113 mmscmd from fertilizer plants. Power plant would need 307 mmscmd by 2021-22 while fertilizer units may not see any incremental demand during 2017 to 2022.

Domestic natural gas production currently is about 120 mmscmd and another 46.3 mmscmd is imported in form of liquefied natural gas (LNG). The total availability of 164 mmscmd is short of current demand of 189 mmscmd.

State-owned Oil and Natural Gas Corp (ONGC) produces under 51 mmscmd of gas while output from the prolofic KG-D6 fields of Reliance Industries is about 45 mmscmd. Oil India produces 6.6 mmscmd and

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another 11.9 mmscmd comes from western offshore Panna/Mukta and Tapti fields.

Of the current supplies, 61.4 mmscmd goes to power sector while fertilizer plants consume 37.7 mmscmd. The remaining is used by city gas projects, refineries, petrochemical plants and sponge iron units.

While KG-D6 gas is priced at USD 4.20 per million British thermal unit, PMT gas is priced at USD 5.57-5.73 per mmBtu. ONGC sells gas to priority sector at USD 4.2 per mmBtu and to non-priority sector at USD 4.2-5.25 per mmBtu. LNG is priced at USD 8.4-16 per mmBtu.

According to the projections, domestic gas out put would rise to 210 mmscmd by 2016-17 with ONGC's gas production rising to 92 mmsmcd. Private firms including Reliance would produce 107 mmscmd.

LNG imports are projected to rise to 258 mmscmd. The incremental imports would come from Petronet LNG Ltd's currently operational Dahej terminal in Gujarat being expanded to 15 million tons from current 10 million tons and its 5 million tons a year facilities each coming up at Kochi in Kerala and east coast.

New terminals are envisaged at Ennore in Tamil Nadu and Mundra in Gujarat while Royal Dutch Shell's Hazira terminal in Gujarat is projected to be expanded to 10 million tons from current 3.6 million tons.India is becoming a major oil importer and will soon become the third largest importer of oil next to Japam,South KoreaUSA and China. Technology innovations to improve efficiency of fuel use by automobiles, developing Mass Rapid Transport Systems for moving passenger traffic and also shifting goods transport from road to rail would result in large savings of oil and reduce import dependence. The 12th Plan should aim at developing an efficient public and freight transport system.

Major investments to get access to fuel sources located in other energy resource-rich countries will be taken up as an integral measure of overall government economic policy to strengthen energy security. This will cover coal, oil, gas reserves and uranium. Both public and private investors will be encouraged to acquire such assets and develop supply sources in different parts of the world to augment domestic availability. International gas resources from liquefied natural gas (LNG) and through pipelines would supplement the energy requirements and be negotiated. The current LNG infrastructure would be further developed to access this. Domestic gas pipeline network will be expanded and a national gas grid developed. The present policy of promoting investments in private sector in refineries and pipelines for transporting both oil and gas would continue. The overall oil pipeline network for availability of high quality transport fuels will be augmented as new refinery capacities come up and this will help provide a good export potential and LPG

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for cooking and availability of quality fuels for transport.

source: http://news.oneindia.in/hyderabad/panel-seeks-blueprint-to-improve-natural-gas-output-supply-1340623.html

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Macro analysis for World LNG Supply Market.

World natural gas consumption grew by 2.2%, below the historical average of 2.7%. Consumption growth was above average in South & Central America, Africa, and North America, where the US (+4.1%) recorded the largest increment in the world. In Asia, China (+9.9%)

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and Japan (+10.3%) were responsible for the next-largest growth increments. These increases were partly offset by declines in the EU (-2.3%) and the Former Soviet Union (FSU) (-2.6%). Globally, natural gas accounted for 23.9% of primary energy consumption. OECD consumption grew more rapidly than non-OECD consumption for the fi rst time since 2000.Global natural gas production grew by 1.9%. The US (+4.7%) once again recorded the largest volumetric increase and remained the world’s largest producer. Norway (+12.6%), Qatar (+7.8%), and Saudi Arabia (+11.1%) also saw significant production increases, while Russia (-2.7%) had the world’s largest decline in volumetric terms LNG trade fell in 2012 after 30 years of consecutive growth. Global flows fell by 1.6% from 241.5 MT in 2011 to 237.7 MT in 2012. The contraction was largely driven by supply-side issues in Southeast Asia and domestic and political challenges in the Middle East and North Africa (MENA) region. Japan and Korea are the

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world’s dominant LNG importers and accounted for 52% of the market, up 4% from 2011.The global market for shipped natural gas is entering key years of change in 2014 with several new buyers emerging while big new supplies will only slowly become available from 2015, resulting in a tight market for years to come.

Demand for liquefied natural gas (LNG) has been rising for years, driven mostly by booming Asian demand and a loss of nuclear power in Japan and more recently South Korea. Import needs are set to rise further in 2014 as China and Latin America are becoming increasingly active buyers.

“Looking towards 2014,... rising Chinese import capacity and continued strong demand out of Latin America suggest global LNG markets are heading towards another tight year,” Bank of America Merrill Lynch (BoAML) said in a research note this month.

While demand for LNG is expected to rise, analysts say that big supply additions are not expected before 2015.

“On the supply side, there is plenty to be concerned about. Projects in Angola, Algeria and Nigeria have been underperforming. Major Australian projects should start to hit the market in 2014, but we continue to see a dearth of new liquefaction projects coming online until 2015,” BoAML said.

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As a result of the tight market in 2014, the report said that Asian spot prices could rise above last winter’s highs of almost $20 per million British thermal units (mmBtu) this winter, up from a current price of $18.30 per mmBtu.

While some new supply sources are expected to ease the market somewhat by 2015, driven largely by new exporters from the US and Australia, analysts say that a rise in LNG demand of around 7% a year until 2020 will still result in a tight market for most of the decade.

“Global gas demand is surging, which is driven by a preference towards lower carbon fuels, a shift away from nuclear and emerging market growth. As a result, we expect international gas markets to remain ‘tight’ through to 2020,” Bernstein Research said this month in a global gas market study.

Beyond an overall tight market outlook, large regional supply and demand differences are expected to remain in place.North America, where the shale gas boom has pulled down prices, will benefit from low domestic prices and an opportunity to export its excess gas to Asia, where prices are expected to rise further on the back of booming demand and a lack of significant gas production of its own.

“Gas markets will remain fragmented, divided between North America, where gas is abundant and prices are low and international markets where gas will be supply constrained and prices continue to rise,” Bernstein said.

The researchers added that this imbalance would result in a sharp rise in global LNG trading activity, as producers and shippers try to take advantage of regional price differences.Beyond a tight market, LNG trading is set to become more diverse, with several new buyers and sellers entering the stage.

On the demand side, China is fast emerging as a major buyer, with six LNG import terminals likely to become operational between November 2013 and the end of next year..

China, which is already the world’s top energy user ,but is so far only a small LNG player, is keen to curb use of dirtier coal and aims to triple the use of natural gas to top 300bn cubic metres (bcm) by 2020, with nearly a third of that having to be imported to China via LNG.The Chinese gas demand\supply projection from 2010 to 2020.00

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In the Americas, import demand is also rising especially in Mexico and Argentina where domestic production is dropping while demand is on the up.Reacting to rising demand, new sellers are slowly emerging.

Russia, the world’s biggest supplier of pipeline gas, has so far been slow to enter Asia’s booming LNG market, but the government passed legislation this month towards allowing rivals of state-controlled Gazprom to export LNG in a move to enter growing Asian markets.

In North America, the US will begin to export LNG from 2015 and most analysts say that volumes will reach over 50bcm by 2020, and Canada also has plans to begin exports this decade.

But the biggest new exporter is likely to be Australia, which could challenge the world’s top LNG shipper Qatar by reaching annual export volume of almost 100bcm by 2020. Qatar exported 105.4bcm of LNG in 2012.However, most of this LNG will become available after 2015 and at minimum costs of almost $15 per mmBtu, so it will act more as a price stabilizer rather than help bring down prices.Other major LNG export sources, such as East Africa or the East Mediterranean, are not expected to come to come to market before 2018 at the earliest.

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Point :3

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Analysis of existing and planned infrastructure for Gas in india.

The Indian existing LNG value china .

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Liquefied Natural Gas (LNG) is natural gas that has been refrigerated to the point that it condenses to a liquid. This occurs at a temperature of approximately -161 C (-256F). This liquefaction reduces the volume of the gas by a factor of approximately 600. This increase in economy of scale makes the storage and transportation of natural gas extremely economical, and facilitates global access to a relatively abundant source of energy.The liquefaction of natural gas dates back to the 19th century when German engineer Karl Von Linde built the first compressor/refrigeration machine in 1873. The first commercial natural gas liquefaction plant began operations in 1941 in Cleveland Ohio. In 1959, the first LNG tanker, the Methane Pioneer, carried a LNG cargo across the Atlantic Ocean from the United States to the United Kingdom.With the increasing demand and profitability of LNG, there has been a marked increase in the number of LNG tankers and facilities. There has also been a fast paced conversion to newer technology driven by economies of scale. In July 2008, Samsung Heavy Industries delivered the LNG tanker, Mozah, with a capacity of 266,000 cubic meters, to EXXON. That capacity is basically double that of tankers built 5 years ago.This report will continue with a description of the LNG supply chain and a look at current trends and risks associated with LNG.

Typical LNG Supply Chain

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In India LNG key player are Petronet LNG and shell Hazira both located in state of Gujarat. The (PLL) has a share of 20 per cent in the gas market currently. The company has an import and re-gasification terminal at Dahej, which has a capacity of 10 million metric tonnes a year. The company is in the process of increasing the capacity of its Dahej terminal by additional 5 MMTPA. The additional jetty under construction is to be commissioned by September 2013. The company claims to raise its LNG regasification capacity by one-and-a-half times to 25 million tonnes by 2015.

The company in the process of setting up a Greenfield LNG terminal of 5-million-metric-tonne terminal in Kochi, which is expected to be commissioned by the end of 2013. With the commissioning of the terminal, the gas market in the south is expected to develop and more and more demand is likely to be seen.

PLL and Gazprom Marketing and Trading Singapore (GM&TS), the Singapore affiliate of Gazprom Global LNG (GGLNG) and 100 per cent subsidiary of Gazprom Marketing & Trading, have entered into a Memorandum of Understanding (MoU) for the supply of LNG on a long-term basis. As per the agreement, PLL will receive 2.5 million tonnes per annum of LNG from GM&TS's international supply portfolio for a period of 25 years.

The company has contracted to receive 1.44 MMTPA LNG from Exxon Mobiles 25 per cent stake in Australia’s Gorgon project at prices higher

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than the existing LNG contracts. The supply is expected to start in 2014-15. The terminal will be the biggest in the country and the first one in South India, and will have the capacity of 38 MMSCMD a day when completed.

PLL has sourced about 7.5 million tonne LNG through long-term Contract with RasGas, Qatar and a mid-term contract which will contribute 1.5 million tonne, totaling around 9 million tonne, with back to back sales arrangement with GAIL, IOCL & Bharat Petroleum Corporation Limited (BPCL). The company is sourcing additional LNG through spot or short-term contracts and is selling it to offtakers or bulk buyers.

PLL, in partnership with GAIL, is looking at the possibility of setting up the countryÊs first LNG terminal on the east coast, which is expected to have a capacity of five million tonnes a year. Depending on the feasibility study the possible location of the terminal would be anywhere between Kakinada in Andhra Pradesh and Haldia in Bengal. The terminal may be a floating one or may be on land. The floating unit, which is present in Kuwait, Dubai and Brasil, is faster to deploy and may cost 2,400 crore, about 25 per cent less than a terminal anchored to land.

GAIL has signed a joint venture agreement with Hindustan Petroleum and Greater Calcutta Gas Supply Corporation for setting up a Liquefied Natural Gas (LNG) Floating Storage and Regasification Unit (FSRU) at Dharma in Orissa, and this could entail an investment of about 3,000 crore. Gail will also set up IndiaÊs first 4 million tonne capacity floating LNG terminal off the Andhra coast with an investment of about 2,000 crore. The project will be implemented by Andhra Pradesh Gas Distribution Corporation, a company jointly promoted by Gail Gas and Andhra Pradesh Gas Infrastructure, which has signed an agreement with GDF Suez LNG UK for jointly setting up a FSRU.

Ratnagiri Gas and Power Private Limited (RGPPL), IndiaÊs third LNG import and regasification terminal at Dabhol in Maharashtra, is working towards raising its capacity to 5 mtpa. The terminal is expected to operate at full capacity during 2013-14. USD 641 was invested in the construction of the terminal. GAIL is also working on doubling the capacity of Dabhol power projectÊs gas import facility to 10 million tonnes a year.

Shipping Corporation of India (SCI), which took over the management of Dabhol LNG terminal recently, sees great growth potential in LNG sector and has been awarded a three year contract for providing port and marine services to the dedicated Dabhol re-gasification terminal,

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owned by RGPPL.

Currently, Royal Dutch Shell PLC and France's Total SA, the two multinational oil and gas companies and the operators of the Hazira terminal in Gujarat, are in the process of increasing the capacity of LNG terminal at Hazira to the tune of 5 million tonnes (mt) by 2013 from the current capacity of 3.6 mt. They have estimated an investment of around ` 450 crore for their Hazira expansion project. Due to shortfall in gas production from its KG-D6 field, Reliance Industries Ltd (RIL) is set to enter into the marketing of imported natural gas. India Gas Solutions, the equal joint venture between RIL and British Petroleum (BP) set up to source and market natural gas in India, will shortly bring in LNG through the terminals of Shell India and Petronet LNG. RIL is in talks with various LNG terminal operators to book exclusive capacity at the existing LNG terminals.

Natural Gas Pipe Line Infrastructure in India.

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India has a relatively under-developed gas pipeline infrastructure when compared to some developed countries. However, it is growing rapidly in tune with increasing demand and growing natural gas supplies. India, currently, has a network of ~13,000 km of natural gas transmission pipelines with a design capacity of around 337 mmscmd. This network is expected to expand to around 28,000 Kms of pipelines with a total design capacity of around 721 MMSCMD in next 5-6 years taking the country close to the formation of a National Gas Grid connecting all major demand and supply centers in India. This will ensure wider and uniform availability of gas across all regions for economic and social progress.

In India GAIL India (“GAIL”) owns the largest network of the natural gas transmission infrastructure present in the country. The company currently owns and operates 9,000km (approx.) of high-pressure natural gas pipelines with a transmission capacity of more than 160mmscmd. At around 3,750 km in length, GAIL’s Hazira-Vijaipur-Jagdishpur (HVJ) pipeline is the longest natural gas pipeline network in the country operating at 100% capacity. With no free capacity, this network has been unable to meet the increase in domestic natural gas supplies stemming from the commencement of production at the KG D6 field and the increase in India’s overall RLNG capacity. To overcome this problem, GAIL has done expansion and up gradation of its network. The rest of the country’s natural gas trunk pipelines network is owned by Gujarat State Petronet Limited (GSPL) and Reliance Gas Transportation Infrastructure Limited (RGTIL) with a small network owned by Gujarat Gas Company Limited (GGCL) and Assam Gas Company Limited (AGCL). Although the gas pipeline coverage has increased, it is still inadequate to channelize the gas supply to demand centers in the

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country. The present state of natural gas transmission infrastructure in the country has been summarized in the Table 25

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A summary of pipeline to expected at the end of year 2030.0

ChallengesLNG poses two major challenges. For long-term supplies, the price of LNG is generally linked to the price of crude oil, and the prices of RLNG are much higher than the prices of domestic gas, including from the NELP fields.

This forms the first major challenge. The second challenge is the volatility of the prices of such supplies being linked to crude. High

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prices coupled with high volatility make it difficult for the user industries to plan investments based on LNG. Another challenge is the pipeline network in India. For the country to be able to connect to new markets, its pipeline network needs to grow at a much faster rate.

In the country, in the long-term, the supply of LNG is likely to increase, and would be more expensive than the current price paid for Qatari LNG. If the country intends to attract additional LNG in the long-term, it needs to compete in the global gas markets at prices potentially higher than the current ones; or else the supplies will be taken over by China and other such Asian markets.

Coastal shipping is underdeveloped in India. In 2007 it accounted for only 7% of domestic cargo movement compared to 15% in the US, 30% in China and 43% in EU Countries. (Figure 11). In India, 62% of the freights carried by road and about 31% by rail. The commodities carried by coastal shipping have mainly been bulk and break bulk commodities. The cargos currently transported through coastal shipping constitute crude oil, iron ore, cement and others.

There are 13 major ports and a number of minor and intermediate ports providing tremendous potential for coastal shipping Low penetration in short sea shipping could be attributed to several factors: lack of comprehensive port infrastructure and equipment, high fuel bunker prices, high container cargo handling costs (2.6 times higher than China), and lack of promotion initiatives from the Indian governmentFigure 11. Share of transportation mode in 2008.

Currently, Petronet has three long term time charters (until 2028) for LNG carriers importing LNG fromQatar to Dahej. The three ships are

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Disha (delivered 2004), Raahi (delivered 2004) and Aseem (delivered 2009). Petronet has stated that it has been approached by four companies to date to participate in JV on various technologies and that it is very keen in acquiring suitable partnersShort sea shipping in India will grow significantly.

Currently, the government is investing heavily in developing port and shipping infrastructure. A total investment of $22.3 billion involving 387 projects is expected to be made in the 13 major ports by 2012. Non-major ports on the other hand are expected to witness investment worth $7.7 billion in the current Eleventh Five Year Plan by increasingly involving private operators under the Public Private Partnership model.The Indian economy can increase its competitiveness and lower costs and emissions by developing short sea shipping. There are certain barriers to developing sea transport in India: competition from rail and road transport is high, lack of Active government policy, non availability of concessional shipping finance and others (see Appendix).

However, developing decentralized small scale LNG supply chains may circumvent these issues and provide flexible solutions to natural gas supply cases. LNG is moved by LNG carriers to Indian import terminals or Floating Storage Regasification Units (FSRU). Stationary or mobile FSRUs could constitute a focal distribution point for LNG in the region. Small-scale LNG vessels would have the function of transporting LNG to smaller satellite terminals from the main terminals and FSRUs. From a terminal, the LNG will be moved with standard semi-trailers to a local storage area at the customer’s site where it is finally vaporized and piped to the customer’s point-of-use (e.g. fertilizer production). These small LNG carriers may also benefit from Bunkering themselves with LNG.

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Source: PNGRB,petronet lng,planning comission report,newspaper,GGINL,IGU report,MPNOG

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