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Asia Days 2013 - Market opportunities for small LNG distribution
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Market Potential for Small Scale LNG Distribution
and Use in Asia
IN Information Day / Norshipping
6th June 2013 Oslo
Egil Rensvik
Science & Technology Counsellor
Royal Norwegian Embassy Singapore
Innovation Norway - South & SouthEast Asia
Source: Gasnor
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Asia
2
India
Vietnam
Indonesia
Singapore
UAE
South
Korea
China
Japan
Thailand
Malaysia
Innovation Norway in Asia
The Philippines
Taiwan
Sri Lanka
Saudi
Arabia
Iraq
Iran
Russia
Mongolia
Yemen
Nepal
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Innovation Norway -
The Commercial section of the
Royal Norwegian Embassy,
presence in Asia
• Tokyo
• Seoul
• Beijing
• Shanghai
• Hanoi
• Bangkok
• Kuala Lumpur
• Singapore
• Dhaka
• Delhi
• Abu Dhabi
• Jakarta
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Analysis of LNG Opportunities in Asian Countries
• Singapore
• Indonesia
• China
• India
• Bangladesh
• Philippines
• Vietnam
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• The S$1 billion (NOK3,8 billion) LNG
Terminal is located on a 30 hectare site
on Jurong Island
• Initial Capacity: 3 mill tons/yr
Can be expanded to 6 million
• Construction starts in 2009
• Operational in 2013
• Electricity Generating Co. Singapore
Power’s subsidiary PowerGas is awarded
the contract to build and run the
TerminalJurong Island
- Singapore’s Petrochemical Complex
Current Situation:
80% of electricity is generated using piped natural gas from Malaysia and
Indonesia
Balance 20% is from oil
Singapore’s First LNG Terminal
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Opportunities in Vietnam
PetroVietnam has set the target to import
the first LNG cargo by:
2015 for Thi Vai
2018 for Son My
The importation of LNG will diversify primary
energy sources used for power production,
reduce the dependance on coal and ensure
national energy security.
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Source: DNV, 2012
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Case Study Vietnam
-Small scale LNG milk-route
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Once LNG developments mature in the South, a large scale
LNG receiving terminal facility could be considered for the
North post 2020, opening up a second opportunity for an
LNG FSRU
Two LNG receiving terminals at both ends of the country
would make supplying LNG to growing demand centres along
the coast using small scale LNG vessels logistically possible
In one example scenario, a small scale LNG vessel (20,000
m3 – 50,000 m3) originating from the Southern facility
would drop off LNG cargoes in a milk run fashion at small
scale LNG receiving facilities along the coast before calling at
the Northern facility
After all cargoes have been dropped off, the vessel would
then call at the Northern facility, pick up fresh LNG cargoes
and double back along the same route
Source: DNV, 2012
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32%
10%52%
1%
5%
INDIA
Oil
Gas
Coal
Nuclear
Hydro
World vs. Indian energy scenario
34%
24%
29%
5%
7%
WORLD
Oil
Gas
Coal
Nuclear
Hydro
Source : BP Statistical Review, June 2010
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LNG Prospects in India
• India is the 4th largest Energy consumer after US, China & Russia.
• Primary energy consumption of India has more than doubled between
1990 and 2011.
• The Indian gas market is projected to be one of the fastest growing in the
world over the next two decades: the IEA forecasts gas demand to
increase at 5.4% per annum over 2007-30 reaching 132 billion cubic
meters by 2030.
• The power sector is the fastest growing area for energy demand,
increasing from 23 percent to 38 percent of total energy consumption
between 1999 to 2009.
• India and China represented a combined 12% LNG market share in 2012.
• The growing appetite for LNG in India and China resulted in 7.7% &
12.2% growth in LNG import in 2012
• Natural gas currently contributes 8% of total energy consumption and is
projected to grow up to 20% by 2030 in India.
Source:- International Energy Agency
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LNG in India beginning and
growth
• India began importing liquefied natural gas from Qatar in
2004 and increasingly relies on imports to meet domestic
natural gas demand gaps.
• In 2011, India was the 6th largest LNG importer with over
5.3% of the global imports.
• Gas consumption has grown at an annual rate of 10 percent
from 2001-2011
• The power sector and fertilizer sector drives the Natural Gas
Demand in the country. The government has identified
these as priority sectors, which ensures that they receive
larger shares of any new gas supply.
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LNG in India reserves and
network
• According to the Oil & Gas Journal, India had 43.8 Trillion
cubic feet of proved natural gas reserves at the end of
2012. About 30 percent of these are onshore reserves, while
70 percent are offshore reserves.
• The two most important companies operating India's large
gas pipeline system are GAIL and RGTIL. GAIL is a state
owned gas transmission & marketing company having 8000
km (Source:- CRISIL) gas transportation infrastructure.
Reliance Gas Transportation Infrastructure (RGTIL) is the
largest private sector gas transmission structure.
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Evolving Energy Mix- Increase
Share of GAS
Source:- GAIL
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Demand Supply Outlook of LNG
• Domestic natural gas supply to grow at a CAGR of 5.6 per cent over FY13-
15 while gas demand to grow at a CAGR of 17-18 per cent thus aggravating
the deficit situation.
• LNG imports are expected to increase at a CAGR of 19 per cent over FY13-
15 but will only partially meet the shortfall, despite huge LNG re-gasification
capacity additions planned in the next 5 years.
• India’s Gas demand supply gap projection necessitating import of LNG.
Year 2015 2020 2030
Gap in
demand
and supply
MMTPA
14.175 22.05 40.95
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Existing & Projected LNG Regas Capacity
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Existing LNG Terminals in India
Terminal Partners Capacity Supply source Start up
date
Dahej Petronet LNG (GAIL,
ONGC, Indian
Oil and BPLC (each
12.5%), GDF
Suez (10%), ADB
(5.2%) and private
shareholders (34.8%))
10 mtpa Qatar – long
term (7.5
mtpa)
March
2004
Hazira Shell (operator, 74%),
Total (26%)
3.5 mtpa Merchant
model
April
2005
Dabhol NTPC, GAIL, Indian
banks15 (28.3%
each) and the
Maharashtra state
Electricity Board
(15%).
5 mtpa
(1 mtpa
initially)
Possible:
Algeria, Qatar,
Australia,
Oman and Abu
Dhabi
2010
Total 18.5 mtpa
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Under Construction LNG Terminal
in India
Terminal Partners Capacity Supply source Start up
date
Kochi Petronet
LNG
2.5 mtpa 1.5 mtpa for 20 years from
Gorgon, Australia (2014-
15). Possibly Qatar, Papua
New Guinea
2012
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Planned LNG Terminals
Terminal Partners Capacity Start up date
Dahej exp Petronet LNG 2.5 mtpa March 2014
Hazira exp Shell, Total 6.5 mtpa TBN
Kochi exp Petronet LNG 2.5 mtpa 2014
Mundra Port GSPC (75%),
Adani Group
(25%)
6.5 mtpa 2012
Mangalore ONGC & IOC 5 mtpa 2012
Total 23 mtpa
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Planned LNG Terminals
Terminal Partners Capacity Start up
date
Pipapav Port Essar Group,
Swan Energy,
possibly
GSPC Gujarat
Pipavav Port
Ltd.
Intends to
become a
partner
5 mtpa 2013
Ennore TIDCO, IOC 5 mtpa 2017
Haldia Spice Energy 2.5 mtpa 2011
Total 12.5 mtpa 37
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Scope for Small LNG Tankers &
FSRUs
• Demand for natural gas across the country in
sectors such as town gas and transportation in
addition to Industrial use and imported LNG can
be an important source.
• Existing gas grid does not cover the entire
country, particularly the coastal regions.
• Delays in expansion of gas grid owing to right of
way problems & difficult terrain.
• Large coastline of about 7500 kms offers
opportunity for small LNG carriers and FSRUs.
• Construction of small LNG Terminals at Andaman
and Sri Lanka under consideration.
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Opportunities in India
India plans to double its use of natural gas (LNG and
CNG) over the next 10 years.
Currently, India has two LNG terminals and another two
under construction.
Small scale distribution will reduce the need of big
receiving terminals.
Beneficial in regions without any pipeline grids.
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Norwegian LNG-related companies are
distributed across the LNG value chain
Source: DNV
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Liquefied Natural Gas (LNG) as fuel for ships
Norwegian experience
The first LNG ferry Glutra 2000
Two Supply Vessels 2003 (Dual Fuel)
Two supply vessels 2009 (Dual Fuel)
Two supply vessels on order
Five LNG car ferries 2007
Three LNG car ferries 2009
Three LNG car ferries 2010
Seven new LNG ferries on order
Three military vessels in operation 2009
43. Höegh LNG – a fully integrated floating LNG service provider
Production Shipping Regasification DistributionExploration
LNG carriers LNG regasification vesselsFLNG
LNG: Liquefied Natural Gas
SRV: Shuttle and Regasification Vessel
FSRU: Floating Storage and Regasification Unit
Proprietary FLNG design
Principle approval for a FLNG
project in Papua New Guinea
Pre-feed agreement for an FLNG
at Tamar field in Israel
5 standard carriers in operation
1 carrier acquired with delivery
2Q 2012 (“LNG Libra”)
Purchase option for 1 carrier with
delivery 2H2013
(“STX Frontier”)
2 regasification vessels in operation
3 regasification vessels on order, of which 2 with long-term employment
secured
Options for additional regasification vessels
1 conversion candidate (“LNG Libra”)
44. Advantages of FSRU’s
Can be located near to key offtake loads (power
stations, heavy industry)
Scalable – add more vessel based storage without
regas capacity
Does not require large land tracts to be set aside
Shallow or deep water options available, all
proven mooring solutions
Significant savings in time and money
Simpler permitting
Moveable – can be used to build up market and
then move to new location
Base for small scale LNG distribution, no
modifications necessary
45. Advantages of using FSRU for small scale LNG
New FSRU projects are being specified to include
small scale capability
Simple in operational terms
Requires minor modification / upgrade to the
FSRU
FSRU ideal as LNG distribution centre:
Offshore (typically)
Easy access for small scale vessels
Either for point to point or milk run distribution
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* Combined cycle electric power generation plant located on side units
(Illust: Typically 220MW on each side unit)
* For delivery of both gas and electric power to shore
* Range of capacities: e.g. from 5 MW single units – to 2,000 MW gas power
stations w/ several modules
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Regas & Power Generation Terminal
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Bergen Group Fosen Shipyard
LNG Fuelled Ferry for Fjordline
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Concluding remarks
• Norway has demonstrated that small scale LNG production and
distribution is competitive as fuel for ships
• LNG is available world vide and can be further distributed to a
small scale market (industry, maritime)
• LNG is considered to be the main alternative fuel to fuel oils.
• Asia will be the new large market for Small Scale distribution
and Use of LNG.
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Thank you for your attention
Egil Rensvik@Innovationnorway.no
Singapore