Marketing of small scale LNG serving remote users

Group 5

MBA (E&I)

Group Members

Darshit Paun 20131010

Joy Barot 20131016

Raman Shahi 20131040

Siddhartha Bhatnagar 20131051

Swapnil Rayjada 20131054

1

Contents Introduction .................................................................................................................................................. 2

Petronet LNG Limited ................................................................................................................................... 3

Vision Statement ....................................................................................................................................... 3

Mission Statement .................................................................................................................................... 3

Taral Gas ................................................................................................................................................... 4

Customers ................................................................................................................................................. 4

Business Components ............................................................................................................................... 4

Inox India Ltd. .............................................................................................................................................. 6

Vision ........................................................................................................................................................ 6

Mission ...................................................................................................................................................... 6

Company Profile ........................................................................................................................................ 6

GoLNG ....................................................................................................................................................... 7

GoLNG Facilities ........................................................................................................................................ 7

LNG Express India Private Limited ................................................................................................................ 9

Vision ........................................................................................................................................................ 9

Mission ...................................................................................................................................................... 9

Company Profile ........................................................................................................................................ 9

Costing Aspects for Small Scale LNG ........................................................................................................... 11

Conclusion ................................................................................................................................................... 14

2

Introduction

The current domestic production of natural gas has been plummeting. To meet the industrial

demand of natural gas, the country has developed a number of LNG terminals in Western India.

Due to the lack of pipeline infrastructure, there is a scope for RLNG through cryogenic tanks to

the small scale industries in the remote locations.

This study was conducted in the form of secondary research to study the scope of small scale

LNG beyond the pipeline network in the vicinity of LNG terminals in India. The study covers

the operations of three such firms in the vicinity of Gujarat, Madhya Pradesh, Maharashtra, and

Rajasthan (Vicinity of the LNG terminals)

3

Petronet LNG Limited

Vision Statement

"To be a key energy provider to the nation by leveraging company’s unique position in the LNG

value chain along with an international presence”

Mission Statement

Create and manage world class LNG infrastructure

Pursue synergetic business growth opportunities

Continue excellence in LNG business

Maximize value creation for the stakeholders

Maintain highest standards of business ethics and values

Commencement of Commercial Operations - April, 2004

As the Kochi LNG Plant faces problem of under plant utilization due to delay of commencement

of Kochi Bangalore pipeline, It is facing tough time in meeting the financial projection.

4

Taral Gas It is the trade name of the LNG supplied by road tankers. The Company has launched its product

under the generic brand name “TARAL GAS”- the New Age Fuel, through LNG satellite hubs/

stations that will serve the industries which are not connected through pipelines, heavy

automotives on highways, housing complexes etc. Commencement of the brand on 25th

September 2014.

Customers

In its pilot project, Petronet LNG had successfully supplied Taral Gas to HLL Lifecare

plant in Thiruvananthapuram in September. At present, Petronet LNG has three trucks

with a capacity of 8-9 tonnes each for the retail supply of the fuel in the state.250 km

distance from the port.

At present, 20 trucks of Petronet LNG are operating daily in North India, carrying fuel to

various consumers from its LNG terminals in Gujarat.

Currently about 4-5 trucks are loaded on daily basis & total of around 2000 trucks have

been loaded till date.

Facility can handle 2500 loadings / Yr.

Presently LNG (by road tanker) is being sold to limited consumers in Western region.

Fast developing market with several new consumers (up to 800 KMS) are being lined up

for off-take of LNG for industrial and city gas use.

Business Components Following are the main components for the LNG at Doorstep business –

1) LNG tanker loading facility.

2) Cryogenic LNG road tankers.

3) LNG Storage & re-gasification facility at customer location generally called LNG Satellite

station.

5

6

Inox India Ltd.

Vision

To be the world's best integrated cryogenic solutions enterprise with leadership position across

the products and markets, exceeding customer & stakeholder expectations.

Mission

To reach the acme of perfection by updating our technology and expertise in our concerned arena

rendering maximum satisfaction to our clients.

To achieve this using all energies, developing and implementing leading edge technologies and

drawing on both to deliver effective world-class solutions to customers.

Ascertain clients to offer them superior quality products by continuously maintaining the high

quality levels with the implementation of stringent checks on regular basis.

Company Profile

INOX India limited, a part of US$ 2 billion capital INOX group of companies, is a globally

acclaimed company offering comprehensive solutions in cryogenic storage, vaporization and

distribution engineering. Headquartered in Vadodara, INOX India has grown to become a market

leader in the highly challenging field of vacuum insulated cryogenic equipment in India and

across the world.

INOX India has created a wide-ranging Portfolio of materials and engineering intellectual

property that include:

Cryogenic standard products

Cryogenic engineered tanks & systems

Large ASU SVD projects

Cryogenic scientific projects

Cryobiological products

LNG Turnkey Solutions

Disposable Cylinders

Other Products for OEMS

INOX India Limited is equipped with two ultra-modern facilities spread over 78151m2 and

covered area of 25,500m2 located at Kalol, near Vadodara and Kandla – a port located at

Gandhidham (Gujarat).

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INOX India’s strengths lie in shop fabrication of critical components, professional project

management and efficient supervision of site construction. With the strong backbone of

employee resources in engineering, project management, manufacturing and other key functions,

INOX India delivers projects with total customer satisfaction in stipulated time.

GoLNG

GoLNG is transported or distributed by transportation tanks unlike PNG which is transported by

trunk lines and piped network. On-site storage tank is applicable in case of GoLNG.

Regasification takes place at the site rather than at the LNG terminal. The maintenance is

restricted to on-site facility and transport tanks and it affects to a single customer only. The costs

are low on capex for facility but the transportation costs are relatively higher than in PNG. The

total costs may vary for customers in the same area therefore. Unlike lead times for new network

of 10-12 months for PNG, GoLNG will have only 4-8 months.

GoLNG Facilities

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9

LNG Express India Private Limited

Vision

“Cryogas Industries” aims to provide complete spectrum of Equipment, Services & total

solutions for cryogenics installations, turnkey projects & custom built solutions.

Mission

Cryogas Industries is committed to cool the planet earth with futuristic technologies catering

aspirants by Cryo energy.

Company Profile Obtained license from PNGRB for marketing of natural gas through Liquefied Natural Gas

(LNG) route to industrial and commercial customers on 26th Feb, 2013, by transporting LNG in

cryogenic tankers.

The areas shown in the diagram below were included for marketing:

Currently LNG regasification stations are present at Bhopal, Mandideep and Baroda.

The upcoming LNG Express LNG/CNG station at Waghodia in Baroda will offer tailor made

solution to supply Natural Gas at customers door step.

10

It offers customers a very small consumption of a few Cubic Meters a day to a few Metric Tons a

day:

Micro Users Mini Users Medium Scale Users

Quantum Users

NG filled at 250 bar in cylindrical pallets for daily requirement

NG filled at 250 bar in cylinder banks and micro-bulk solutions

NG filled at 250 bar in cylinder cascades LNG mini-bulk storage tanks

For users requiring in bulk quantity

11

Costing Aspects for Small Scale LNG

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Conclusion

• Users don’t need to wait for natural gas pipelines to switch to a cleaner alternative

• New terminals coming up are providing for road distribution of LNG

• LNG/RLNG marketers need to build distribution systems in their business models

• Active government & regulatory support is needed to increase natural gas footprint