1. NATURAL GAS
Presented By
Mihir Kaulgi 103
Pratibha Sharma 134

2. NATURAL GAS
Flow Of Presentation
• Introduction
• Manufacturing Process
• Consumption
• Production
– Reserves
• Trading Centers & Bourses
• Influencing Factors
• Contract Specifications (MCX-Futures)
• Future Outlook

3. NATURAL GAS
Typical Composition of Natural Gas
Methane CH4 70-90%
Ethane C2H6
0-20%Propane C3H8
Butane C4H10
Carbon Dioxide CO2 0-8%
Oxygen O2 0-0.2%
Nitrogen N2 0-5%
Hydrogen sulphide H2S 0-5%
Rare gases A, He, Ne, Xe trace
What is Natural Gas ?

4. NATURAL GAS
Manufacturing Process
Extracting
Processing
Transporting
Distributing
Quality Control

5. NATURAL GAS
Manufacturing Process

6. NATURAL GAS
Natural Gas Consumption ( 2006 - 2030)
0 5 10 15 20 25 30
USA
Russia
Canada
Mexico
Japan
Australia/New Zealand
South Korea
China
India
Other non-OECD Asia
Trillion Cubic feet
2006 2030
Consumption

7. NATURAL GAS
Production
World Natural Gas Production
0
5
10
15
20
25
30
35
USA
Canada
Mexico
Japan
Australia/
New
Russia
China
India
Other
Non-
Middle
East
Africa
Brazil
Other
Central&
TrillionCubicfeet
-1
0
1
2
3
4
5
6
7
%Change
2006 2030 Avg Annual % Change

8. NATURAL GAS
World Reserves

9. NATURAL GAS
Demand & Supply in India

10. NATURAL GAS
Region wise Production & Consumption

11. NATURAL GAS
Production

12. NATURAL GAS
Sector wise Demand

13. NATURAL GAS
Infrastructure in India

14. NATURAL GAS
Sr no.Pipeline Company Expected year of
completion
Length
(kms)
1 Dadri-Bawana-Nangal pipeline GAIL 2010-11 459
2
Chainsa-Gurgaon- Jhajj ar-Hissar
pipeline
GAIL 2011-12 449
3 Jagdishpur-Haldia pipeline GAIL 2012-13 2,050
4 Dabhol-Bengaluru pipeline GAIL 2012-13 1,370
5
Kochi-Kanjirkkod-
Bengaluru/Mangalore pipeline
GAIL 2012-13 1,110
6
Kakinada-Basudebpur-Howrah
gas pipeline
RGTIL 2012-13 1,100
7
Vijaywada-Nellore-Chennai
pipeline
RGTIL 2012-13 650
8 Chennai-Tuticorin pipeline RGTIL 2012-13 670
9
Chennai-Bengaluru-Mangalore
pipeline
RGTIL 2012-13 660
Source: CRISIL Research
Infrastructure in India

15. NATURAL GAS
Production by India
Gas type 2008-09 E 2013-14 P
Price Vol Price Vol
$/mmbtu % share $/mmbtu % share
APM 3.3 60% 4.8 18%
Pvt/JV 6.2 20% 6.0 64%
CBM 4.6 0% 5.7 5%
LNG - firm 5.2 20% 8.7 14%
Weighted average firm
supply
4.3 100% 6.2 100%
E: Estimate; P: Projected
Note
Firm gas supply is estimated at 93.2 mmscmd in 2008-09 and projected
at 215.2 mmscmd in 2013-14.
Source: CRISIL Research

16. NATURAL GAS
Production by India

17. NATURAL GAS
Trading Centers and Bourses
• New York Mercantile Exchange (NYMEX)
– Price is based on delivery at the Henry Hub in
Louisiana
• Natural Gas Exchange (NGX), Canada
• International Petroleum Exchange (IPE), UK
• Multi Commodity Exchange of India Ltd (MCX),
India
– World’s 2nd Largest exchange in terms of Natural Gas
futures contract (volume) traded
– Almost 25% of volume of NG, NYMEX

18. NATURAL GAS
Factors influencing Market Price
 Global Factors:
◦ OPEC output and supply
◦ Dollar fluctuation
◦ US Natural Gas Inventory data
◦ Geopolitics
◦ Global Demand particularly from emerging sectors
 Domestic Factors:
◦ NELP policy by GOI
◦ Demand from power and fertilizer sectors; the share is
expected to grow from the current level.
◦ The sponge iron sector will have a share of 54% (by
2012), up from about 40% now.
◦ The transport sector is another important sector, as
use of CNG is expected to grow many folds.

19. NATURAL GAS
Contract Specifications MCX Futures

20. NATURAL GAS
Contract Specifications MCX Futures

21. NATURAL GAS
Contract Specifications MCX Futures
Commodity
Symbol
Contract
Expiry
Unit PCP (Rs) Volume
(in Lots)
OI (in
Lots)
Natural Gas 25JAN2010 1 mmBtu 264.40 110 132
Natural Gas 28DEC2009 1 mmBtu 261.40 2897 645
Natural Gas 23NOV2009 1 mmBtu 244.30 46824 5186
Spot Price: Rs. 238.90 per mmBtuSpot Price: Rs. 238.90 per mmBtu

22. NATURAL GAS
Futures, NYMEX

23. NATURAL GAS
MCX - 28Dec2009 Futures Contract Price Movement

24. NATURAL GAS
Future Outlook
 At MCX, the futures of the further months are trading at a premium
compared to the earlier month’s futures (FUTOCT<FUTNOV<FUTDEC)
 Storage Congestions predicted to see a fall in the price in the Global
market
 Oil prices predicted to be bullish and expected to touch the $100 per
barrel mark, with more bearish outlook for the Natural Gas
 Industrial demand is expected to pick up. Still in the global space,
supply is more than the demand
 In India, the KG basin reserve find is expected to be much more than
estimated and hence reducing the price, alongwith the import bill on
Natural Gas.
 Demand for LNG is high in the LNG importing countries like India,
China.

25. NATURAL GAS
Future Outlook
Titan……..Moon of Saturn has seas made of Pure
LNG !