Domestic Gas Scenario

Processing, Distribution &

Applications
A K Deb
Head Business Development &JV Group ONGC Offshore India Oil & Gas Summit
September 22nd , 2009 Petrofed Industry-Academia Workshop PLL LNG Terminal, Dahej October 19 , 2011 Hyatt Regency, Mumbai

Why Natural Gas ?

Lower GHG emissions Reduced Environment Footprints amongst energy sources

Natural Gas Lower GHG emissions

Source : North American Resource study 2011

Estimates of Environment Footprints of Energy sources

The Canvass
Global Energy Scenario
Gas Resources/reserves & Supply scenario

Domestic Gas Scenario Natural Gas(NG) sources & Processing

Associated & Free NG / Rich or Lean Gas
Coal Bed Methane gas Shale Gas

Application and End Users Characteristics of Indian NG market & Challenges

Geology of Natural Gas and nomenclature

Energy demand shift

In last 25 years World energy consumption increased by 75%
CAGR @ 2.4%; Asia Pacific: @ 5.3%; Europe & America: @0.3%(last 10 yrs)
4,500
4,000

2003:Asia-Pacific the largest energy consuming region

3,500 3,000

Million Tonnes

2,500 2,000

1,500 1,000

S&C America
500

Middle East Africa

Source: BP Statistical Review of World Energy-2011 & Energy e-track

The Resource Triangle

Increased pricing
Conventional Reservoirs: Small volumes that are easy to develop

Unconventional: Large volumes that are difficult to develop

Improved technology

Distribution of proved gas reserves

40.5

38.3

1990 Total 125.7 tcf

43.4

2000 Total 154.3 tcf

2010 Total 187.1 tcf

36.3

33.7

Gas Reserves to Production Ratio

Reserves to Production (R/P) Ratios
2010 by region For gas to reach from landlocked Eurasia, African offshore and Middle east to consumers, we require trans-national pipelines and movement of LNG by ships
160 120 80 40 North S & Central Europe & Middle Africa Asia Pacific America America Eurasia East World natural gas proved reserves in 2010 were sufficient to meet 58.6 years of global production, R/p ratios declined for each region, driven by rising production. The Middle East once again had the highest R/P ratio, while Middle East and Former Soviet Union regions jointly hold 72% of worlds gas reserves Source : BP statistical review 2011

Major Gas Trade movements

Major trade movements
Trade flows worldwide(bcm)

Natural Gas Trade

Natural gas trade grew by 10% in 2010 with Pipeline shipments growing by 5.4%, led by growth in Russia, Europe and Eurasia accounting for roughly two-thirds of global pipeline LNG trade. driven by strong growth (22.6%) in LNG shipments where exports were dominated by Middle East, Qatar thus catapulting LNG trade to 30.5% of global gas trade.

Energy supply investment pursued vigorously

5 4
tcm

NG Scenario 2030

100 %

80 % Fields yet to be developed

3
2 1 0 2007 2015 2020 2025 2030

60 % Currently producing fields Share from fields not yet producing(right axis)

40 %

20 %

0%

Sustained investment required to combat the decline in output at Additional capacity of 4 times current Russian capacity needed by 2030 to offsetexisting fields, which will & to meet increase in demand2030 decline at existing fields drop by almost two-thirds by
Source: IEA Nov10

Present Consumption 88 Million barrels of oil per Day

Expected Demand by 2030 ~ 110 mmbbls oil Or 235 Million barrels of oil equivalent per Day

Worlds DaiLy oil drum

(Drum Scale)

Source : IEA World Energy outlook 2011

Extra demand to be met from new sources of Supply

Russia
West Africa
Nigeria Angola

FSU countries Kazakistan & Turkmenistan - gas Deepwater New oil frontier Gulf of Mexico
Brazil offshore

Oil Sands

Primary Energy Basket : India Vs Global

Hydel Nuclear 6% 5% Coal 29% Gas 24% Oil 36%

Hydel Hydel Nuclear 2% Oil Nuclear 7% 2% 1% Oil 26%

32%

Coal 51%

Coal 51%

Gas 10%

Gas 20%

Estimated Energy Basket 2025

17 Source: BP Statistical Review 2008 Source : BP statistical review 2011

Gas consumption in India increased at a CAGR of >6% (Global: 2.6%), next only to China in Asia Pacific(13%) in last ten years

Gas markets in India

40

UK
Global Average 1100kg Germany

Share of Gas in fuel mix (%)

30

USA

20

2025 India 2015 Japan

Global Average 24%

10

India 2009
0 1000

China

Per Capita Energy Consumption kgoe

3000

5000

7000

8000

Indias per capita energy consumption (PCEC) in India (~ 410 kg oe) significantly below other leading economies (~1300 kg China & 7,800 kg USA) Integrated Energy Policy (IEP) expects the growth in PCEC to quadruple by 2030 but gas availability and prices to decide the manner in which share of gas moves in Energy Mix. 18

MeetingEnergy Scenario India: Energy Demand

For India, with ~16% of global population, with~ 0.5% of worlds known Hydrocarbon reserves &

~7 % of Coal reserve,
and 5.82% CAGR (last 10 years) in energy demand the situation is pretty Challenging for a

GDP Growth target of 7-9%

19

Domestic gas Production

FY 09 32.84 bcm

FY 11 52.22 bcm

Domestic Gas Production and Sectoral Supply

Power 66.4 mmscmd

NOCs production 57.3 mmscmd

LNG (Firm) ~ 47 mmscmd.

Ferilizers 37.74 mmscmd CGD + CNG 13.97 mmscmd

End-User
PMT & JV 15.26 mmscmd Total Gas Supply 159.6 mmscmd
Requirement

166.17* mmscmd

Petrochemicals 5.67 mmscmd

KG D6 40.0 mmscmd

Refineries 19.77 mmscmd

Sponge iron 7.01 mmscmd

New Discoveries & Transnational P/L

21 Source: Global Gas Outlook Aug 2011

Others 20.59 mmscmd

Domestic Gas Supply Demand Projections 2015-16

Based on latest DGH & Global Gas projections

350 300 250

200
MMSCMD

Shortfall of 80.0 mmscmd can be mitigated by Possible LNG terminal at Mundra, Ennore, PLL East cost Mangalore or a Trans national gas pipeline
186

356 Demand
80

Shortfall

276
90

Name plate LNG capacity 23.7

Demand

JVs CBM
GSPC KG

150 100 50 0 2010-11 2011-12P 2012-13 P 2013-14 P 2014-15P 2015-16P LNG 2016 Demand 2016-17

RIL KG NOC

LNG capacity (mmtpa) by 2016 are : Dahej 10.0, Kochi 5.0, Dabhol 5.0, Hazira 3.7
Source : DGH + Global gas + Crisil gas outlook

Significant growth in Power, Fertilizers, Industrial fuel, CGD, CNG in next 15 years
Power
366 GW 150 GW Hi capacity addn Thrust by GoI to set up clean fuel Power plants

Fertilizers
Nitrogeneous Fertilizer capacity 20 mtpa of N equivalent 12 Gas preferred feedstock GoI directive to convert to gas subsidy savings

Current 2025 Installed capacity

Current 2025 Installed capacity

Industrial fuel & feedstock

113 mtoe 41 mtoe Conversion from liquid fuels Industrial growth to fuel demand Gas share to increase

City Gas PNG & CNG

2025 Environmental regulations to drive growth GoI encouraging expansion

Current 2025 Installed capacity

Close Window

Uses of crude oil

Gas Inlet

Well Head to Gas Processing

Glycol Inlet
Residue

Natural Gas Well head to End user Birds eye view

Produced from Rajasthan block, this crude Natural gas produced in associated or free form is is a Group gathering station or first processed at the medium API, highly viscous having process platform before further processing at a gas abnormally high Pour Point (only 2 crudes processing plant to produce value added products have more pour point) AND with a very high residue

Gas Production Onshore

There can be two type of gas sources namely associated gas which comes dissolved with oil usually rich gas AND free gas which is derived from a an exclusive gas pay zone which may or may not be rich gas

Shale Gas

Gas Production
55 MMSCMD gas is produced from Bombay offshore at a water depth of 50-75 m where 40 MMSCMD gas produced from KG Basin at a water depth between 700 m to 1700 m

Today we have gone in ultra deep water(>5000 ft) with producers upto 10,000 ft and feasibility of laying pipelines beyond 15,000 ft water depth (proposed Oman-India gas pipeline)

Gas Shales
Shale gas is gas produced from organic rich shale rock with very low rock permeability and as such were uneconomic to develop due to very low production rates. However, horizontal drilling techniques combined with multi-stage hydraulic fracturing has helped to achieve economic rate
Common traits of gas shale reservoirs Abundant gas (up to 400 Bcf/m2) Large developments (economies of scale) Large and numerous hydraulic fracs Long well life (60-year reserves common)

US Gas supply augmented by Shale Gas 1990-2035

US Shale Gas Supply to meet highest potential demand

Natural Gas Prices

Potential Shale gas Basins in India

Shale gas efforts in India

ONGC in collaboration with Schlumberger has undertaken an integrated pilot project to drill 4 wells, 2 in Raniganj, West Bengal and 2 wells in North Karanpura-Jharkahand to find potential of Shale gas in Indian basins

First well proved presence of Shale gas on 25th January 2011

R&D efforts continuing

Shale Gas resource Estimations in India

Oil & Gas Processing Infrastructure

Bombay Offshore
Capacity Products : 42 MMSCMD Sour Gas :

Hazira, Gujarat
Capacity Products : 42 MMSCMD Sour Gas : Gas, LPG, Naphtha, SKO, HSD, ATF

Uran, Maharashtra
Capacity Products
Capacity Products

: 20 MMTPA Oil & 16 MMSCMD Gas :Oil, Gas, LPG, Naphtha,C2-C3

Ankleshwar and Gandhar, Gujarat

35

: 0.1 MMTPA Oil & 1 MMSCMD Gas : LPG, Naphtha

Bombay offshore Oil & Gas processing

N Hazira Gas processing plant

Vadodara Hazira

Umbhrat

Arabian Sea
Mukta

Tapti
36
42

Daman

Panna

Mumbai

Vasai

Gas Processing at Hazira

Acid Gas

Vent Gas

SRU GDU LPG DPD

Sulfur Gas to Consumers

Sour Gas

GSU

Slug Catcher

Gas to Local consumers

Sour Cond.

CFU

CWU

LPG
SKO

36 42 From Offshore

KRU

ARN

HSD

Hazira : Gas to Value Added Products

L P G
H S D

Expanding to enhanced VAPs

A R N
A T F

S K O

1. C2-C3 Recovery unit

Natural Gas

2. Gasoline + LPG SKO

HSD ATF

ARN / NGL
Heavy Cut Sulphur LPG

3. Propane Evacuation

MNW

U R URAN A N
Heera

Uran PROCESS
GAS TO CONSUMERS ACID GAS GAS SWEETENING UNIT SSV LEF C2C3 PLANT C2C3 TO LPG PLANT STORAGE

GAS

SLUG CATCHER CONDENSATE FRACTIONATING UNIT CSU OFFGAS COMPRESSOR

LPG TO STORAGE NAPHTHA TO STORAGE

CRUDE OIL TO STORAGE

Crude Oil

CRUDE STABILISATION UNIT

PRODUCED WATER TO ETP - MINAS

Bombay offshore Oil & Gas processing Infrastructure

WIN NQO NQP

BHN BHS
ICP
SHP

42 gas

IOC

Hazira
36gas

HBJ
KRIBHCO WRBC ESSAR
GRASIM

HWP RELIANCE GGCL

SHG

BPA
BPB

30 BUT oil 26 BUT gas Neelam

MGCC

Heera

24HUT oil 26HUT gas

HPCL R C F B P C L T E C

URAN
CSU LPG C2C3

RCF THAL MSEB DFPCL BEL

TROMBAY

JAWAHAR DEEP

42

Gas Transmission & End Uses

Natural Gas Pipeline Schematic

Increased gas supply to drive Pipeline Infrastructure

Existing ~ 8,000 km Future ~ 17,800 km
(Gail 6800 + RIL 1300 km) (Gail 11800+RIL-3000 + GSPC/AGCL-3000

Though major new pipelines plans for pan India connectivity are in place, their actual implementation depends on availability of gas supply.
Source: CRIS Analysis

Gas transmissions & End Users

Power Plant

CGD/PNG

Petrochemicals

To Conclude
Significant potential in growth of per capita energy with power, fertilizers, CGD(industrial) segments the main driver
Power and Fertilizers to continue to be major consumers accounting for 64% of the total demand by 2015 Price acceptability of Indian consumer at higher crude price linked to present fuel conversion price Difficult to maintain price protection & gas allocation as it may affect realization to the producer Gas Grid development essential to open new demand areas Indian consumer to afford higher energy price to satiate the shortfall in future

Questions, Thoughts?

48