1. Asia Energy Security Summit 2012
Pipelines: Policies, Regulations & Restrictions
Sudha Mahalingam, Colombo Feb 29-Mar 1, 2012

2. Salience of Natural Gas
 Gas as bridge fuel for this century
 Abundance, climate-friendly,
availability in the neighbourhood
 Longer pipelines, transcontinental
 LNG makes it fungible
 Asia-Pacific has 70% growth in LNG
Capacities
 Is LNG price getting globalised,
delinked from crude?

3. Primary Energy Mix
World India
renewa renewa
nuclear
nuclear bles hydro 1% bles
1%
hydro 5% 1% 5%
6%
gas
coal
11%
30%
gas
24% coal
52%
oil
30%
oil
34%

4. Natural Gas
 India’s consumption of natural gas has risen faster than
any other fuel in the recent years.
Current Sector-wise  Industries such as power generation, fertilizer and
consumption petrochemical production are shifting towards natural
gas and play a dominant role in creating demand for it.
others
10% % Share /
CGD CAGR
weights
6% 9.0%-
power 43% 9.189100%
Petroc power
21.37%
fertilizer 5% 30% 1.500000%
hemic 43% petrochemicals 13.60% 11% 1.496000%
als
11%
fertiliz Natural Gas demand CAGR 12.185100%
er
30%  Using the above Natural gas CAGR, we forecast the
demand 20 years hence. However, assuming that slowly
the CAGR with match the GDP of India, we use g=10%
Total demand 263 mmscmd
from 11th year and g=7% from 16th year.

5. Natural Gas Demand
Natural Gas Demand
450
387.819
400
Billion cubic meter
350
300
250
200
150
100
50
0
2020-21
2027-28
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2021-22
2022-23
2023-24
2024-25
2025-26
2026-27
2028-29
2029-30
Year
Since the only mode of transportation of Natural Gas on land is by
pipelines only, so by the year 2030, the Natural Gas pipeline capacity
will be 387.819 bcm =1062.5178 MMSCMD ≈ 1100 MMSCMD

6. Natural Gas: Future
Opportunities
 Import of gas through pipeline and in the form of LNG.
 Increase the capacity of import terminals for LNG to 26 million tonnes
per year from 13.7 million tonnes.
 LNG terminals in India:
Location Capacity (MMTPA) Status
Dahej 10 to 14 Existing with Augmentation
Hazira 2.5 to 5 Existing with Augmentation
Dhabol 5 Under construction
Kochi 5 Under construction
Mundra 6.5 Proposed
Ennore 5 Proposed
Pipavav - Proposed
Kakinada - Proposed
Paradip, Dhamra, Gopalpur - Proposed
Mangalore - Proposed
Jamnagar - Proposed

7. How do we incentivise
LNG?
 Asian sellers & Asian buyers –
Australia, Indonesia, PNG, Malaysia,
Iran, Qatar, Turkmenistan
 China, India, Taiwan, S.Korea
 Common user terminals?
 Regulated cost-plus tariffs?

8. Natural Gas: Future
Opportunities
Turkmenistan–Afghanistan–Pakistan–India (TAPI)
pipeline: 38mmscmd of Gas to India.
 Schlumberger, estimates an initial gas-in-place
300-2,100 trillion cubic feet (TCF) in Indian shale
gas basins in Damodar Valley. Reliance’s KG D6
field has proven reserves of just 7-8 TCF.
 India’s pipeline network needs expansion to get
the gas to market. Investment required: Rs 350
billion or US $7 billion

9. Journey to the Year 2030
 Natural Gas Pipelines
12000 Kms LENGTH 45000 Kms
300 mmscmd CAPACI 1100 mmscmd
TY
 Petroleum Product Pipelines
13000 Kms LENGTH 30000 Kms
74 MMT CAPACI 400 MMT
TY

10. How do we get there?
 Policy : 33% common carrier
 Tax breaks for common carrier
capacity

11. Regulations - PNGRB
 Authorisation – Trunk & CGD
 Tariff
 Common Carrier
 Access Code
 Affiliate Code
 TSSSS

12. Existing Pipelines
 HBJ + GREP -5340km
 Dahej-Uran-Dabhol – 744 km
 EWPL – 1385 km
 Dadri-Panipat -132 km
 Regional networks in
Mumbai, Gujarat, Cauvery Basin
Assam, Tripura etc
 Total length: 13170 km

13. Pipeline grid in India

14. Licences Issued prior to
PNGRB
 Chainsa-Jajjar-Hissar
 Dadri Bhawana Nangal
 Kochi-Bangalore-Mangalore
 Jagdishpur-Haldia
 Dabhol-Bangalore
 Kakinada-Howrah
 Kakinada-Vijayawada-Chennai
 Chennai-Tuticorin
 Chennai-Bangalore-Mangalore

15. Licenses issued by PNGRB
 Mallavaram-Bhopal-Bhilwada-2000
km
 Mehsana-Bhatinda -1600 km
 Bhatinda-Jammu-Srinagar -725 km
 Surat –Paradeep – 2000 km

16. Challenges
 Chicken or egg?
 State or Market? Viability gap
funding
 Disparities in tariff
 Stranded capacities – market risk?
 National Gas Management System
 Differing taxation precludes swaps?