Can India Deliver on its Promise of LNG Demand Growth?...2019/10/02 · Abhishek Rohatgi Lead...
Transcript of Can India Deliver on its Promise of LNG Demand Growth?...2019/10/02 · Abhishek Rohatgi Lead...
Can India Deliver on its Promise of
LNG Demand Growth?
Abhishek Rohatgi Lead Analyst, South & Southeast Asia LNG Demand
Bloomberg New Energy Finance
0%
5%
10%
15%
20%
25%
30%
35%
-1% 4% 9% 14%
Share of gas in primary energy
GDP growth
China
India
World
South Korea
Japan
U.S.
Primary energy
demand
Gas has a low share in India’s energy mix
Natural gas’ share in primary
energy 2017, selected countries Gas demand, population and GDP per
capita in Asia, 2017
Source: World Bank, BP 2018 Statistical review Source: World Bank, BP 2018 Statistical review
1
10
100
1000
-1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5
GDP per capita ('00$)
China
Japan
Bangladesh
Pakistan
India
Vietnam
PhilippinesIndonesia
ThailandMalaysia
SingaporeAustralia
South Korea
Gas demand (bcm per million people)
Millionpeople
April 2, 2019
India’s gas market - a huge opportunity for industry?
Source: PTI, Bloomberg
April 2, 2019
India’s gas demand is supply constrained
Gas demand in India
14 15 16 15 16 15 15
18 17 16 16 15 16 18
6 6 6 5 5 7 9
2316
11 11 1112 12
0
10
20
30
40
50
60
70
FY2012 '13 '14 '15 '16 '17 '18
Bcmpa
Power City gas Industry Fertilizer
4640 35 33 31 31 33
1817
17 19 21 25 26
0
10
20
30
40
50
60
70
80
FY2012 '13 '14 '15 '16 '17 '18
Bcmpa
LNG imports Production
Gas supply in India
Source: Petroleum Planning and Analysis Cell Source: Petroleum Planning and Analysis Cell
April 2, 2019
Gas is no longer cost competitive in bulk generation
0
10
20
30
40
50
60
70
80
90
2018 2025 2030 2035 2040 2045 2050
$/MWh (real 2017)
Utility-scale PV Coal Onshore wind CCGT
0
10
20
30
40
50
60
70
80
90
2018 2025 2030 2035 2040 2045 2050
$/MWh (real 2017)
Utility-scale PV Coal Onshore wind CCGT
LCOE of new solar and wind vs
cost of new fossil plants in India
LCOE of new solar and wind vs cost of
running existing fossil plants in India
Source: BloombergNEF Source: BloombergNEF
April 2, 2019
But gas could be competitive in flexible generation
Source: BloombergNEF. Note: The LCOE range represents a range of costs and capacity factors. Battery storage systems (co-located and stand-alone) presented here have four-hour
storage. In the case of solar- and wind-plus-battery systems, the range is a combination of capacity factors and size of the battery relative to the power generating asset (25% to 100%
of total installed capacity). All LCOE calculations are unsubsidized. Categorization of technologies is based on their primary use case.
Levelized cost of electricity (LCOE) for India – 2H 2018
Bulk generation
Flexible generation
April 2, 2019
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
50
100
150
200
250
300
350
400
450
2015 2020 2025 2030 2035 2040 2045 2050
GW
Peaker gas Small-scale batteries
Utility-scale batteries Demand response
Other flexible capacity Share in total power mix
-
500
1,000
1,500
2,000
2,500
3,000
2014 2018 2022 2026 2030 2034 2038 2042 2046 2050
GW
Others Batteries Wind
Solar Peaker Gas Gas
Coal
Gas will provide ‘value’ but not ‘volume’ in power sector
Installed capacity in India Flexible capacity in India
Source: BloombergNEF Source: BloombergNEF
April 2, 2019
Gas is facing competition from electric vehicle in
transport sector
31%
25%
24%
20%
3.1Bcm
Three-wheeler
Passenger car
Bus
Taxi
Others
CNG consumption by vehicle
type in India, 2017
Timeline of EV cost parity versus CNG in India
Source: Petroleum Planning and Analysis Cell, India Source: BloombergNEF
April 2, 2019
Falling battery costs to make EV cheaper by late 2020s
Total cost of ownership (TCO) – Taxi Purchase price – taxis
Source: BloombergNEF
0
2
4
6
8
10
2017 18 '19 '20 '21 '22 '23 '24 '25 '26 '27 '28 '29 '30
$cents per kilometer
Diesel
CNG
EV
0
4
8
12
16
20
24
2017 '18 '19 '20 '21 '22 '23 '24 '25 '26 '27 '28 '29 '30
'000$
EV (Rest of Vehicle) EV (Battery)
Diesel CNG
Petrol
Source: BloombergNEF
April 2, 2019
0.0
1.9
3.8
5.7
7.6
9.5
0
2
4
6
8
10
2015 2018 2021 2024 2027 2030
Bcmpa
High
Base
Low
million NGV
CNG vehicle sales under pressure as electric vehicles grow
India’s gas demand from CNG vehicles (Low, base, high scenarios)
Source: BloombergNEF
BS VI is
implemented
EV sales start to
affect NGV
April 2, 2019
Industries consume most gas and LNG in India
LNG demand by sector, FY2018
Source: Petroleum Planning and Analysis Cell
0
10
20
30
40
50
60
70
FY2012 '13 '14 '15 '16 '17 '18
Bcmpa
Industry City gas Power
Source: Petroleum Planning and Analysis Cell. Note: ‘Industry’ includes fertilizer.
Gas demand in India
75%
15%
10%
19.5MMt
Industry City gas Power
April 2, 2019
Industry gas demand to increase 60% by 2030
32
7
6
6
51
0
10
20
30
40
50
60
FY2018 FY2030
Bcmpa
Refineries
Other industryFertilizer
Gas demand in industry in India
Source: BloombergNEF
April 2, 2019
Refineries to lead gas demand in industry sector
Under construction/planned pipeline
Under-construction LNG import terminal Operational LNG import terminal
Existing pipelineExisting refinery
Mundra
Dahej
Hazira
Kochi
Dhamra
Ennore
Dabhol
Jaigarh FSRU
New pipelines and LNG import
terminals will connect refineries
to gas supply
Jafrabad
Gas infrastructure and refinery map of India
Source: BloombergNEF, Petroleum Planning and Analysis Cell, Ministry of Petroleum and Natural Gas Source: The Hindu
April 2, 2019
Gas is needed to reduce air pollution in Indian cities
Source: Bloomberg
April 2, 2019
Gas use for industrial heating needs policy push
-12
-8
-4
0
4
8
12
0
4
8
12
16
20
24
FY2012 '14 '16 '18
Bcmpa $/MMBtu
Gas demand
LNG price – fuel oil price
LN
G p
rice
>
fuel
oil
price
LN
G p
rice
<
fuel
oil
price
Gas demand for industrial heating
and delivered fuel prices
Source: BloombergNEF, Petroleum Planning and Analysis Cell Source: Bloomberg
April 2, 2019
India LNG demand outlook
-
10
20
30
40
50
60
70
80
90
2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
MMtpa
Operational Under construction Planned
Proposed Demand Total contracts
India’s LNG demand, contracts and import terminals
Source: BloombergNEF April 2, 2019
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April 2, 2019