“Vision 2030” Natural Gas Infrastructure in India Report by Industry Group For Petroleum & Natural Gas Regulatory Board 1 Contents Acknowledgements ....................................................................................................................................... 5 Objective of the study and sub‐group participants ...................................................................................... 6 Disclaimer...................................................................................................................................................... 7 1 Executive Summary ............................................................................................................................... 8 2 Natural Gas – Demand/ Supply Dynamics .......................................................................................... 13 2.1 Present Demand Scenario ........................................................................................................... 13 2.2 Demand Projections .................................................................................................................... 15 2.2.1 Approach & Methodology................................................................................................... 17 2.2.2 Power Sector Demand ........................................................................................................ 18 2.2.3 Fertilizer Sector Demand .................................................................................................... 23 2.2.4 CGD Sector Demand ............................................................................................................ 25 2.2.5 Other Consumer Sectors’ Demand ..................................................................................... 27 2.2.6 Consolidated demand ......................................................................................................... 28 2.2.7 Regional distribution of demand ........................................................................................ 30 2.3 Present Supply Scenario .............................................................................................................. 33 2.4 Supply Projections ....................................................................................................................... 33 2.4.1 Approach & Methodology................................................................................................... 34 2.4.2 Domestic Production........................................................................................................... 35 2.4.3 Imports of LNG .................................................................................................................... 36 2.4.4 Gas Imports through Cross Border Pipelines ...................................................................... 38 2.4.5 Non Conventional Sources .................................................................................................. 38 2.4.6 Consolidated supply projections ......................................................................................... 40 2.5 Demand Supply Balance ............................................................................................................. 42 3 Natural Gas Infrastructure .................................................................................................................. 44 3.1 Present state of Infrastructure ................................................................................................... 44 3.2 Infrastructure Projection – Approach & Methodology ............................................................... 46 3.3 Pipeline Infrastructure – Development Plans ............................................................................. 47 3.4 Scope for further development .................................................................................................. 52 4 Gas Sector – Current status ................................................................................................................ 55 4.1 Present State in India .................................................................................................................. 55 2 4.2 International Examples ............................................................................................................... 57 4.2.1 USA ...................................................................................................................................... 57 4.2.2 UK ........................................................................................................................................ 59 4.2.3 Market evolution models .................................................................................................... 60 4.3 Focus areas for India ................................................................................................................... 61 4.3.1 Policy Issues ........................................................................................................................ 62 4.3.2 Regulatory Issues ................................................................................................................ 67 4.3.3 Indicative Action Plan .......................................................................................................... 72 FIGURES Figure 1 Demand Projection Methodology ...................................................................................... 17 Figure 2 Region wise gas based power generation capacity (%) ............................................. 19 Figure 3 Gas demand for power sector from 2012-13 to 2029-30 ............................................. 22 Figure 4 Gas demand from fertilizer sector: 2012-13 to 2029-30 ............................................... 24 Figure 5 Gas demand from CGD sector: 2012-13 to 2029-30 ..................................................... 26 Figure 6 Gas demand from other consuming sectors: 2012-13 to 2029-30 ............................ 27 Figure 7 Consolidated demand growth trajectory ......................................................................... 29 Figure 8 Consolidated Demand - Break up in 2012-13 and 2016-17 ......................................... 29 Figure 9 Consolidated Demand - Break up in 2021-22 and 2029-30 ........................................ 30 Figure 10 Regional markets in India ................................................................................................ 30 Figure 11 Regional contributions to demand ................................................................................ 32 Figure 12 Regional demand growth profiles ................................................................................. 32 Figure 13 Gas supply projection methodology .............................................................................. 34 Figure 14 Natural Gas Supply Growth Profile ............................................................................... 41 Figure 16 Existing gas transmission network in India ................................................................. 46 Figure 17: Gas infrastructure projection methodology ............................................................... 47 Figure 18 Gas transmission network in India at the end of 12th five year plan ..................... 50 Figure 19: Gas transmission network in India at the end of 13th five year plan .................... 51 Figure 20: Infrastructure addition linked to ICF’s NGG proposal and CBM Blocks ............. 52 Figure 21: Natural gas chain (India) .................................................................................................. 56 Figure 22 U.S. Natural Gas Pipeline Network, 2009 ...................................................................... 57 Figure 23 National Transmission System (UK) .............................................................................. 59 Figure 24 Major structural and market elements for an enabling environment .................... 61 Figure 25 Action plan for development ............................................................................................ 73 TABLES Table 1 Primary energy mix for India ................................................................................................ 13 Table 2 Sector wise natural gas consumption in India (January 2013) ................................... 14 Table 3 Regional gas markets in India ............................................................................................. 15 3 Table 4 Demand drivers for various end user segments ............................................................ 16 Table 5 SUMMARY OF INSTALLED CAPACITY AS ON 31.03.2012 .......................................... 18 Table 6 Gas Demand for Power Projects by End of 12th Plan (2016-17) ............................... 21 Table 7 Power Sector Gas Demand - 12th and 13th five year plan ............................................ 22 Table 8 Power Sector Gas Demand - 2023 to 2030 ...................................................................... 22 Table 9 Fertilizer Sector Gas Demand - 12th and 13th five year plan ........................................ 24 Table 10 Fertilizer Sector Gas Demand - 2023 to 2030 ............................................................... 24 Table 11 Total Realistic Demand - 12th and 13th five year plan ................................................. 28 Table 12 Total Realistic Demand - 2023 to 2030 ...........................................................................