3rd indaiafrica hydrocarbon conference
TRANSCRIPT
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December 9 -10, 2011
New Delhi
3rd India – Africa
Hydrocarbons conference
Knowlegde Associate
Ministry of Petroleum & Natural Gas
Government of India
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Foreword
One of the most-often quoted stories of the 21st century is the emergence of India and China on the global
economy landscape. These emerging economies have provided much required calmness amidst global
economic turbulence. However the flip side of the story is their growing appetite for energy and
commodities. This increase in energy consumption - a key driver of growth – in these countries, has added
volumes to already stretched global energy demand. So much so that the centre of energy demand is
shifting from the OECD countries to Asia.
India, the 4th largest economy in the world, is also home to one-sixth of global population. At this pace of
growth in the economy (8.5 per cent in 2010-11) and subsequent increase in purchasing power, the energy
needs of a vast population and growing industry can be quite demanding for policy-makers. The primary
energy consumption of India, which is 4.4 per cent of global consumption in 2010, was hardly 1.55 per cent
of global consumption in 1980, a not so distant past in the historical perspective.
As we all know, fossil fuels are a depleting resource. To run the wheels of economy, nations and large
energy companies of the world are in a constant search for another longstanding and reliable source of fuel.
In the current scenario, Africa provides the much required comfort with its vast hydrocarbon resource and
potential.
Africa, where oil was first discovered in the 1950s in Nigeria, is a relatively new phenomenon on the oil and
gas world map. The continent’s vast landmass and geological similarity with other oil-producing regions or
continents of the world are optimists’ delight and has attracted the top companies of the world. The regional
diversity of oil-producers within this continent and discoveries at regular intervals has given hope of more
potential. The newer prospects have further fuelled expectations that there may be more under- or
unexplored regions within Africa.
Currently Africa produces 12.2 per cent of global oil quantum, while it has a relatively lower share in globaloil reserves at 9.5 per cent. This indicates increasing dependence of global economy on African oil and gas.
India’s trade and human ties with Africa have a long standing history. It can be blithely stated that the
groundwork was already done by earlier generations of both regions. We just need to strengthen it, in view
of our contemporary needs and respective competencies, with more interaction and collaboration. In an era
of global interdependence, India and Africa are best placed geographically to take necessary advantage
from each other and take current ties to newer heights.
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Contents
List of Charts 4
List of tables 7
India 8
Basic information 8
Overview of energy sector 8
Oil sector 9
Natural gas sector 12
City gas distribution in India: An overview 18
Exploration and production 21Licensing regime 22
Shale Gas 24
Coal Bed Methane (CBM) 25
E&P Ventures by Indian Companies in Africa 26
Refinery sector 27
Import and export of petroleum and oil products 29
Pipelines in India 30
Sector organization 34
Policy and regulatory overview 35
Petroleum, Chemical Petrochemical
Investment Region (PCPIR) 39
Coal gasification in India 41
Africa hydrocarbon sector 45
Oil 46
Exploration & Licensing rounds in Africa 50
Refineries 53
Natural gas 54
Country Profile
Algeria 57Angola 63
Benin 68
Cameroon 70
Chad 73
Democratic Republic of Congo 75
Republic of Congo 79
Cote D' Ivoire 83
Egypt 86
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Equatorial Guinea 90
Ethiopia 94
Gabon 98
Ghana 102
Kenya 105
Liberia 109
Libya 113
Malawi 119
Mauritius 120
Mozambique 122
Namibia 126
Niger 129
Nigeria 132
Senegal 139
Sierra Leone 144
South Africa 146
Republic of South Sudan 151
Sudan 155
Tanzania 158
Uganda 161
Appendix 164
Glossary 164
Conversion Table 169
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List of Charts
Indian Primary Energy Mix (2010) 9
Balance Recoverable Oil Reserves, Production and Consumption 10
India - Ultimate Oil Reserves (MMT) 10
Share of India Oil Production by Companies (2010-11) 11
India - Oil Supply Projections XII plan (2012-17) 12
Share of India Gas Production by Companies (2010-11) 13
India - Gas Demand Estimate (2012-17) 14
Recoverable Gas Reserve, Production and Consumption 14
India - Ultimate Gas Reserves (BCM) 15
India - Gas Supply Projections XII plan (2012-17) 15
Status of Exploration in the Indian sedimentary basins in 2010-11 21
Acreage Portfolio of the Indian sedimentary basins 21
Blocks Awarded under NELP I - NELP VIII Rounds in India 22
Acreage Portfolio under License (NELP I – VIII) in India 23
Acreage Portfolio Awarded in NELP VIII Round in India 24
Refining Throughput of Major Players in India 27
India - Current Refining Capacity (MMtpa) and Companies
Share in Refining Capacity (%) in 2010 28
Net Product Export in India (Thousand metric ton) 29
World Energy Consumption (Mtoe) 45
World Primary Energy Supply (Mtoe) 46
World Proven Oil Reserves (2010) 47
Africa Oil Reserves (1995-2010) 47
World Oil Production (2010) 48
Africa Oil Production (1995-2010) 48
World Oil Consumption (2010) 49
Africa Oil Consumption (1995-2010) 49
World Refining Capacity (2010) 53
Africa Primary Refining Capacity (2010) 53
World Natural Gas Reserves (2010) 54
Africa Natural Gas Reserves (1995-2010) 54
World Gas Production (2010) 55
Africa Natural Gas Production (1995-2010) 55
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World Gas Consumption (2010) 56
Algeria - Oil Reserves, Consumption and Production 58
Algeria - Gas Reserves, Production and Consumption 59
Algeria - Natural Gas International Trade in 2010 (in billion cubic metres) 61
Angola - Oil Reserves, Production and Consumption 64
Angola - Gas Reserves, Production and Consumption 66
Benin - Oil Reserves and Consumption 69
Cameroon - Oil Reserves, Production and Consumption Global 71
Cameroon - Gas Reserves, Production and
Consumption (Y-axis right hand side scale unit) 72
Chad - Oil Reserves and Production 74
Democratic Republic of Congo - Oil Reserves, Production and Consumption 76
Democratic Republic of Congo - Gas Reserves, Production and Consumption 76
Republic of Congo - Oil Reserves, Production and Consumption 80
Republic of Congo -Gas Reserves, Production and Consumption 81
CṌTE D' IVOIRE - Oil Reserves, Production and Consumption 84
CṌTE D' IVOIRE - Gas Reserves, Production and Consumption 85
Egypt - Oil Reserves, Production and Consumption 87
Egypt - Gas Reserves, Production and Consumption 89
Equatorial Guinea - Oil Reserves and Production 91
Equatorial Guinea - Gas Reserves 92
Ethiopia - Oil Reserves, Production and Consumption 95
Gabon - Oil Reserves, Production and Consumption 99
Gabon - Gas Reserves, Production and Consumption 100
Ghana - Oil Reserves, Production and Consumption 103
Ghana - Oil Production and Consumption (Forecast) 103
Kenya - Oil Consumption 107
Liberia - Consumption of Petroleum Products 110
Libya - Oil Reserves, Production and Consumption 114
Libya - Gas Reserves, Production and Consumption 115
Mozambique - Oil Consumption 123
Mozambique - Gas Reserves, Production and Consumption 123
Niger - Oil Consumption 130
Niger - Petroleum Products Consumption Breakup – 2010 131
Nigeria - Oil Reserves, Production and Consumption 133
Nigeria - Gas Reserves, Production and Consumption 134
Senegal - Oil Reserves, Production and Consumption 140
Senegal - Gas Reserves, Production and Consumption 140
South Africa - Oil Reserves, Production and Consumption 147
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South Africa - Gas Reserves, Production and Consumption 147
Sudan - Oil Reserves, Production and Consumption 156
Tanzania - Oil Consumption, Imports 158
Tanzania - Gas Reserves, Production and Consumption 159
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India
Basic information
Population: 1,189,172,906 (July 2011 est.)
Currency: Indian Rupee ( ` or INR)
Exchange rate: 1US$ = ` 45.798 (Quarterly avg, July-September 2011)
GDP (PPP): US$ 4.06 trillion (2010 est.)
GDP-real growth rate: 8.5 per cent (2010-11)
GDP-per capita: US$ 3,500 (2010 est.)
Head of State: H.E. Smt. Pratibha Devisingh Patil, President (since 25 July, 2007)
Head of Government: Dr. Manmohan Singh, Prime Minister (since 22 May, 2004)
Overview of energy sector
India, the world's largest democracy, is the fourth largest economy in terms of Gross Domestic Product(GDP) in Purchasing Power Parity (PPP) terms after USA, China and Japan. Strong average GDP growthrate of 8.2 per cent in first four year of XI five year plan (2007-11) and initially projected 9.0 per cent in 2011(now expected about 8.0 per cent) have resulted in a surging demand for energy and hydrocarbon sources.Since 2010 India is the fourth largest primary energy consumer, after China, USA and Russia. Total primaryenergy consumption in 2010 was 524.2 million ton oil equivalent (MMtoe) or 4.37 per cent of total globalprimary energy consumption. . The energy demand has been increasing at a compounded annual average
growth of 6.5 per cent during the last five years and at 9.2 per cent in 2010 over the previous year.In 2010, oil and gas accounted for over 40 per cent of India's total primary energy consumption, next only tocoal, which accounts for ~53 per cent.
Total Primary Energy and Oil Consumption of Top five countries in Mmtoe (2010)
CountryPrimary EnergyConsumption
OilConsumption
As per cen t of World Pr imaryEnergy
China 2432.3 428.6 20.3
US 2285.7 850.0 19.0
Russia Federation 690.9 147.6 5.8
India 524.2 155.5 4.4
Japan 500.9 201.6 4.2
Source: BP Statistical Review, 2011
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Indian Primary Energy Mix (2010)
Source: BP Statistical Review 2011
With one-sixth of the world population, India's per capita energy consumption was 585 kilograms of oil
equivalent (kgoe) in 2009, significantly lower than the global average of 1,839 kgoe. As per Planning
Commission of India, the primary commercial energy requirement would reach to 738.07 Mtoe by 2016-17
of which approximately 38 per cent would be met through imports. With expected growth rate of more than
8% in the near future, India's per capita energy consumption is expected to more than double to about
1,124 kgoe by 2031-32, however it will still continue to be significantly lower than the 2009 world average of
1,797 kgoe.
Per Capita Energy Consumpt ion (kgoe) – 2007-2009
Select Count ries 2007 2008 2009
United States 7,748 7,503 7,034
Russian Federation 4,733 4,838 4,559
Japan 4,033 3,883 3,707
United Kingdom 3,444 3,395 3,184
China 1,489 1,598 1,698
Brazil 1,240 1,298 1,240
India 529 545 585
World 1,821 1,839 1,797
Source: IEA Key World Statistics 2011
Oil sector
As reported by BP Statistical Review 2011, at 9.04 billion barrels of oil equivalent (boe), India's proven
balance recoverable oil reserves are a meager 0.65 per cent of total world's reserve placing India at 19thposition in the world. More than 50 per cent of India's proven oil reserves are located in the western
offshore Mumbai High and in the onshore northeast of the country. Substantial undeveloped reserves are
located in the offshore Bay of Bengal Krishna Godavari basin and in onshore Rajasthan.
30%
10%
53%
1%5%
Renewables1%
Oil
Natural Gas
Coal
Nuclear Energy
Hydro electricity
Renew- ables
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Balance recoverable oil reserves (Left axis), production and consumption (Right axis)
Source: BP Statistical Review 2011
With Reserves to Production (R/P) ratio of 30 years, India's existing domestic production of about 826,000
barrels of oil per day (bopd) is only about 25% of its current consumption of 3,319,000 bopd, creating a
wide gap to be met through imports. As a result, the volume of crude oil imports has been increasing
steadily in India nearing about 75 per cent of its total crude requirement in 2010.
According to DGH, the ultimate oil recoverable reserves i.e. total oil recoverable reserves is as per the chartgiven below.
Ultimate Oil Reserves (MMT)
Source: Directorate General of Hydrocarbons, India
Crude oil is one of the significant commodities in the import bill. As per Directorate General of Commercial
Intelligence and Statistics, India (DGCI&S), crude oil and refined products made up over 28 per cent of
India's import of principal commodities in 2010-11 resulting in India’s outflow for importing these
commodities to about US$103 bn in 2010-11, compared to US$ 86 bn in 2009-10, an increase of about 20
per cent. However, in terms of quantity, India imported 24% less crude oil and refined products in 2010-11
over the previous year, i.e. 173.53 million tons in 2010-11 versus 177.85 million tons in 2009-10. According
to the Petroleum Planning & Analysis Cell (PPAC), during first six months of the current financial year
(March – Sept, 2011), India imported 84.13 million tons of crude oil and 7.92 million tons of refined products
while during the same period India exported about 31.19 million tons of refined products.
0
500
1,000
1,500
2,000
2,500
3,000
3,500
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2005 2006 2007 2008 2009 2010
P r o d u c t i o n & C o s n u m p t
i o n ( ' 0 0 0 B P D )
O i l r e s e r v e s ( m i l l i o n b a r r e l s )
Oil Reserves Oil Production Oil Consumption
16461688
1544
1000
1100
1200
1300
1400
1500
1600
1700
2008 2009 2010
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The gap between crude oil requirement and domestic production is expected to widen further as a result of
India's forecast GDP growth rate of 9 per cent per annum over the next five years as per the draft approach
paper on the XII five year plan (2012-17). As per assumptions made by the Working group on energy sector
for the Twelfth Plan, the country requires energy supply to grow by 6.5 per cent to maintain the growth rate
of 9 per cent over the next five years. It is projected that the oil and gas requirement by the terminal year of
the XII plan would reach 204.80 Mtoe and 87.22 Mtoe respectively. This demand for oil and gas would be
fulfilled by import of 164.8 Mtoe (or 80.5%) crude oil and 24.8 Mtoe (28.4%) natural gas in 2016-17.
During the XII plan, import dependence on crude oil is expected to increase from 76 per cent in 2010-11 to80 per cent in 2016-17, and for natural gas it is projected to increase from 19 per cent in 2010-11 to 28.4
per cent in 2016-17 (end of the Twelfth Plan).
In addition to importing greater quantities of crude oil, the Government of India has increased its focus on
enhancing reserves and production through increased domestic exploration activity as well as securing
equity oil overseas. Besides, upstream companies are emphasising on secondary and tertiary recovery of
hydrocarbons from the fields where production is in significant decline.
Domestic oil production is currently dominated by the state-owned exploration companies ONGC and OIL,
which together accounted for ~ 74 per cent of India's crude oil production in 2010-11. Crude oil production
has increased by 12.5% to 37.68 MMT in 2010-11 from 33.50 MMT in 2009-10 due to contribution of over 6
MMT from Barmer, Rajsthan and KG Basin.
Share of India Oil Production by Companies (2010-11)
Source: Ministry of Petroleum and Natural Gas, Government of India (Economic Editors’ Conference Report, October 2011)
It is expected that in near future, production from Cairn India’s Rajasthan fields is set to increase, as they
are yet to realize the full potential.In addition, ONGC and OIL India are already working on increasing
production through Enhanced Oil recovery (EOR) in their respective fields.
64.8%
9.5%
25.7%
ONGC
OIL
Pvt / JV Companies
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Oil supply projections XII plan (2012-17)
Source: Ministry of Petroleum and Natural Gas, Government of India
The contribution of crude oil production by the NOCs, ONGC and OIL, is expected to be about 68 per cent
in 2012 while the balance 32 per cent is to come from private sector and JV companies. In the terminal year
of the XII plan (2016-17) oil production from NOCs is expected to rise to 72 per cent with the remaining 28
per cent be contributed by private sector and JV companies
Natural gas sector
According to BP Statistical Review 2011, natural gas is currently approximately 10 per cent of India's total
primary energy basket, which is well below the world average of 23.8 per cent in 2010. India's proven gasreserves currently stand at 1.45 trillion cubic meters, which are 0.77 per cent of the world's total proven gas
reserves. This ranks India at 22nd in the world in terms of proven gas reserves. At existing production levels
of 50.9 bcm per year, the country has a Gas R/P ratio of about 28.5 years.
Gas production and supply
At present, gas supply is approximately 140 MMscmd against an estimated demand of approximately 262
MMscmd in 2010 (and 279 MMscmd in 2011 as per XI five year plan). India meets three-fourth of its current
gas consumption from its own production with the balance being fed by Liquefied Natural Gas (LNG)
imports. In 2010, India imported 12.15 bcm (33.3 MMscmd) of LNG, mainly from Qatar and small quantities
from Trinidad & Tobago, Nigeria, Yemen, Egypt and Equatorial Guinea.
0
5
10
15
20
25
30
2012-13 2013-14 2014-15 2015-16 2016-17
M M T P A
ONGC OIL Pvt./JV
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Share of India Gas Production by Companies (2010-11)
Source: Ministry of Petroleum and Natural Gas, Government of India (Report: Economic Editors’ Conference, October 2011)
The bulk of domestic gas production is by the state-owned companies, ONGC and OIL, which currently
contribute ~49 per cent of production volumes. The balance share of gas production is from private/JVcompanies. RIL from KG Offshore and consortium of BG-RIL-ONGC from Mumbai Offshore were the
largest contributors to the country’s gas production volumes after NOCs during year 2010-11.
The production from Reliance KG D-6 field has commenced with producting at around 50 MMSCMD it
accounts for ~36 per cent of India’s natural gas production. The gas production is expected to increase
further as RIL has formed a JV with BP for technological assistance across the gas value chain in India.
Existing sources of gas supply
Supply Sources (MMscmd) FY2010
Domestic Supply
ONGC 63.3
OIL 7.0
Pvt/JV 73.4
LNG Imports
Petronet LNG
- Long term supply
(From RasGas)26.25
- Spot / short term (for Dahej)
4
- Spot / short term (for Kochi)
Spot / short term by Shell Hazira 5
Spot / term by RGPPL -
Grand Total 179.3
Source: Ministry of Petroleum and Natural Gas, Government of India (Economic Editors’ Conference Report, October2011)/ Infraline
Gas consumption
As per the projections made in ‘Report of Working Group on Petroleum and Natural Gas for XII Plan’, power
and fertilizer sectors are expected to remain the major consumers of natural gas in India. Gas consumption
44.2%
4.5%
51.3%
ONGC
OIL
Pvt / JV Companies
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is expected to increase significantly in the future, as all the sectors are expected to witness healthy growth.
For instance, in CGD alone, PNGRB has plans to expand to about 300 cities overall in India, which may
require 100-120 mmscmd gas, estimated to be ~20-24% of the total gas demand estimates of ~473
mmscmd in 2016-17 as per the 12th plan.
Gas Demand Estimate (2012-17)
Source: Ministry of Petroleum and Natural Gas, Government of India (12th Plan Working Group Report)
According to the BP Statistical review 2011, natural gas reserves reached 1.45 tcm in 2010 and gas
production and consumption reached 62 bcm and 50.8 bcm respectively. It is observed that the gas
production increased by 29 per cent in last two years while gas consumption increased by over 22 per cent.
Recoverable gas reserve (Left axis), production and consumption (Right axis)
Source: BP Statistical Review 2011
According to DGH, the ultimate gas recoverable reserves i.e. total gas recoverable reserves is as per the
chart given below.
194
293
371
405
446473
0
50
100
150
200
250
300
350
400
450
500
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
G a s d e m a n d e s t i m a t e ( M M S C M D )
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
0
200
400
600
800
1,000
1,200
1,400
1,600
2005 2006 2007 2008 2009 2010
P r o d u c t i o n & C o s n u m p t i o n ( M c m )
R e s e r v e s ( B c m )
Gas reserves Gas Production Gas Consumption
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Ultimate Gas Reserves (BCM)
Source: Directorate General of Hydrocarbons, India
Gas supply projections XII plan (2012-17)
Source: Ministry of Petroleum and Natural Gas, Government of India (Report of the Working Group on Petroleum & Natural Gas
Sector- 12th Plan)
It is expected that the contribution of natural gas production by ONGC and OIL, the NOCs would reduce
from 54 per cent in 2012 to 51 per cent by end of XII plan (2016-17) despite growth in ONGC production.
This is due to fact that the balance production coming from private sector and JV companies is growing at
higher rate. As per the XII plan demand-supply estimates, it is concluded that over 50% of the natural gas
requirement would be met through imports in 2016-17.
The table below gives the estimates of LNG imports as per the current and ongoing LNG terminals. With a
slew of LNG terminals in planning stage, by various companies in India, the actual status may be quite
different from current forecasts.
17631713
2160
1000
1200
1400
1600
1800
2000
2200
2008 2009 2010
0
20
40
60
80
100
120
2012-13 2013-14 2014-15 2015-16 2016-17
M M s c m
d
ONGC OIL Pvt./JV
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LNG import projections during XII Plan
LNG Import Projections (MMscmd) FY2012f FY2013f FY2014f FY2015f FY2116f
LNLNGLNG Terminal terminalGImports
Dahej 35.0 43.8 43.8 52.5 52.5
HLPL Hazira 12.6 17.5 17.5 26.3 35.0
Dabhol 4.2 17.5 17.5 17.5 17.5
Kochi
Ennore
Mundra
East Coast terminal (3)
17.5
0
0
-
17.5
0
0
-
17.5
0
0
-
17.5
17.5
17.5
-
17.5
17.5
17.5
17.5
Total Capacity 69.3 96.3 96.3 148.8 175.0
Source: Draft Report on Gas for XII Five Year Plan
f: Forecast
Gas imports: LNG and transnational pipelinesDespite the likely increase in gas supply from domestic resources, the rapidly increasing demand
necessitates imports in the form of LNG and through transnational pipelines.
LNG importsGeographically, India is strategically located and is flanked by countries holding large proven gas reserves
both to its east and to its west. The country's large natural gas market is a major attraction to the LNG
exporting countries and in order to encourage LNG imports, the Government of India has kept import of
LNG under the Open General License (OGL) category and has permitted 100 per cent FDI in LNG
terminals.
Currently, India has two operational LNG import terminals:
Dahej LNG Terminal (10 Mmtpa): India started receiving LNG shipments in January 2004 with thecommissioning of Dahej terminal in Gujarat state. Petronet LNG, which owns this terminal, is promoted
by a consortium of ONGC, GAIL, IOCL, BPCL (total holding 50 per cent), Gaz de France International
(GDFI) (10 per cent), ADB (5.2 per cent), and with balance 34.8 per cent held by public. Petronet LNG
(PLL) has long term contracts with Ras Gas of Qatar for uninterrupted gas supply of 7.5 MMTPA and
has back to back sales arrangement with GAIL, IOCL & BPCL. PLL is also sourcing LNG through spot
and short term contracts from the international market for sale to other off-takers and bulk buyers.
Dahej terminal commenced operations in 2004 with the nameplate capacity of 5.0 Mmtpa and it was
expanded to 10.0 Mmtpa in July, 2009. The company has proposed to expand the capacity to 15 Mmtpa
by 2012.
The existing marine facilities of PLL are adequate for handling 10.5 to11.0 Mmtpa of LNG and it is
developing a second LNG Jetty to enhance the capacity of the terminal. The new jetty will help in
mitigating the risk of operating on a single Berth, facilitating berthing of tankers up to 260,000 cubic
metre (Q-Max). The project cost is estimated at US$ 200 million and is scheduled to be commissioned
by 3rd quarter of 2013.
Hazira LNG Terminal (3.5 Mmtpa): India's second LNG terminal started operations in April 2005 in
Gujarat state. The facility is owned by Hazira LNG, a joint venture of Shell and Total. Though supplies
for the terminal have not yet been secured on long term basis, Shell has been importing shipments of
spot LNG to operate the terminal. The terminal has operated at throughput capacity of 2.5 Mmtpa,
which can be expanded to 5 Mmtpa with marginal incremental investments in equipment. The Hazira
Terminal is expected to achieve a capacity to 10 Mmtpa as the gas market expands in India.
In addition to the above two running LNG terminals there are a number of projects in the pipeline in line with
the future potential demand for gas in India, both from a domestic as well as industrial requirement.
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The third LNG terminal Ratnagiri Gas and Power Private Limited (RGPPL) is promoted by NTPC Limited
and GAIL (India) Limited. Both these PSU hold 30.17 per cent equity each while 17.9 per cent is with MSEB
Holding Company Limited and the remaining 21.77 per cent is with financial institutions. The plant has
throughput capacity of 5 Mmtpa out of which 2.1 Mmtpa is dedicated for RGPPLpower plant while
remaining 2.9 Mmtpa is for merchant sale.
Petronet LNG is building its second LNG receiving terminal at Kochi (the country’s fourth), which would
have a capacity of 5.0 Mmtpa with 1.44 Mmtpa LNG supply tied from Exxon Mobil’s Gorgon Venture in
Australia for 20 years. It is planned to be commissioned by third quarter of 2012.
PLL is exploring the feasibility of developing one more LNG terminal on the East Coast of India to cater to
regional specific demand. PLL has completed market feasibility, demand assessment along with price
sensitivity studies.
Petronet LNG has signed a long term contract for supply of 7.5 MMTPA of LNG with RasGas, Qatar.It
accounts for ~86 per cent of total India’s total LNG imports. In addition, feasibility of importing LNG from
other source countries like Algeria, Indonesia, Trinidad & Tobago, Australia and Malaysia is also being
pursued.
IOCL in partnership with Tamil Nadu Development Corporation Ltd. (TIDCO) is planning to set up 2.5
Mmtpa LNG regasification project expandable to 5.0 Mmtpa, which will fulfil the gas requirements of the
surrounding region. The project will be situated at Ennore near Chennai. The company will also install a gas
based power plant at Kattupalli. The LNG terminal at Ennore is expected to cost approximately Rs. 10,000
crore.
GAIL is planning an LNG floating storage and regasification unit (FSRU) in Eastern India which could
require an investment of about Rs 3,000 crore. IOCL is also planning to set up an LNG import and
regasification facility in Dhamra.
Hiranandani Group, a large private construction/real estate company has planned to set up an 8 Mmtpa
terminal at Dighi port in Maharashtra for captive use for upcoming power plants and to supply gas to power
and fertiliser players.
Adani and GSPC plan to build a 5 Mmtpa LNG regasification terminal in Mundra on country’s western
coast. Both the partners will have equal stakes in the Mundra LNG terminal.
Reliance Industries Limited (RIL) and BP formed a JV, India Gas Solutions, which also plans to developinfrastructure for transportation and marketing natural gas in India and pursue opportunities including import
of LNG. The JV could build an LNG terminal and pipelines if it did not find capacity at India’s existing LNG
regasification facilities.
Transnational pipelinesFrom a geographical perspective, India is well placed to meet its natural gas requirement through
transnational pipelines. It is surrounded in the East, West and the North by major gas-surplus countries, in
terms of their proven gas reserves. Currently, two import pipelines projects are being explored from the
North (Daulatabad, Turkmenistan) and West (Iran):
• Turkmenis tan-Afghanis tan-Pakis tan-India (TAPI) pipeline: The 1,680 km, US$ 7.2 billion pipeline
project sponsored by the Asian Development Bank, will transport natural gas from Turkmenistanthrough Afghanistan and Pakistan to India. India, Pakistan and Afghanistan have signed a framework
agreement to buy natural gas from Turkmenistan in April 2008. A Special Purpose Vehicle (SPV) will
be floated for the project, and the pipeline will be built and operated by a consortium of companies from
the participating countries.
Iran-Pakistan-India (IPI) pipeline: A 2,775 km natural gas pipeline from Iran to India via Pakistan was
conceptualized in 1989, to cater to the growing Indian energy need. The Joint Working Group (JWG) of
the three countries was formed to discuss the price formula, transportation tariff and transit fee. India
and Pakistan have agreed to pay US$ 4.93 per million British thermal units; however some details
relating to price adjustment are pending for approval from the countries.
Iran and Pakistan signed the deal in June 2010 and target to export 21.5 MMscmd (or 8.7 bcm per year)of Iranian natural gas to Pakistan. According to Pakistan's minister of oil and natural resources, Iran-
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Pakistan natural gas pipeline will be completed before the end of 2013 one year ahead of the original
schedule. Out of the total US$ 7.6 billion dollars cost of the project, Pakistan is expected to spend
US$ 1.65 billion dollars. Due to hefty transit fee demanded by Pakistan, India has backed out of the
project at this stage.
In addition, there is potential for at least two import pipelines to be developed from the eastern side:
Myanmar-India pipeline
Bangladesh-India pipeline
Efforts have been made at the highest level for these projects, however, the decision remains delayed due
to regional geo-politics.
Technical and commercial feasibility studies were undertaken by INTECSEA in 2008, for a sub-sea pipeline
from Oman, costing US$ 10 billion.If implemented, the pipelines will reach a maximum depth of 3,500m with
a total length of about 1,000km.
City gas distribution in India: An overview
India saw the modern CGD sector taking its shape in early 1980s with entry of Gujarat Gas and GAIL.
Despite this, development of CGD lagged due to lack of reach of gas transmission infrastructure and proper
regulatory framework. However, with the proposed development of pipelines connecting Southern andEastern India to the gas sources and formation of a downstream regulator, namely, Petroleum and Natural
Gas Regulatory Board (PNGRB) in 2006, the ball has been set rolling.
Currently CGD map is limited to approximately 70 cities, with an available transportation network of 6500
km and 380+ CNG stations catering to 600 thousand domestic, 25 thousand commercial and 700+
industrial connections. An estimated investment of Rs. 400 billion is planned during XIth five year plan
(2007-12) in gas sector, 75% of which is for transmission pipelines and CGD distribution infrastructure
combined.
Policy decisions to grant infrastructure status to common-carrier gas pipeline projects, entry of private
playerssuch as Reliance, permission of 100% FDI in LNG imports etc are the required triggers for the
sector. With fructification of all or some of these measures, CGD is expected to include 70 more cities in the
near future.
Another initiative of MoPNG is the ‘Gas Utilization Policy’, which deals with ‘priority for use’ of natural gas.
According to this policy, CGD is fourth in priority after fertilizer, LPG extraction and power plants. As natural
gas availability is a major concern for growth of the CGD sector, this policy may affect the transportation
industry, a major beneficiary of CGD expansion in the country on account of expected replacement of
existing polluting liquid fuels by natural gas.
Some of the players in CGD include GAIL and its subsidiaries with regional players and other PSUs,
Reliance Gas, GSPC Gas Co. Ltd., Lanco Infratech Ltd, Adani Energy, GGCL, GEECL, DSM Infratech, LMJ
Energy Infralogistics Ltd etc.
PNGRB has held three rounds of bidding fo r city gas distributi on. The results of first and second
rounds are given in the chart. The third round, results of which are still pending, has attracted 51
bids for seven city-areas.
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Winners of first and second round of bidding fo r CGD Network Projects
First Round Second Round
Cities Won by Cities Won by
Kakinada(Andhra Pradesh)
Bhagyanagar Gas Allahabad IOCL+Adani JV
Dewas(Madhya Pradesh)
GAIL Gas Chandigarh IOCL+Adani JV
Meerut(Uttar Pradesh)
GAIL Gas Ghaziabad IOCL+Adani JV
Sonepat (Haryana) GAIL Gas Jhansi GAIL Gas
Kota(Rajasthan)
GAIL Gas Rajahmundry IOCL+Adani JV
Mathura(Uttar Pradesh)
JV of M/s DSM InfratechPvt. Ltd. & M/s SaumyaMining Pvt. Ltd.
Shahdol
Reliance Gas
Yanam Reliance Gas
3rd round of bidding for CGD Network Projects
Cities No. of bids received Bidders
Asansol-Durgapur(WB) 7 Hindustan Petroleum Corpn.Ltd., Great EasternEnergy City Gas Pvt. Ltd., GAIL Gas Ltd., Essar
Projects (India) Ltd., Lanco Infratech Ltd., RohanBuilders (India) Pvt. Ltd., and LMJ EnergyInfralogistics Ltd.
Ludhiana(Punjab) 16 Hindustan Petroleum Corpn Ltd., Indraprastha GasLtd., JPM Gas Ltd., GAIL Gas Ltd., Indian Oil-Adani Gas, Welspun Infratech Ltd., Siti EnergyLtd., Ambience Limited, GSPL – GSPC Gas, JayMadhok Energy Pvt. Ltd., HCC Infrastructure Co.Ltd., Everest Kanto Cylinder Ltd., LMJ EnergyInfralogistics Ltd., BPCL, ONGC & Oil India Ltd.,Rohan Builders (India) Pvt.Ltd., and LancoInfratech Ltd.
Jalandhar(Punjab) 12 Hindustan Petroleum Corpn.Ltd., Indraprastha GasLtd., Indian Oil-Adani Gas, Siti Energy Ltd.,
Ambience Ltd., BPCL, ONGC & Oil India Ltd.,
Lanco Infratech Ltd., Consortium of GSPL-GSPCGas, HCC Infrastructure Co. Ltd., LMJ EnergyInfralogistics Ltd., Jay Madhok Energy Pvt. Ltd.,and GAIL Gas Ltd.
Panipat(Haryana) Deferred Deferred
Jamnagar(Gujarat) 2 GSPC Gas Co. Ltd. and Lanco Infratech Ltd.
Bhavnagar(Gujarat) 2 Gujarat Gas Co. Ltd. and GSPC Gas Co.Ltd.
Kutch-East(Gujarat) 8 Hindustan Petroleum Corpn. Ltd., GAIL Gas Ltd.,GSPC Gas Co. Ltd., Indian Oil-Adani Gas, OnelifeGas Energy & Infrastructure Ltd., PSL Gas
Distribution Pvt. Ltd., Everest Kanto Cylinder Ltd.,and Jay Madhok Energy Pvt. Ltd.
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Cities No. of bids received Bidders
Kutch-West(Gujarat) 4 GSPC Gas Co. Ltd., JSIW Infrastructure Pvt. Ltd.,Indian Oil-Adani Gas and PSL Gas DistributionPvt. Ltd.
Regulation 17 is notified by PNGRB for existing entities, which were authorized to operate in cities on
acceptance by the Central Government. It is applicable for the CGD entities authorized by the Central
Government before the appointed date (1st October, 2007) of PNGRB. The entities and cities are
mentioned as below:
Acceptance of Central Government Authorization for CGD Ent it ies: under Regu lat ion 17
Name of the CGD Network Area Covered Entity Authorized
Agra CGD Network Agra Green Gas Limited
Hyderabad CGD Network Hyderabad Bhagyanagar Gas Limited
Indore CGD Network Indore including Ujjain Aavantika Gas Limited
Ghandhinagar MehsanaSabarkantha CGD Network
Ghandhinagar MehsanaSabarkantha
Sabarmati Gas Limited
Pune City including Pimpri
Chichwad CGD NetworkPune City includingPimpri Chiechwad andalong with adjoiningcontiguous areas ofHinjewadi,Chakan & Talegaon GA
Maharashtra Natural Gas Limited
Kanpur CGD Network Kanpur GA Central U.P. Gas Limited
Bareilly CGD Network Bareilly GA Central U.P. Gas Limited
Delhi CGD Network National Capital Territoryof Delhi
Indraprastha Gas Limited
Mumbai CGD Network Mumbai & GreaterMumbai
Mahanagar Gas Limited
Vijaywada CGD Network Vijaywada GA Bhagyanagar Gas Limited
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Exploration and production
India has 26 sedimentary basins covering 3.14 million sq. km of area. Of these 26 basins, 22 basins fall in
the three categories of being prospective, having identified prospectivity and proven to be commercially
productive. Of the total area of 3.14 million sq. km only 22 per cent has been moderately to well explored.
Exploration efforts have been initiated in 44 per cent of the area and 34 percent remains poorly to
completely unexplored. Currently, 1.06 million sq. km area is under active petroleum Exploration Licenses
in 18 basins and a total of 35,601 sq. km area is under Mining Lease. Out of the total 597 concessions in
operations 259 are under Petroleum Exploration License (PEL) and 338 are under Mining Lease (ML).
Status of Exploration in the Indian sedimentary basins in 2010-11
Source: Directorate General of Hydrocarbons, India
About 44 per cent of India’s total sedimentary basin area is in the onshore zone, covering an area of 1.39
million sq. km, and balance 56 per cent covering 1.75 million sq. km is in offshore zones, including
deepwater offshore zone of 1.35 million sq.km.
Acreage Portfol io of the Indian sedimentary basins
Source: Directorate General of Hydrocarbons, India
Earlier concerns of the prospectively of India's sedimentary basins have been offset by large discoveries in
the eastern offshore Krishna Godavari (KG) basin by Reliance in 2003 and GSPC in 2006. As a result, the
KG basin is now viewed as one of the most exciting exploration provinces in the world and is becoming the
hub of exploration activity in India. Though there are some concerns on gas production in KG D6, the recent
alliance of RIL and BP Plc, seems to add the required technological impetus to the Indian E&P story, and
open avenue for more deepwater offshore exploration.
22%
44%
12%
22% Poorly Explored
Exploration Initiated
Unexlpored
Moderately to WellExplored
Shallow Water (0.4 mn sq km)
13%
Deep Water (1.35 mn sq
km)43%
Onshore(1.39 mn sq
km)44%
Shallow Water
Deep Water
Onshore
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The hydrocarbon bearing potential of India's onshore acreage is also underlined by Cairn Energy's
Rajasthan oil discovery in 2004, which has yielded proven oil reserves of more than 1 billion barrels.
Participation by foreign exploration companies has increased since the first NELP-I bidding round in 1999
and in 2006, the number of foreign companies exceeded the domestic companies bidding under NELP VI.
The recent NELP-IX round has attracted 29 Indian companies and 8 foreign companies for 34 blocks on
offer.
Blocks awarded under NELP I - NELP VIII Rounds
Source: Directorate General of Hydrocarbons, India
Licensing regime
Pre-New Exploration Licensing Policy (NELP) explorationIndia's Exploration and Production (E&P) sector was largely dominated by ONGC and Oil India Limited until
the 1990s. With the initiation of the liberalization process in 1991, the upstream sector was opened up with
annual exploration bidding rounds for small and medium size fields for development by private companies
and JVs. In 1992 and 1993, two rounds of bidding for small and medium size fields were held.
Since 1993, the Government of India has signed Production Sharing Contracts (PSCs) for 28 exploration
blocks under Pre-NELP rounds, 11 of which have already been relinquished or surrendered. At present,
there are 16 exploration blocks under operation.
Major hydrocarbon discoveries made in the pre-NELP blocks are in the Gulf of Cambay by Cairn Energy,
Gujarat State Petroleum Corporation (GSPC) and Essar; and, in the Rajasthan Basin by Cairn Energy.
New Exploration Licensing Policy (NELP)
The New Exploration Licensing Policy (NELP) was introduced in 1997-98 by the Government of India toboost hydrocarbon exploration in the country. The Directorate General of Hydrocarbon (DGH) has held ninerounds of bidding under NELP I to NELP IX to date.
Some of the salient features of the NELP regime are:
Award of licenses through international competitive bidding. No acreage is to be awarded on nomination
basis and India's NOCs are to participate on competitive basis with other bidders.
An internationally competitive fiscal regime and no signature, discovery or production bonus. Contract
assures fiscal stability and full repatriation of profits abroad.
Participation through unincorporated JVs and no oil industry development cess or custom duty.
0.0
2.0
4.0
6.0
8.0
10.0
12.0
0
20
40
60
80
100
120
140
160
180
200
NELP I NELP II NELP III NELP IV NELP V NELP VI NELP VII NELPVIII
N o s .
% o f
T o t a l
S e d i m e n t
a r y B a s i n
No. of Blocks Offered
No. of Blocks Bid For
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Up to 100 per cent cost recovery (biddable).
Low to moderate royalty rates between 5 to 12.5 per cent and special concessions for deepwater
blocks.
Option to amortize exploration and drilling expenditure over a period of 10 years from the date of
commercial production.
Under the NELP I-VIII rounds, the DGH has awarded 235 blocks covering a total area of 1,468,511 sq. km.
Acreage Portfol io under License (NELP I – VIII)
Source: Directorate General of Hydrocarbons, India
The NELP VIII Licensing Round attracted a total of 76 bids for 36 blocks, out of 70 blocks on offer. Of the
24 deepwater blocks and eight onshore blocks on offer, single bids were placed for eight deepwater blocks
and two bids for onshore blocks. Out of the 28 shallow offshore blocks on offer, 13 blocks received bids,
with four blocks receiving multiple bids. On the other hand, all 10 Type-S (area not exceeding 200 sq.km.)
blocks received bids, with nine blocks receiving multiple bids. ONGC was the highest winner, totaling 17
blocks - 14 as operator, and 3 as non-operator. A total of 62 companies comprising of 10 foreign companies
and 52 Indian companies have bid either on their own or as a part of consortia.
Total 32 (8 deep water, 11 shallow water and 13 in onland areas) blocks were awarded and contracts have
been signed for all the blocks. Oil and Natural Gas Corporation (ONGC) won 14 blocks and along-with its
partners, BHP Billiton-GVK Power and Esveergee Steel (for the first time) won 3 blocks each, OIL, Cairn
India, Jubilant Oil & Gas and Harish Chandra won 2 blocks each. According to MOP&NG, investments of
approximately USD 1.1billion have been committed in this round.
66%
Onland,16.8%
17%
Deep water Onland
Shallow water
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Acreage Portfol io Awarded in NELP VIII Round
Source: Directorate General of Hydrocarbons, India
NELP IX Licensing Round 2010The NELP-IX bidding round was announced by the DGH in October 2010 with submission deadline of
March 18, 2011. Total 34 exploration blocks including 19 new blocks and 15 relinquished blocks in 10
sedimentary basins covering an area of about 88,807 Sq. Kms were offered. Out of the 34 blocks, 19
onland blocks (out of which 8 type S blocks in most prolific producing basins), 8 deep water and 7 shallow
water blocks were offered. In NELP IX, an area of 58,336 Sq. Km (65.69%) covering 19 new blocks was
offered for the first time. In the remaining 15 blocks on offer, newly acquired data based on new concepts
for hydrocarbon exploration and frontier areas was available.
Open Acreage Licensing Policy (OALP)
So far 9 NELP rounds have been conducted; although foreign companies participation for exploration ofacreage has increased considerably. In order to seek more participation from international bidders, GoI is in
the process of introducing new policy for bidding under which oil and gas acreages will be available round
the year instead of cyclic bidding rounds launched under New Exploration Licensing policy (NELP).
One of the pre-requisite/ challenges for the formulation of OALP is to establish a data repository center to
provide quality and reliable geo-scientific data for evaluation to E&P companies. DGH has initiated the
process of establishing a National Data Repository (NDR) for gathering all the available geo-scientific data
available in India under one roof so that it is easily available to all the agencies that require it, such as, E&P
companies, research institutes and academia.
In OALP, data for any block would be made available to bidders through the NDR and it will enable bidders
to bid for any oil & gas block throughout the year. This concept of bidding would be implemented in India in
near future.
Shale Gas
Shale gas is high on the agenda all the fronts in India, including Government, PSUs and private majors in
India. After the success of shale gas in US, India is seeing shale gas as the significant option to address our
energy security concerns. During the last decade, US shale gas production has increased from merely ~
2% to ~ 17% of the total natural gas production based on advances in horizontal drilling and hydraulic
fracturing technologies.
It is estimated that a number of sedimentary basins (Gangetic plain, Gujarat, Rajasthan, Andhra Pradesh &
other coastal areas) in India, including the hydrocarbon bearing ones – Cambay, Assam-Arkana, &
Damodar – have large shale deposits. Though all the shale deposits are not ideal for shale gas exploration,
substantial potential for gas is expected from these basins.
60%
31%
9%
Deep water
Onland
Shallow water
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India has plans to start licensing rounds for shale gas during XVII plan (2012-17), after assessment of
resource is done.GoI has signed MoU with US Geological Survey, Department of State in November 2010
to obtain technical assistance for characterization and assessment of shale gas resources, carrying out of
technical studies and training of manpower. Assessment of shale gas resources will help India to open up
the shale gas exploration acreages for bidding. The Directorate General of Hydrocarbons (DGH) is also
preparing for the auction of shale blocks in near future. In this regard, DGH has constituted a Multi
Organization Team (MOT) for the purpose of coordinating the National Oil Shale Program and has identified
five (5) sedimentary basins for detailed resource evaluation. Also, DGH is working on shale gas policy tocreate favourable environment for investments.
To understand the technologies and to gain experience for participation in shale gas bidding round in India,
Indian oil & gas companies have taken certain initiatives, some of those include:
ONGC, in association with Schlumberger drilled first R&D well in the Damodar Valley for exploring shale
gas deposits and encountered about 800 meters of shale. Test results are encouraging for the presence
of shale gas, however, detailed evaluation the shale is being carried out by ONGC through a US based
laboratory. ONGC is planning to drill three more such wells in the Gondwana basins for shale gas
exploration after this success.
In 2010, RIL acquired 40% stake in Atlas Energy’s Marcellus acreage, 45% stake in Pioneer Natural
Resources Eagleford Shale core acreage and a 60% stake in Carizzo Oil & Gas Marcellus Shale
acreage. Participation in the development of shale plays in the US will give RIL experience in shale gasdevelopment and extraction.
OIL has started seismic studies in the Assam-Arakan basin
In recent months, a number of Indian oil & gas companies have attempted to acquire shale gas assets
abroad, particularly in North America and Canada. These include OIL, IOCL, BPCL and others which
indicate their keenness to better understand and absorb the techniques for shale gas extraction in
collaboration with experienced players.
Bharat Petro Resources Ltd. (BPRL) acquired shale gas acreages from Australia’s Norwest energy to
pick up 50% and 27.80% P.I. in TP-15 and EP-413 blocks in Perth Basin.
In September, GAIL acquired 20% stake in one of Carrizo Oil & Gas Inc’s shale gas assets in the US.
Coal Bed Methane (CBM)
DGH has estimated prognosticated CBM resources at 4.6 Tcm spread over twelve Indian states covering
an area of 35,400 sq.kms. CBM exploration activities have already been initiated in 54 per cent of the area,
which is located in India’s major coal and Lignite bearing basins in the central and eastern parts of India.
Four CBM rounds have been completed till now and GoI have offered 36 blocks covering 18,600 sq KM
area out of which 34 blocks have been awarded including three blocks on nomination basis (two on
nomination and one through Foreign Investment Promotion Board route).
In CBM IVth round, GoI invited bids for 10 CBM blocks located in the different coal/lignite fields, covering an
area of about 5,000 sq.kms. In CBM IVth round, GoI invited bids for 10 CBM blocks located in the different
coal/lignite fields, covering an area of about 5,000 sq.kms. Total 26 bids were received for 8 blocks (out of
10 blocks) on offer. Government of India has awarded 7 CBM Blocks, however, bid for 8th block was
rejected due to non-submission of required bid documents by the sole bidder. The contracts for these 7
blocks were signed in July 2010. The awarded blocks covering an area of 3727 sq.km. are located in the
states of Assam (1), Jharkhand (1), Orissa (2), Madhya Pradesh (1), Madhya Pradesh & Chhattisgarh (1)
and Tamil Nadu (1). The estimated CBM resources of these 7 Blocks is about 330 BCM with expected
production potential of 9 MMSCMD.
Currently, CBM is commercially produced from five blocks in India, including Raniganj East, Raniganj
South, Jharia, Sohagpur West and Sohagpur East. Current CBM Production is about 0.15 MMSCMD that is
to likely to reach about 7.4 MMSCMD by 2013.
Key terms and conditions offered under the CBM rounds of licensing are as follows:
No signature bonus
10 per cent royalty
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Biddable Production Level Payment, payable on every incremental production of 0.5 mmscmd
Freedom to market gas in domestic market at market determined prices.
Fiscal stability provision in the contract
No customs duty on imports required for CBM operations
One time lump sum commercial Bonus of US$ 0.3 million, following declaration of commerciality
Seven year tax holiday period
E&P Ventures by Indian Companies in Africa
In order to enhance energy supply security and augment domestic exploration efforts, India's NOCs are
seeking overseas oil equity through acquisition of E&P assets. ONGC Videsh Limited (OVL), the overseas
arm of ONGC, has formed a number of JVs with foreign companies. As of 31st March 2011, OVL has a
presence in 33 projects in 14 countries spanning Africa, Asia, Latin America, and the Middle East.
In Africa, OVL, OIL, IOCL, BPRL, HPCL, Essar Energy and Videocon Group are actively pursuing E&P
activities. The major E&P projects in Africa where Indian Companies have a participating interest are as
follows:
S.No Country Block Participating Interest and Partners
1 Libya Block 86 OIL (50% Operator) and IOCL (50%)
102/4 OIL (50% Operator) and IOCL (50% )
Area 95/96 OIL (25%), IOCL (25%) and SIPEX (50%)
Contract Area – 43 OVL (100%)
2 Sudan GNOP Block 1, 2 & 4 OVL (25%), CNPC (40%), Petronas (30%),Sudapet (5%) Joint – Operatorship
Block 5A OVL (24.125%), Petronas (67.875%),Sudapet (8%), Petronas and SudapetareJoint Operators.
Pipeline Project OVL (90%), OIL (10%)
3 Nigeria OPL – 279 & OPL – 285 OVL holds PI through its JV ONGC MittalEnergy Limited (OMEL), which is the operatorof these two offshore blocks. Other partnersare Total and EMO
OPL-279: OMEL (45.5%), EMO (40%), Total(14.5%)
OPL-285: OMEL (64.33%) ,EMO (10%),Total-(25.67%)
OPL – 205 (Onshore) OIL has signed SPA and SHA for acquiring25% equity of Suntera Nigeria 205 Limited,which is a Nigerian company having 70%interest in Exploration Block OPL 205
OPL-226 Essar Energy (100%)
4 Egypt
Block 3 & 4, Offshore, Egypt Block 3 (South Quseir) is located in Red Seaarea and Block 4 (South Sinai) at the junctionof Gulf of Suez & Red Sea. GSPC ledconsortium was awarded these two blocks inGANOPE International Bid Round 2008.GSPC (50% Operator), OIL (25%), HPCL(25%)- PSA not signed
5 Gabon Shakthi OIL (45% Operator), IOC (45%) Marvis PteLtd (10%)
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S.No Country Block Participating Interest and Partners
6 Mozambique Offshore Area 1 Anadarko (36.5% Operator), Mitsui E&PMozambique Area 1 (20 %), BPRL VenturesMozambique BV (10 %), VideoconMozambique Rovuma 1 (10 %) and CoveEnergy Mozambique Rovuma Offshore (8.5%), Empresa Nacional de Hidrocarbonetos,E.P. (15%)
7 Madagascar 2 onshore blocks in theMorondava basin
Essar Energy (100%)
Refinery sector
In the last few years, India’s refinery sector has witnessed continuous capacity addition. As on April 2011,
India had a total capacity of 193.398 Mmtpa, growing by approximately 8.0 per cent in last 5 years.
According to BP Statistical Review 2011, India’s refining capacity utilization was highest in the world in 2010
which stood over 105 per cent while developed countries such as US, Canada and Japan manage 84 per
cent, 95 per cent and 81 per cent respectively. Even China was also unable to match the refinery capacity
utilization with India which was able to reach only 85 per cent in 2010. In last five years India’s refining
throughput has increased by a CAGR of over 23 per cent.
Refining throughput of major players
Source: PPAC
India has the largest refining capacity at single location at Jamnagar owned by, RIL with 60 MMtpa refiningcapacity. RIL has 2 refineries and holds 31 per cent of India’s refining capacity. IOCL is the largest refining
player in the country operating 10 refineries at different parts of the country with capacity of 65.7 MMtpa and
has 34 per cent share. BPCL operates 4 refineries with aggregate refining capacity of 30.5 MMtpa and
contributes 15.8 per cent to the refining capacity of the country. HPCL is the fourth largest company in
terms of refining capacity with 14.8 MMtpa capacity and holds 7.7 per cent share of refining capacity and
owns two refineries. ONGC with its subsidiary MRPL operates two refineries with total capacity of 11.9
MMtpa and contributes 6.2%. Essar Oil has 10.5 MMtpa refining capacity, operates only one refinery with
5.4 per cent share in refining capacity.
India accommodates refineries with refining capacity as low as 0.078 MMtpa to as high as 33.0 MMtpa. This
smallest refinery is being run by ONGC at Tatipaka while the largest refinery is owned and operated by RIL
at Jamnagar SEZ.
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
2005‐06 2006‐07 2007‐08 2008‐09 2009‐10 2010‐11
' 0 0 0 M T
IOCL BPCL HPCL ONGC (MRPL) Reliance Essar
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Current refining capacity (MMtpa) and companies share in refining capacity (%) in 2010
Source: PPAC (As on 1st April, 2011)
India's current refineries with capacity
Company Name Locati on Total Capacity (Mmtpa)
Indian Oil Corporation Limited
Digboi 0.65
Guwahati 1.00
Barauni 6.00
Koyali 13.70
Haldia 7.50
Mathura 8.00
Panipat 15.00
IOCL Subsidiary
Chennai (CPCL) 10.50
Narimanam (CPCL) 1.00
Bongaigaon (BRPL) 2.35
Bharat Petroleum Corporation LimitedMumbai 12.00
BPCL Subsidiary
Kochi 9.50
Bina (BORL) 6.00
Numaligarh (NRL) 3.00
Hindustan Petroleum Corporation Limited Mumbai 5.50
Vizag 7.50
Oil and Natural Gas Corporation Tatipaka 0.08Mangalore 11.82
Reliance Industries LimitedJamnagar 27.00
Jamnagar (SEZ) 33.00
Essar Oil Limited Vadinar 10.50
Total Capacity 193.39
Source: PPAC (As on 1st April, 2011)
Currently there are three refineries, under different stages of construction – HMEL refinery at Bhatinda
(Punjab),IOCL refinery at Paradip, and Nagarjuna Oil Corporation Limited (NOCL) at Cuddalore
34.0%
15.8%
HPCL,14.8, 7.7%
ONGC(MRPL), 11.9,
6.2%
Essar, 10.5,5.4%
31.0%
IOCL
BPCLHPCL
ONGC (MRPL)
Essar
Reliance
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HPCL-Mittal Energy Limited (HMEL), a 49 per cent each-JV promoted by HPCL and steel conglomerate LN
Mittal Group Company, Mittal Energy Investment Pte Ltd, Singapore is constructing an oil refinery at
Bhatinda with a capacity of 9.0 MMtpa. It is designed to process wide variety of crude oil including heavy,
sour and acidic crudes. The project is expected to be commissioned by first quarter of 2012.
Indian Oil Corporation Limited (IOCL) is setting up a grassroot refinery at Paradip, Orissa with a refining
capacity of 15 MMtpa. This refinery would be the most modern refinery in India with a nil-residue
production, and the refined products would meet stringent specifications. Paradip refinery project cost is
estimated at Rs. 29,777 crore (~US$ 6 bn) and the project is expected to be commissioned by April-June,2013.
Nagarjuna Oil Corporation Limited (NOCL), a subsidiary of Nagarjuna Fertilizers and Chemicals Limited is
setting up an oil refinery in Cuddalore, Tamil Nadu of 6.0 MMtpa in first phase which would be expanded to
15.0 MMtpa in future. The refinery would be state of the art with high complexity index designed to allow
processing various grades of crude oil (High Sulphur-high residue to Low Sulphur- low residue). The
refinery will produce auto fuels that will meet Indian as well as international specifications of Euro IV and
Euro V. Cuddalore refinery is expected to be commissioned by end of March 2012.
HPCL plans a US$6.7bn refinery of capacity 360,000b/d (19.5 MMtpa) refinery in Maharashtra in western
India. This will increase its refinery capacity by more than 500,000b/d (25.0 MMtpa) by 2017, which is
significantly higher than its current capacity of 280,000b/d (14.8 MMtpa). by 2017. This was necessitated by
HPCL's current retail expansion, which forced the company to buy products from other refiners.
BPCL is also planning to increase its refining capacity by expanding two of its existing plants or setting up a
greenfield refinery. Cals Refineries, with which BPCL has a fuel-offtake agreement, is also working on a
long delayed project to reconstruct Germany's Ingolstadt refinery in India.
India has one of the largest talent pools working in refineries in the world having hands on experience on
different technologies operations and this might be the opportunity for Africa to make partnership to improve
refinery efficiency, debottlenecking, capacity enhancement, process optimization, supply chain
management etc.
Import and export of petroleum and oil products
Net Product Export (Thousand metric ton)
Source: PPAC
10,018
15,964
18,318 20,377
36,311
41,796
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2005‐06 2006‐07 2007‐08 2008‐09 2009‐10 2010‐11(P)
N e t p r o d u c t e x
p o r t ( ' 0 0 0 M T )
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According to the Petroleum Planning & Analysis Cell (PPAC), India is net exporter of Naphtha, Petrol, ATF,
Kerosene and Diesel since last few years. In last five years the net export of petroleum products increased
to four folds and this quantity is expected to increase further as India is expected to have export potential of
approximately 93 MMtpa refined products by 2013, when the expected refining capacity should be 241,
subsequent to completion of new projects and expansion of existing plants.
The Government has increased Foreign Direct Investment (FDI) into the refining sector. In 2007, approval
was granted for HPCL's refinery-cum-petrochemical complex in Bhatinda, Punjab with the partnership of
Mittal Investments. The FDI was increased from 26 per cent to 49 per cent in oil refining. This can beviewed as a major step towards the involvement of international oil companies in green-field refinery
projects in India.
Pipelines in India
India has wide network of crude oil, petroleum products, natural gas as well as LPG pipeline. During 1960-
63, Oil India Limited laid the first trunk crude oil pipeline, 1156 km long from Naharkatiya and Moran oil
fields to the Refineries at Guwahati and Barauni. Crude oil pipelines are installed to transport crude to
refineries across the country. The first cross country product pipeline was laid by IOCL during 1962-64 to
transport products from Guwahati Refinery to Siliguri. Refined products pipelines are to carry products from
refineries to demand centres as well as to port locations for export purpose. Natural gas pipelines are the
largest network in India and two main pipelines HVJ and EWPL are the cross country pipelines to transportgas to power, fertlizer, petrochemical plants, other industries and for CGD. LPG pipeline from Jamnagar to
Loni is the longest LPG pipeline in the world.
Crude oil pipeline networks:
As on March 1st 2011, India has over 13,459 kms of product and 7,837 kms of crude oil pipeline network,
with a capacity of 76.23 MMTPA and 106.1 MMTPA repectively.
ONGC has total 27,830 km long pipelines in India including 6,946 km of offshore pipeline.Oil India Limited
(OIL) owns and operates 1,432 km of cross-country crude oil pipelines. The state-of-the-art pipeline can
transport over 8.0 MMtpa of crude oil, feeding 4 PSU refineries Numaligarh, Guwahati, Digboi, Bongaigaon
and Barauni in Assam and Bihar state.
Cairn India’s The Mangala Development Pipeline (MDP) is the world’s longest continuously heated and
insulated pipeline. This is 670 km pipleine originates from Mangala Processing Terminal (MPT) in theMangala Field (Rajasthan) and end at the coastal location of Bhogat near Jamnagar on the western coast
of India.
Crude oil pipeine network
Pipeline Owned and operated by Length (kms)
Bombay High-Uran ONGC 203
Heera-Uran ONGC 81
Ahmedabad-Koyali ONGC 77
Ankleshwar-Koyali ONGC 94
Kalol-Nawagam-Koyali ONGC 127
Nahorkatiya-Digboi OIL 48
Nahorkatiya-Guwahati-Bongaigaon-Barauni
OIL 1157
Salaya-Mathura Pipeline (SMPL) IOCL 1870Paradip-Haldia-Barauni Pipeline(PHBPL) IOCL
1302
Mundra - Panipat Pipeline (MPPL) IOCL 1194
Mundra – Bhatinda Pipeline HPCL-Mittal 1100
Vadinar-Bina BPCL 950
Mangala Development Pipeline Cairn 674
Source: ONGC, OIL, ICL, HPCL, BPCL, Cairn
Petroleum pipeline network:
IOCL operates a network of 10,899 km long crude oil, petroleum product and gas pipelines with a capacityof 75.26 MMtpa of oil and 10 mmscmd of gas. This is around 75 per cent of the country’s total domestic oil
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pipeline network. IOCL is installing one more large product pipeline Paradip-Sambalpur-Raipur-Ranchi
which would be 1065 km long.
Pipeline Owned and operated by Length (kms)
Guwahati-Siliguri Pipeline (GSPL) IOCL 435
Koyali - Ahmedabad Pipeline (KAPL) IOCL 116
Haldia - Barauni Pipeline (HBPL) IOCL 525
Barauni - Kanpur Pipeline (BKPL) IOCL 745
Haldia-Mourigram-Rajbandh Pipeline(HMRPL)
IOCL 277
Mathura-Delhi Pipeline (MDPL) IOCL 147
Panipat-Ambala-Jalandhar Pipeline(PAJPL)
IOCL 268
Panipat-Delhi Pipeline (PDPL) IOCL 105
Mathura-Tundla Pipeline (MTPL) IOCL 55
Panipat-Rewari Pipeline (PRPL) IOCL 155
Panipat-Bhatinda Pipeline (PBPL) IOCL 219
Koyali- Sanganer Pipeline (KSPL) IOCL 1056
Chennai – Trichy - Madurai ProductPipeline (CTMPL)
IOCL 526
Madurai – Sankari (Branch pipeline) IOCL 157
Koyali - Dahej Product Pipeline(KDPL)
IOCL 103
Manali - Chennai ATF Pipeline IOCL 95
Koyali-Ratlam Product Pipeline IOCL 265
Chennai-Bangalore Pipeline IOCL 290
Bijwasan-Panipat Naphtha Pipeline IOCL 111
Branch Pipeline to Hazira fromKoyali-Dahej Pipeline
IOCL 94
Mathura-Bharatpur spur Pipeline IOCL 132
Mumbai-Pune pipeline HPCL 161
Visakh-Vijayawada-SecunderabadPipe Line (VVSPL):
HPCL 571
Mundra-Delhi Pipe Line (MDPL) HPCL 1056
Mumbai-Manglya-Piyala BPCL 875
Bina - Kota Pipeline BPCL 257
Kota-Jobner Pipeline BPCL 210
Numaligarh-Siliguri Pipeline OIL 660
Source: IOCL, BPCL, EIL, HPCL
Natural gas pipeline network:
India has more than 11,900 km long natural gas pipeline networks out of that about 2,500 km of pipeline
commissioned over the past 2-3 years and total gas transportation design capacity is about 283 mmscmd.
GAIL has the largest natral gas pipeline network in India with over 8,000 km long (including spurlines), with
capacity of approx. 170 mmscmd. GSPL Gujarat has 2,000 km network mainly in Gujarat with handling
capacity of 40 mmscmd. Assam Gas / Oil India has 571 km gas pipeline network with 8 mmscmd handling
capacity. RIL’s subsidiary RGTIL owns and operates East-West pipeline (EWPL) of 1,400 km long and has
80 mmscmd capacity.
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Pipeline network/ section
Pipeline Owned andoperated by
Length(km)
Capacity(mmscmd)
HVJ Network HVJ / GREP (Gas Rehabilitationand Expansion Project)
GAIL 3397 33
Dahej – Vijaipur pipeline GAIL 770 35
Vijaipur – Dadri GAIL 458 60
Chainsa - Sultanpur – Neemrana GAIL 218 35
Dadri - Bawana GAIL 96 35Dahej – Dabhol Dahej – Uran pipeline GAIL 474 12
Dabhol – Panvel Pipeline GAIL 327 12
Other networks Gujarat & Rajasthan GAIL 1000 20
Maharashtra GAIL 140 25
KG basin GAIL 835 16
Cauvery Basin GAIL 256 9
Others GAIL 424 10
EWPL East West Pipeline RGTIL 1400 80
GSPL pipelinenetwork inGujarat
Gujarat network GSPL 1874 40
OIL / Assam Gas North East OIL / AGCL 571 8
Dadri-Panipat Dadri-Panipat R-LNG SpurPipeline
IOCL 132 -
Source: MoPNG Annual Report 2009-10, GAIL, GSPL, RIL, OIL
In order to increase reach of gas,especially to southern and eastern India, GAIL has aggressive plans of
laying pipelines. It had approved investment of Rs. 8000 crore in 2010 for laying new pipelines and
augmenting existing pipelines. GAIL’s new upcoming pipelines:
Pipeline Length(km)
Capacity(mmscmd)
Expectedcommissioning
Dadri Bawana Nangal (Completed till Bawana in Ph-I) 610 31 2011-12
Chainsa Jhajjar Hissar (Completed till Sultanpur in Ph-I) 300 35 2011-12
Jagdishpur Haldia 2000 32 2013-14
Dabhol Bangalore 1386 16 2011-12
Kochi Kanjirikkod Bangalore 860 16 2012-13
TOTAL 5156 130
Source: GAIL
After completion of above mentioned upcoming pipelines which are expected to be commissioned by 2013-
14, the capacity of GAIL pipeline network is expected to increase from 157 MMSCMD at present to over
300 MMSCMD and overall length would be 14,000 Kms.
LPG Pipeline:
GAIL is the first company in India to own and operate LPG transmission pipeline and owns a cross country
Jamnagar-Loni LPG pipeline . It has 2,038 km LPG pipeline network 1,415 km of which connects the
western and northern parts of India and 623 km of networks is in the southern part of the country
connecting Eastern Coast. The LPG transmission network has a capacity to transport 3.8 MMTPA of LPG.
IOCL and BPCL also operate LPG pipleines. IOCL owns Panipat-Jalandhar LPG Pipeline (PJPL) which is
274 kms long while BPCLs LPG pipeline is to transport LPG from Mumabi refinery to Uran.
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Natural Gas Pipelines in Ind ia- Existing and Proposed
Source: PNGRB, India
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New major pipeline projects approved during 2009-10
Focus Energy to RRVUNL Pipeline (10"x90 Km.), project cost of Rs.99 crore
Dabhol-Bangalore Pipeline (30"/18"/10"/8"x1389 km), project cost of Rs 4543 crore.
Kochi-Kootanad-Bangalore Pipeline (24"/12"8" x 1114 km.), project cost of Rs. 3032 crore.
Jagdishpur-Haldia Pipeline (36"/30"/24"18"/ 12x2050 km.), project cost of Rs. 7596 crore.
Muradabad-Kashipur-Rudrapur Pipeline (12"/105km., 8"x54km.), project cost of Rs. 252 crore.
Capacity Augmentation of Agra-Ferozabad Pipeline (12"/10"/x65 km.), project cost of Rs. 119 crore.
Vijaipur-Borari, Spur Pipeline to Bhaiwara & Chittorgarh (18"16"/12"x290 km.), project cost of Rs. 463
crore.
Spur Pipeline to Jalandhar and Consumer Network to Ludhiana & Jalandhar (24"/4"x85 km.) and Spur
Pipeline from Saharnpur to Hariwar-Roorkee-Rishikesh-Dehradun (16"/10"/8"/4"x176), project cost of
Rs.540 crore.
IOCL has planned for 2,000 km new pipeline projects with estimated investments of Rs. 2000 crore for
expanding the infrastructure for transporting crude oil and petroleum products. These include the 700 km
Paradip-Haldia-Budge Budge-Kalyani-Durgapur LPG Pipeline, 295 km Sanganer-Bijwasan Naphtha
Pipeline, 270 km branch pipeline from Patna to Motihari and Baitalpur, 120 km Cauvery Basin Refinery to
Trichy Pipeline and 400 km Ennore-Trichy-Pondicherry LPG Pipeline.
Gujarat State Petronet Ltd, (GSPL) won a contract from PNGRB for laying three cross- country gas
distribution pipelines which include Mallavaram-Bhilwara (1611 km), Mehasana-Bhatinda (1688 km) and
Bhatinda-Jammu (512 km) pipelines. The estimated cost of the project would be Rs 12,500 crore. These
pipelines will have gas transportation capacity of 95 mmscmd. GSPL has 52 per cent stake in the
consortium, IOC has 26 per cent stake, BPCL and HPCL have 11 per cent stake each.
GAIL also won the rights to lay Surat-Paradip Pipeline of 1,550 km long natural gas pipeline from Surat in
Gujarat to Paradip in Orissa, which will connect west to east coast. This pipeline would be bi-directional with
a capacity to carry up to 60 mmscmd of gas. The pipeline will have 36-inch diameter and estimated cost of
the project would be Rs 5,500 crore. This will be the first pipeline in the country which will be originating
and terminating at a port - originate from Mora in Gujarat (a major node/terminal of GSPL gas grid pipelinenetwork) and end at the IOCLs Paradip refinery.
Sector organization
Oil sector companies
The Indian oil sector is dominated by state-owned enterprises. In the upstream segment, state-owned Oil
and Natural Gas Corporation (ONGC) is the largest player and accounted for roughly three-fourths of the
country's oil output in 2009-2010.
ONGC also holds overseas E&P interests through its subsidiary, ONGC Videsh Ltd. (OVL). The key
business of OVL is to prospect for oil and gas acreages abroad including acquisition of oil and gas fields,exploration, development, production, transportation and export of oil and gas. OVL has made major
investments in Vietnam, Russia, Brazil, Venezuela and Sudan, and is currently engaged in
exploration/production in Libya, Egypt, Syria, Nigeria, Congo, Colombia, Cuba, Iraq, Iran, Qatar,
Kazakhstan and Myanmar. OVL’s international oil and gas operations produced 9.45 MMT of O+OEG in
2010-11.
Oil India Limited (OIL), second largest national oil and gas company in India, has presence mainly in North
East, East Coast and Rajasthan in India. It also has international presence from acquisition of E&P assets
and holds interest in seventeen blocks, spread across seven countries, namely Libya, Egypt, Iran, Gabon,
Nigeria, Venezuela, Sudan, Timor Leste, and Yemen. It has domestic acreage of 127,260 sq. km and
International acreage of 38,605 sq. km. It operates 40 blocks and has significant participating interests in 21
non-operating blocks.
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Post liberalization, the upstream sector has witnessed a number of new foreign and domestic entrants, such
as, Reliance, Cairn, BG, Niko, HOEC, Hardy Oil, ENI, Santos, etc. Many of the companies entered Indian
E&P sector after introduction of NELP in India which provides level playing field to the upstream companies.
Recently, RIL has made an historic alliance with BP in the E&P, gas marketing and distribution sector. This
is the biggest FDI investment in Indian oil and gas sector. Also, Vedanta Resources Plc acquired
controlling stake in Cairn India, GoI consent for the deal is underway.
In the midstream refining segment, over 63 per cent of refining capacity is held by the state owned refiningcompanies, with the largest share of capacity (34 per cent) being held by IOCL. BPCL and HPCL together
hold 23.5 per cent share of the capacity, while ONGC holds 6.2 per cent of total refining capacity in India
(including MRPL, acquired by ONGC in 2002-2003).
The balance 36.4 per cent of refining capacity is held by private players Reliance and Essar. Reliance's
Jamnagar refineries have the world’s largest refining capacity at a single location in the world. Reliance is
the second largest refiner in the country with 31 per cent refining capacity in the India
Gas sector companies
While upstream gas production is dominated by ONGC, RIL, and OIL, transmission, distribution and
marketing of gas in India is currently dominated by GAIL India Limited (GAIL), GSPL and RIL. GAIL owns
and operates gas transmission and distribution infrastructure of over 8,500 km of pipelines with a capacity
to carry over 170 MMSCMD of natural gas across the country. The Company is also implementing 5 newpipelines and in addition, augmenting capacity of two existing pipelines. This will lead to doubling of pipeline
length and transmission capacity in the next 3 to 4 years. GAIL accounts for 75% of India’s natural gas
transmission. In addition, GAIL has 7 LPG plants in the Country and 2,038 KM of LPG transmission pipeline
network with a capacity to transport 3.8 MMTPA of LPG. It has produced over 1,068 TMT of LPG in 2010-
11. GAIL also owns and operates a gas based petrochemical plant at Pata (UP) with a capacity to produce
410,000 TPA Polyethylene (HDPE & LLDPE), which is further being expanded to produce 900,000 TPA of
polymers.. In addition, GAIL is implementing a petrochemical project in Assam to produce 280,000 TPA of
polymers through its subsidiary Brahmaputra Cracker & Polymer Ltd. (BCPL). GAIL is also a co-promoter in
ONGC Petro-additions Limited (OPaL) being set up at Dahej which is implementing a petrochemical project
to produce 1.4 MMTPA of polymers.
GAIL has implemented city gas distribution projects in major Indian cities through its 8 JV companies to
supply gas to domestic and transport sector. The company has also floated a wholly owned subsidiary –GAIL Gas Limited for the smooth implementation of city gas distribution projects.
Petronet LNG Limited (PLL) is promoted by ONGC, GAIL, IOCL and BPCL to import LNG and to set up an
LNG re-gasification plant at Dahej in Gujarat State. Petronet LNG has signed a long term contract for
supply of 7.5 MMTPA of LNG with RasGas, Qatar. In August 2009, Petronet LNG signed a 20 year contract
with ExxonMobil to bring 1.5 mmtpa of LNG for its upcoming terminal in Kochi. PLL also sources spot
cargoes from the international market and has expanded its Dahej terminal to 10 Mmtpa.
In February 2011, RIL and BP announced a transformational partnership in India, According to this, BP has
acquired 30% stake in 23 Oil and Gas production sharing contracts that Reliance operates in India,
including the producing KG-D6 block, and also incorporated a 50:50 joint venture called India Gas Solutions
Pvt. Ltd in November this year. This JV Company will focus on global sourcing and marketing of natural gas
in India and it will also develop infrastructure to accelerate transportation and marketing of natural gas in
India. This partnership will combine BP’s world class deep water exploration and development capabilities
with Reliance’s project management and operations expertise and would help RIL to ramp up the falling
production from KG-D6.
Other main players in Indian gas sector are Shell Hazira LNG, Gujarat Gas, Indraprastha Gas Limited,
Mahanagar Gas Limited, GSPL, Adani Gas etc.
Policy and regulatory overview
Foreign Direct Investment (FDI) guidelines
In order to promote investments in the Oil and Gas sector, Government of India has approved Foreign
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Direct Investment (FDI) and equity participation for different activities within the sector as follows:
FDI Cap allowed Sector Approval route Permissib le subject to…
100%Petroleum productmarketing
AutomaticExisting sectoral policy andregulatory framework in theoil marketing sector
100%Exploration activities in oil& gas
Automatic
Under the policy of theGovernment onforeign/private participationin exploration andproduction
100%Petroleum productPipelines
AutomaticUnder the GovernmentPolicy and regulationsthereof
100% Natural gas/LNG pipelinesWith prior Governmentapproval
100%
All activities other thanrefining, and including
market study andformulation;investment/financing;setting up infrastructurefor marketing in thepetroleum and natural gassector
Automatic
Sectoral regulations issuedby the Ministry of Petroleum
& Natural Gas; and in caseof actual trading andmarketing of petroleumproducts, divestment of26% equity in favor of theIndian partner/public within5 years
49%Refining sector in the caseof Public sectorUndertakings
Through ForeignInvestment PromotionBoard (FIPB)
Sectoral Policy
100%Refining sector in the caseof Private companies
Automatic
Source: Ministry of Finance, Government of India
Ministry of Petroleum & Natural Gas
Upstream
(Exploration &
Production)
Downstream & EPCIndustry Bodies/
Regulatory Bodies/
Others
ONGC
Other companies:
BHP Billiton, Jubilant
Energy, HOEC, BG Niko,
Videocon, etc.
GSPC
IOCL
CPCL, BRPL
HPCL
BPCL
GAIL
RIL, Essar Oil,
Nagarjuna Oil
Company Ltd.
Engineers India Ltd.
Directorate General of
Hydrocarbons (DGH)
Petroleum & Natural Gas
Regulatory Board (PNGRB)
Petroleum Planning &
Analysi s Cel l (PPAC)
Centre for High Technology
(CHT)
Petroleum Conservation