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Feasibility of Liquefied-to-Compressed Natural Gas Station (L-CNG) in India - A Unique Opportunity to Advance Natural Gas Market Penetration

  • ID: 4600998
  • Report
  • Region: India
  • Mergen Advisory
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Globally, the drivers for LNG adoption vary from region to region but are largely centred around environment, safety & reliability and economics with China, Japan and US as classic examples respectively. The Government of India’s (GoI’s) plan to double the share of natural gas in India's energy mix - from 6.5% in 2015 to 15% over the medium term as well as promote clean fuels for transport sector is perfectly aligned with the said global LNG adoption drivers and has resulted positive sentiments about India’s natural gas sector outlook.

India is increasingly becoming a sweet spot for LNG as suppliers and investors are investigating new strategies for penetrating deep into the Indian market and locking investments across gas infrastructure along the value-chain. Government led initiatives such as approval of LNG as a vehicle fuel, BS VI compliance, amendments in gas cylinder norms (to support storage and supply chain of L-CNG stations), PNGRB Round IX bidding with number of CNG stations as a bid parameter for 86 geographical areas, etc. are positive enablers in this direction.

On the LNG availability & supply front there are significant additions in re-gas capacity expected via. Greenfield and brownfield projects along Western, Southern and Eastern coast which may push total regas capacity from existing 27.5 mtpa to 65 mtpa by 2020.

The private sector looks equally enthusiastic, which is evident from positive private sector turnaround for CGD bidding, India’s first LNG FSRU at JSW Jaigarh Port by H-Energy and the most recently inaugurated India’s first L-CNG hub station at Waghodiya (designed & built by Express India Private Ltd., parent company named Cryogas Industry’s Group).

In terms of downstream gas market development, the L-CNG concept offers a unique opportunity for all stakeholders as it bypasses the need for a conventional gas pipeline (a historic challenge for early or rapid expansion and new gas market creation) and can result in rapid development of LNG corridors along India’s Golden Quadrilateral, North-South corridor, East-West corridor and National Highway network. With the proof-of-concept existing globally, players such as Chart Industries, Cryostar, Inox, Vanzetti, etc. already operating either in specific sub-components/modules or as package offerings.

L-CNG offers a risk diversification since dispensing of CNG or LNG is not only limited to four-wheelers and long-haul transport but can also pretty much cover railways, waterways and industrial consumption through hub-and-spoke model in India. Interestingly, the Indian Railway Organization for Alternate Fuels (IROAF) is spearheading diesel substitution technology to push CNG and LNG as locomotive fuel. All the same, the Inland Waterways Authority of India (IWAI) along with Petronet LNG (PLL) are targeting National Waterway - 1 (Ganga) for launching LNG barges by December 2018.

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1. Executive Summary
a. L-CNG Infrastructure & Operations
b. L-CNG Economics & Sensitivity Analysis
c. L-CNG Drivers

2. Present (2018), medium (2020) and long term (2030) outlook of Indian Natural Gas Sector
a. Natural Gas Industry Structure - Important authorities and their roles & responsibilities
b. Analysis of Natural Gas Infrastructure in India
i. LNG Terminals (Greenfield and Expansion, Sourcing/portfolio, Operating model, Fixed & Floating, Location)
ii. Gas Pipelines (regional network and cross-country pipelines authorizations and EOIs)
iii. CGD Projects (Pre-PNGRB, Round IX and future status)
iv. Small-scale LNG/L-CNG status
c. Natural Gas Demand-Supply Scenario
i. Total Demand Gap Universe of Natural Gas in India from 2018 to 2030
ii. Total Demand Gap of Natural Gas (on Pipeline Grid) in India from 2018 to 2030
iii. Total LNG Demand Gap Universe (basis RLNG terminal capacities) in India from 2018 to 2030
iv. Scenarios for Total Gap LNG Universe (balance of contracted LNG volumes) in India

3. Business performance & financial health of publicly listed Gas Sector Players in India:

- Business Environment, Business Models, Growth Drivers and Strategies adopted:
a. Petronet LNG
b. GAIL
c. IGL
d. MGL
e. BGL
f. Gujarat Gas

4. Case Study of Global Proof-of-Concept in L-CNG Station Operations
a. North America/USA
b. United Kingdom
c. Australia
d. Brazil
e. Sweden
f. India (Gujarat)

5. Key drivers & enablers for L-CNG Station adoption in India
a. PEST Analysis
b. SWOT Analysis

6. Introducing domestic & international players for L-CNG station development
a. OEMs for different critical components of L-CNG station
b. Technology providers
c. System integrators
d. Potential end users

7. Additional market opportunities for L-CNG Station
a. LNG as fuel for road transport: Long-haul and HEMM vehicles
b. LNG as fuel for marine transport: Barges & vessels for inland waterways
c. LNG as fuel for locomotives
d. LNG hub-and-spoke (Industry)

8. Technical analysis of L-CNG Station
a. Mapping of the L-CNG station operating process and comparison with conventional CNG dispensing station
i. Process flow
ii. Manpower & Skills
iii. Offtake, storage and dispensing (rate and scale)
iv. End-User Flexibility & Coverage (output range, types of vehicles, etc.)
v. Operating risks & hazards
vi. Utility requirement
b. Complete L-CNG station deconstruction
i. Major components and sub-components
ii. Critical & technically complex equipments
iii. Long lead-time items
c. Overview of technical specifications & potential range of service of the dispensed liquified
or compressed natural gas - Pressure & Saturation Point

9. Typical Feasibility of setting-up L-CNG station in India
a. CAPEX & OPEX breakup
i. L-CNG Station: Storage, Re-gas, Dispensing
ii. LNG supply logistics & transportation cost
b. Key assumptions for Financial Viability assessment as part of Financial Model
c. Financial Model covering P&L, Cash Flow, Balance Sheet, IRR

10. Financial Sensitivity Analysis
a. Exchange rate variation
b. Change in LNG Price/Margins
c. Change in L-CNG Station utilization
d. Change in project cost and operating cost

11. High level mapping of attractive locations/corridors for setting-up LCNG Station in India
a. Analysis of existing and evolving gas corridors (based on gas pipelines and CGD projects)
b. Analysis of major national highways and road corridors
c. Potential LNG supply source and ballpark destination

12. Key aspects in Project Management of L-CNG Station
a. Project scale and land area requirements
b. Deconstruction of typical timelines & key milestones for a L-CNG Station project
c. Technical complexity of process and components
d. Project risk analysis - Cost, Time, Market
e. Regulations & Codes for L-CNG station set-up and operations
f. Key enabling authorities

Note: Product cover images may vary from those shown
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