LPG Logistics and Infrastructure In India

Challenges and Opportunities

Pradip Kumar Jha

Chief General Manager (LPG-Operations)

Indian Oil Corporation Limited, India

The International LP Gas Seminar 2018Tokyo, March 6th and 7th, 2018

LPG Demand & Supply Outlook

AGENDALPG Logistics & Infrastructure

Opportunities for the World

Introduction

IndianOil – Company Profile

ACTION PLAN TGET

o An integrated Energy major, ranked 168th amongst the top World’s Largest Corporates(1st in India).

Revenue USD 65.4 Billion & Profits USD 2.8 Billion in 2016-17

o Owns 11 out of 23 Indian Refineries (Approx. 35% of totalrefining capacity of India)

Refining capacity in MMTPA

o Handling appx. 71% Pipeline throughput in downstream sector

IOC BPC HPC Others Total

80.7 36.5 33.6 95.07 245.87

IOC BPC HPC Total

13300 kms

93.7 MMTPA

2229 kms

16.54 MMTPA

2514 kms

23.57 MMTPA

18043 kms

133.81 MMTPA

IndianOil – Company Profile

ACTION PLAN TGET

o 91 LPG Bottling Plants supplying 2.4 million LPG Cylinderseveryday

o Nationwide network of 9961 LPG distributors delivering LPGCylinders at the doorsteps of 125 million customers

IOC BPC HPC Total

No. of Plants 91 51 47 189

Bottling Capacity (TMTPA) 9085 3747 3882 16714

% capacities 54 23 23 100

IOC BPC HPC Total

No. of Distributors 9961 4899 4733 19593

No. of Customers (Million) 125 66 68 259

Marketing Setup of Indian LPG Industry

Domestic Non-DomesticTransport

(Auto LPG)

SubsidisedNon

Subsidised

19 kg 47.5 kg 425 kg

5 kg5 kg

Industrial Bulk

Segments of Indian LPG Industry

Domestic, 90%

Non-Domestic,

6.5%

Industry Bulk , 2.4%

Transport, (Auto

LPG) 0.9%

2017-18

Domestic, 91.2%

Non-Domestic,

5.5%

Industry Bulk, 2.6%

Transport (Auto LPG), 0.7%

2031-32

Segment-wise Constant Growth

AGENDA

Introduction

LPG Logistics & Infrastructure

Opportunities for the World

LPG Demand & Supply Outlook

LPG Consumption, Production & Import – Historical

14.315.3

15.6 16.318.0

19.621.5

9.6 9.5 9.8 9.810.6 11.1

4.75.8 5.8 6.3

8.29 10.4

0

5

10

15

20

25

10-11 11-12 12-13 13-14 14-15 15-16 16-17

Consumption

Indg. Availability

Import

Nos. in MMT

Demand – 50% Increase Import – 121% Increase Production – 15.6% Increase

Large Dependence on Imports

CAGR – 8.52% CAGR – 3.0% CAGR – 17.0%

Base Year 2010-11

Demand

Production

Import

(Nos. in MMT)

24.0

29.2

32.8

35.539.8

11.913.8

18.5 18.6 18.6

12.1

16.8

14.316.1

19.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

17-18 18-19 19-20 20-21 21-22 22-23 23-24 24-25 25-26 26-27 27-28 28-29 29-30 30-31 31-32

LPG Consumption, Production & Import – Projections

Demand – 54% Increase

Production – 56% Increase

Import – 57% Increase

Demand – 56% Increase Import – 66% Increase Production – 57% Increase

CAGR – 3.65% CAGR – 3.2% CAGR – 3.3%

AGENDA

Introduction

LPG Demand & Supply Outlook

Opportunities for the World

LPG Logistics & Infrastructure

LPG Supply Chain – India

Bulk Movement

Packed Cylinder Movement

IMPORT TERMINAL

REFINERY /FRACTIONATOR

11

LPG Supply Chain – Reach Out to the End User

C

Packed movement

thru Cylinder Trucks

B

Bulk movement thru

Pipelines, Rail & Road

Dist.- 19593

IOC – 9961

BPC – 4899

HPC - 4733

Plants – 189

IOC – 91

BPC – 51

HPC - 47

Sources-47

Refineries – 22

Fractionators – 9

Import terminals 16

As on 01.02.2018

LPG Supply

Sources

- Middle East

- Others

A

Movement of LPG ex Supply

source thru LPG Vessels

Distance of 1st Indian Port from Major Suppliers

13

RAS TANURA

MINA AL AHMADI

RAS LAFFANRUWAIS

KANDLA

COUNTRY (Supplier) PORT NAUTICAL MILESDISTANCE (IN DAYS)

KUWAIT (KPC) MINA A AHMDI 1301 3.9

QATAR (Qatar Petroleum) RAS LAFFAN 1106 3.2

SAUDI ARAB (Aramco) RAS TANURA 1177 3.5

UAE (ADNOC) RUWAIS 1072 3.2

IRAN ASSALUAH 1100 3.2

IRAN

SOHAR

Country-wise LPG Import

Saudi Arabia,

28

Qatar, 36

Kuwait, 10

UAE, 13

Russia , 5

Malaysia, 2

Azerbaijan , 3 Oman, 3

% Import

Year QTY TMT FOB CFR Total

2015-16 8122 599 8721

2016-17 8781 1619 10400

2017-18 (Proj) 9909 1391 11300

FOB : Freight on Board

CFR : Cost & Freight

Major imports – 87% from Arabian Gulf

LPG Import Terminals – Name Plate / Achieved Capacity in MMTPA - 2016-17(2) Kandla

(IOC)

0.60 /1.06

(10) Haldia

(IPPL)

0.60 /2.1

(7) JNPT

(BPCL)

0.60 / 0.68

(8) Mangalore

(TOTAL)

0.30 / 0.45

(9) Mangalore

(HPCL)

0.6 / 1.42

(15) Ennore

(IPPL)

0.6 / 1.4

(13 & 14) Vizag

(SALPG/EIPL)

0.6 / 1.65

(16) Tuticorin

(SHV)

0.12 / 0.13

(4) Paradip(IOC- 2019-20)

2.00 MMTPA

(1) Mundra(Adani – 2019-20)

1.50

(2) Cochin(IOC- 2019-20)

0.60 MMTPA

Existing – 16 Nos.

(3) Haldia

(BPCL -2018-19)

1.00 MMTPA

(11) Haldia

(Aegis -2017-18)

1.00 / 0

(6) Mumbai

(Aegis)

0.4/0.49

(4) Pipavav

(Aegis)

0.20 / 0.50

(3) Porbandar

(SHV)

0.12/0.11

(5) Dahej

(GCPTCL)

0.40 / 0.44

Existing Cap : 6.74

Ach. Cap : 10.4

Proposed Addition : 5.10

(1) Sikka

(RIL)

0.6/0.15

Proposed – 4 Nos.

(12) Port Blair

(2017-18)

Butane - Propane Ratio

60.8 62 61.7 59.1 58

39.2 38 38.3 40.9 42

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013-14 2014-15 2015-16 2016-17 2017-18

PROPANE

BUTANE

-$29 -$21 -$27 -$47 -$8Propane ~ Butane

Differential

VLGC – MGC Ratio

3.23.7

5.4 5.3 5.3

6.2

2.6 2.12.4

2.9

3.85.1

1.3

1.82.2

1.81.4 1.2

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

VLGC

MGC

VLGC/MGC Ratio

Figs. In MMT

Increasing Trend in Utilization of MGCs due to port constraints –

Higher ocean freight (about USD 8 per MT)

VLGC : Very Large Gas Carrier

MGC : Medium Gas Carrier

Mode of Transportation of Bulk LPG

Road, 63%

Rail,5%

Pipeline, 32%

Road

Rail

Pipeline

Efforts to Improve Pipeline Share to 55 %

% as of 2016-17Average freight :

a) Road - Rs.2.8/MT/km

b) Rail - Rs.2.02/MT/km

c) Pipeline – Rail tariff (VSPL/JLPL), other

pipeline as per IRR working (~ 60% to 80% of

road tariff)

Mumbai

Vizag

Panipat

Guwahati

Haldia

Vijayawada

Coimbatore

Barauni

Rewari

Mundra

Jalandhar

Digboi

Ennore

Mangalore

Secunderabad

Ajmer

Paradip

Jamnagar

Loni

Hazira

Trichy

Chakan

Muzaffarpur

Koyali

Sanand

Lucknow

Bangalore

Mathura

Bhagalpur

Durgapur

Bhopal

Madurai

Ujjain

Kochi

N.Guwahati

Patna

Salem

Kandla

Mysore

21

Gorakhpur

Hassan

Jaipur

Gwalior

Allahabad

Varanasi

Kanpur

Proposed LPG Pipeline Network

SN Pipelines Company Length

(KMs)

Rated

Capacity

(MMTPA)

Existing Pipelines : 2394 6.27

1 Jamnagar - Loni GAIL 1415 2.5

2Visakapatnam -

SecunderabadGAIL 623

1.13

3 Panipat - Jallundhar IOC 273 0.7

4Mangalore – Mysore –

YediyurHPC

356 1.94

Under Implementation

Pipelines : 2519 5.43

1

Paradip – Haldia – Durgapur

– Barauni – Muzaffarpur –

Patna

IOC 12782

2 Ennore – Trichy – Madurai IOC 615 0.9

3Kochi – Coimbatore – Erode –

Salem

IOC &

BPC JV458

1.53

4 Uran – Chakan HPC 168 1

Proposed Pipelines : 3320 7.5

1

Kandla - Mundra- Dahej -

Bhopal - Jhansi – Lucknow –

Gorakhpur

Industry

JV 2700 6

2Mangalore – Hassan –

CherlapallyHPC

620 1.5

Existing

Under Implementation

Proposed

Balasore

Rail Movement

Liberalised Wagon Investment Scheme (LWIS) - Procurement of own rakes to be operated in

pre-defined circuits

Movement of product:

- Movement of bulk LPG takes place in rakes - 1 Rake : 32 wagons

Capacity of each wagon : 37.6 MT

- Presently 32 rakes are in operation

Augmentation Plans:

- Target – To make it double by 2023-24

- Railway siding with Hub and Spoke model being explored

Truck Capacity Details

Particulars 306 & lower capacity 450 and above capacity

Industry 18613 6001 (32%)

Rate advantage Rs. 0.10 /Cyl/Km. Rs. 0.08 /Cyl/Km. (15-20% Saving)

Constraints in use of

higher capacity trucks

RGGLV Distributors (30%) Low capital – Needs load in

smaller package

Less space for manuverability in approach to godown

Hilly Region – Bigger capacity truck not feasible

LPG Bottling Infrastructure

TGET

IOC 9085

BPC3747

HPC3882

As on 01.01.2018

Bottling Capacity in TMTPA

As on 01.04.2021

Bottling Capacity in TMTPA

IOC14020

BPC6514

HPC5247

54% Bottling Capacity Addition

LPG Storage Infrastructure

TGET

LPG Tankage as on 01.01.2018 LPG Tankage as on 01.04.2021

• Average 7 days cover at Bottling Plants & Import terminals

• Plan under consideration to improve storage upto 10 days cover

Sources247 TMT

Import Terminals271 TMT

Plants 363 TMT Sources

250 TMT

Import Terminals334 TMT

Plants404 TMT

AGENDA

Introduction

LPG Demand & Supply Outlook

Opportunities for the World

LPG Logistics & Infrastructure

Opportunities for the World

Export of Butane, Propane and LPG-Mix to India

Construction of Import Terminal

LPG Terminalling and Storage

Development of LPG Pipelines

and other transport networks

Collaboration with OMCs / Port Authorities

for Development of LPG Jetty

Thank you