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Overview of Petroleum & Natural Gas Sector & Regulatory Perspective in India. Top Primary Energy Consuming Countries 2005. Total World Energy Consumption: 10537 mtoe. 5 th largest energy consumer (Share 3.7% of global energy) Per capita energy consumption - about one third of world average

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top primary energy consuming countries 2005
Top Primary Energy Consuming Countries 2005

Total World Energy Consumption: 10537 mtoe

  • 5th largest energy consumer (Share 3.7% of global energy)
  • Per capita energy consumption - about one third of world average
  • Energy consumption projection(2031-32)
    • to grow at 5 % CAGR (8% GDP growth) as per Integrated Energy Policy
    • 3.4% CAGR upto 2025 (GDP: 5%)
  • Energy import dependence is 30% (26% on account of oil & 4% for Coal + Power) and is likely to climb to 40-45% by 2025
  • Oil import dependence is around 72% currently. Likely to go upto 90% level

Fig. in MTOE

Per-capita Energy Consumption

Source – Energy Information Administration (EIA)

primary commercial energy mix
Primary Commercial Energy Mix

World

World

2003

2030

10517 mtoe

18040 mtoe

CAGR: 2%

  • Oil & Gas continue to play major role

India

India

2003-04

2031-32

327 mtoe

1651 mtoe

CAGR: 6.2%

Coal & Oil continue to play major role; Gas is emerging

Source – World: EIA-2006; India: IEP 2006

pol imports exports
POL - Imports & Exports

Crude Oil

Import

US$ Billion

  • Gross crude and petroleum products
    • Crude/product Imports : ~ 28% of total imports
    • Product Exports : ~ 8% of total exports

Product

Export

Product

Import

India - A Net Exporter of Products

refineries product pipelines
Refineries & Product Pipelines

Refining

Refining Capacity: 178 MMT

Product Pipelines

Product Pipelines Length: 12017 KM

Capacity: 68.17 MMT

Capacity Utilisation: 77%

refineries in india 1 4 08
Refineries in India(1.4.08)

Bhatinda

(9.0)

Existing

Ongoing/Planned

Panipat

(6.0), (9.0)

Digboi

(0.7)

Bongaigaon

(2.4)

Mathura

(8.0)

Numaligarh

(3.0)

Guwahati

(1.0)

Barauni

(6.0)

BINA

(6.0)

Baroda

(13.7)

Haldia

(6.0), (1.5)

Jamnagar

(33.0, 29.0,10.5

Paradip

(15.0)

Mumbai

(5.5)

(2.4)

Visakh

(7.5, 7.5)

(12)

Nos MMTPA

IndianOil 10 60.2

BPC 3 22.5

HPC 2 13.0

ONGC / MRPL 2 9.8

Reliance (Pvt.) 2 62.0

Essar(Pvt.) 1 10.5

Total 20 178.0

Tatipaka

(0.1, 0.1)

Mangalore

(9.7, 5.3)

Chennai

(9.5, 1.7)

Cochin

(7.5, 2.0)

Narimanam

(1.0)

Expected Refining Capacity by 2011-12: 200-235 MMTPA

india s product demand refining capacity
India’s product demand & refining capacity

Gap between Refining Capacity & Demand

142

68

21

Surplus refining capacity is expected to increase further by 2030

Source: XI Plan Demand

India will continue to be product surplus

Import/Export requirement for crude/products to be quite substantial

slide9

Petroleum Products Pipelines in India

Jalandhar

Ambala

Bhatinda

Roorkee

Sangrur

Najibabad

Panipat

Meerut

Tinsukia

Nahorkatiya

Delhi

Rewari

Loni

Shahjahanpur

Sanganer

Mathura

Bongaigaon

Siliguri

Digboi

Ajmer

Jodhpur

Tundla

Numaligarh

Chaksu

Lucknow

Kanpur

Guwahati

Jagdishpur

Kot

Chittaurgarh

Barauni

Sidhpur

Ahmedabad

Rajbandh

Kandla

Ratlam

Navagam

BudgeBudge

Mundra

Jamnagar

Maurigram

Koyali

Indore

Vadinar

Ankleshwar

Dahej

Haldia

Hazira

Manmad

Mumbai

High

Paradip

Mumbai

Vizag

Pune

Existing

Secunderabad

Uran

Product

Crude Oil

Pakni

Hazarwadi

Vijayawada

Products

9893 KM; 64 MMTPA

LPG

2124 KM; 4.5 MMTPA

Capacity Utilization

Prods. - 78%; LPG - 62%

Mangalore

Bangalore

On-going

Chennai

Product

Crude Oil

Sankari

Asanur

Karur

Existing

Coimbatore

Trichy

Kochi

LPG

Madurai

slide12

Gas Pipelines

in India

  • Length- ~ 11000 kms
  • Gas Consumption- 39 bcm
  • LNG Import - 8-9 MMT, 1 mmtpa spot)
  • Players- GAIL, GSPCL,
  • GGCL, RGTIL
  • Pipeline length is likely to double in next 4-5 years

Total infrastructure inadequate to meet the country’s requirements

government of india policies
Government of India Policies
  • Administered Pricing Mechanism (APM) dismantling effective 1.4.2002
  • Gas Pricing
  • NELP
  • Policy on Refining
  • Auto Fuel Policy
  • Policy on Marketing of Petroleum Products
  • Gas Pipeline Policy
  • Petroleum Product Pipeline Policy
  • FDI Policy
apm dismantling key decisions

Key Decisions Taken on APM dismantling

APM Dismantling – Key decisions
  • Crude oil producers/Refineries to be paid on import parity basis from Apr’02
  • Market determined prices for all products except LPG & Kerosene from Apr’02
  • Subsidies for LPG/Kerosene from fiscal budget on flat rate basis since Apr’02. Free float thereafter
gas pricing july 2005 govt order

Key Decisions Taken on APM dismantling

Gas Pricing – July 2005 Govt. order
  • Consumer price of APM gas increased from Rs. 2,050/mscm to Rs. 3,200/mscm linked to calorific value of 10,000 kcal/scm pending Tariff Comm. recommendations
  • All APM gas to be supplied to only power & fertiliser sector consumers against existing allocation as well as for specific end consumers under court orders/small consumers having allocation upto 0.05 mmscmd
  • Rest of consumers to be supplied at market related price
  • APM gas price for other than power & fertiliser sectors further increased from Rs 3,200/mscm to Rs 3,840/mscm wef June 2006
  • As against APM gas price of around $ 1.8/mmbtu, free market gas price varies e.g., RLNG @ $ 3.86/mmbtu, PMT gas @ $ 4.75/mmbtu, spot LNG purchases @ $ 7-8/mmbtu, etc.
new exploration licensing policy nelp
New Exploration & Licensing Policy (NELP)
  • NELP introduced in 1999; so far VIII rounds held
  • Internationally competitive fiscal regime
  • Transparent Process, International competitive bidding
  • Contractual Fiscal Stability
  • Excellent Tax Incentives
  • Special deepwater concessions
  • Freedom to market production domestically
policy on refining
Policy on Refining
  • Administered Pricing Mechanism (APM) dismantled for refineries in April 1998
  • Setting up of refineries de-licensed in June 1998
  • Refineries may be set up subject to meeting statutory requirements
  • Private refineries by RIL and Essar set up in India
  • Others JV refineries are under implementation
auto fuel policy road map for fuel quality improvement in india
Auto Fuel Policy - Road map for Fuel Quality improvement in India

Sulphur content in ppm (max)

FuelBS-IIBS-III/Euro-IIIBS-IV/Euro-IV

Petrol 500 150 50

Diesel 500 350 50

Source: Auto Fuel Policy, GoI

policy on marketing of petroleum products
Policy on Marketing of Petroleum Products
  • Marketing of petroleum products except subsidized products allowed to private companies
  • Marketing of Transportation Fuels authorised:
    • Subject to entities making investment or proposing to invest Rs. 20 billion in exploration / refining / pipelines / terminals /infrastructure etc.
fdi policy
Exploration

Up to 100% FDI: Automatic route through Competitive bidding

Refining

Up to 100% FDI

Up to 49% FDI: if project taken up along with Public Sector Undertakings

Marketing

Up to 100% FDI permitted in petroleum products marketing

Petroleum Pipelines

Up to 100% FDI: Under automatic route

Natural Gas Pipelines

Up to 100% FDI: Under automatic route

FDI Policy
pngrb act 2006
PNGRB Act, 2006
  • Enacted by Parliament in March’06
  • All provisions (except Section 16) of the Act notified w.e.f. 1.10.2007
  • PNGRB formally established w.e.f. 1.10.2007
  • One Chairperson and four full time Members
  • Basic Objectives –
    • To protect the interest of consumers and entities
    • To ensure uninterrupted and adequate supply in all parts of the country
    • To provide level playing field
    • To promote competitive markets
slide29

Authorisation for CGD Networks

Bidding Criteria - (weightage)

- Least PV of overall unit network tariff over economic life of project - (40%)

- Least PV of compression charge for CNG over economic life of project - (10%)

- Highest PV of “inch-kilometer” of steel pipeline during exclusivity period - (20%)

- Highest PV of PNG domestic connections during exclusivity period - (30%)

exclusivity criteria for cgd networks
Exclusivity Criteria for CGD Networks
  • Two periods of exclusivity provided to promote flow of investments –
    • Exclusivity of infrastructure over its economic life of 25 years
    • Marketing exclusivity of 5 years after which 3rd party access to the network for marketing of natural gas would be available on payment of network tariff
  • Network Tariff to be generally decided on bid basis
slide31

Authorisation for Natural Gas Pipelines

Bidding Criteria - (weightage)

- LeastPV of unit tariff for 1st tariff zone over economic life of project - (40% & 70% for pipelines < 300 KM)

- Least percentage increase for determining incremental tariff for 2nd tariff zone - (20%; nil for pipelines < 300 KM & 30% for pipelines > 300 KM < 600 KM)

- Least percentage increase for determining incremental tariff for 3rd and subsequent tariff zones - (10% & nil for pipelines < 600 KM)

- Highest PV of natural gas volumes - (30%)

slide32

Process for Grant of Authorization

15 days

15 days

30 days

60 days (extendable by 30 days)

30 days

90 days

30 days

city gas and cng
City Gas and CNG

Present Scenario

Total Number of CNG vehicles - 7 lakh

Number of entities - 19

Number of GAs - 25

Future Scenario (next three years)

Total Number of GAs - 86

Expected CNG vehicles - 25 lakh

Future Scenario (next five years)

Number of GAs - 125

Expected CNG vehicles - 33 lakh

Future Scenario (next ten years)

Number of GAs - 250

Expected CNG vehicles - 58 lakh

pngrb major tasks on hand
PNGRB - Major Tasks on Hand

Notification of Regulations

Declaring/Authorizing petroleum products & natural gas pipelines and city gas distribution networks on common carrier basis

Specifying market service and retail service obligations to protect consumers’ interests

Fostering Fair Trade and Competition

Laying down Standards and Safety Norms