Theme Session -1 held on ‘Natural Gas: Road towards cleaner and prosperous future’

The second day of PETROTECH-2016 commenced with the first theme session on ‘Natural Gas: The road towards cleaner and prosperous future’. The session was chaired by Mr. Tom Albanese, CEO, Vedanta Resource and was moderated by Ms. Mary Hemmingsen, Global Head LNG, KPMG. The distinguished speakers of the session included Mr.Hamad Mubarak Al Muhanndi, CEO, RasGas;Mr. Richard F. Guerrant, VP LNG, ExxonMobil Gas & Power Marketing Company;Mr.FrédéricBarnaud, Chief Commercial Officer, Gazprom Marketing & Trading;Mr. A.P Sawhney, Addl. Secretary, MoPNG;Mr.Prabhat Singh, CEO & MD, Petronet LNG;Mr. James Rockall, CEO and Managing Director, World LPG Association and Dr. R.K Malhotra, Director General, Petroleum Federation of India.

Opening the discussions, Ms. Mary Hemmingsen, Global Sector Leader LNG, KPMG, spoke about Gas and its role in clean energy systems. She talked about the terms and conditions of gas being the cleaner fuel choice of for power, transport and chemical industries. She emphasized that the role for gas and renewables will vary between jurisdictions and be dependent on the policy choices made in different countries. Highlighting the growing penetration of gas and the new emerging global trends in global gas markets, she also shared the prerequisites for development of LNG Future markets. In her concluding remarks,Ms.Hemmingsen shared the road map for India’s Gas markets by highlighting the elements required to create adequate infrastructure, appropriate market and institutional frameworks to best utilize emerging global gas opportunities.

Taking the discussions forward, Mr.Hamad Mubarak Al Muhanndi, CEO, RasGas, said that “India and Qatar have a strong long-standing relationship”. He mentioned that LNG is a valued fuel option for India as well as the world. While coal may be cheap, the environmental and health cost associated with it is not acceptable. Commending the Indian companies for taking excellent initiatives for increasing the use of gas in the country, he said, “India needs to needs to address the key infrastructure challenges (pipelines and LNG re-gas terminals, in particular) in order to move towards a Gas Based Economy”. Tax regime remains a key financial barrier to the national gas trades, he added. In his concluding remarks, he mentioned, “Rasgas is keen to strengthen the long term relationships with India and focussed to provide reliable and flexible energy to India”.

Addressing the delegates, Mr. Richard F. Guerrant, VP LNG, ExxonMobil Gas & Power Marketing Company, shared that the overall supply in LNG market has surpassed demand, and the global gas market is expected to remain over supplied in the near future. With their per capita GDP becoming triple between now and 2030in the near future, India and China are expected to have more energy demand. Mr.Guerrantspoke of four kinds of LNG markets namely 1) established markets such as Japan, Korea, Taiwan, India and China; 2) New LNG markets such as Indonesia, Pakistan etc.; 3) Emerging markets such as Bangladesh, Vietnam etc.; 4) Innovative markets such as Jordan, South Africa, Egypt etc. In his address, he mentioned that meeting LNG demand is not easy and highlighted the fact that financing and allocation of risk is a roadblock for future projects. However, to overcome these roadblocks the buyers and sellers should talk about this. He emphasized on the need for policy support in India. In his concluding remarks, he emphasized the strong relationship between the seller and buyer as a critical factor for development of LNG projects.

In his remarks and presentation, Mr.FrédéricBarnaud, Chief Commercial Officer, Gazprom Marketing & Trading, said that Gazprom M&T has a long standing and active relationship with India in the areas of Oil, LPG and LNG. He emphasised the fact that the total gas trade in the EU has witnessed emergence of new gas hubs and an increase by over six times in 10 years form ~600 BCM in 2005 to ~3731 BCM and. He said that Natural gas hubs are essential for local supply demand balancing and enables markets to be responsive to local factors in a global context. He emphasised that ability to trade and physically flow gas acts as catalyst for development of gas markets. India;having a large demand potential in the context of its expected future economic growth, with emerging multiple import options, and availability of indigenous production; can emerge a potential global gas hub which will bring in immense value to the end-consumers and suppliers.

In his address, Mr. A.P Sawhney, Addl. Secretary, MoPNG, said that the Government of India is focussed on providing clean energy access to its 1.2 billion population. He added that natural gas, which so far has played limited role (only 6.5% of India’s total primary energy consumption), has enormous potential for the future. The Ministry of Petroleum and Natural Gas (MoPNG) is focussing on three areas:i) increasing the availability of natural gas (indigenous and imported LNG); ii) improving the pipeline and city gas distribution infrastructure; and iii) enabling consumer markets to switch to gas. Early this year, government freed up the marketing and pricing regime for natural gas that would be produced in future under the HELP policy. Further, it allowed a higher ceiling price for production from high pressure high temperature (HPHT), deepwater and ultradeepwater gas fields. This has enabled major investment decisions by ONGC in the Deepwater fields in the KG Basin. He also said that India plans to double its existing pipeline network to 30,000 Km in next five years as government plans to connect the eastern and southern parts of the country to the national gas grid. He concluded by saying, “India is not only a market for natural gas but also a favourable investment destination with an estimated investment potential of $100 billion by 2022”.

Addressing the delegates, Mr.Prabhat Singh, CEO & MD, Petronet LNG, shared his views on availability of Oil & Gas globally. He mentioned that only 4% of the oil &gas reserves are exploited globally and with the advent of new technologies, the recoverability of hydrocarbons are improving continuously making enough oil &gas available for future. Unlike Oil, natural gas is a complimentary fuel to renewable energy and would sustain for long alongwith renewables. He highlighted the need for having more regasification terminals in future. He said that recently,Petronet has launched an LNG-fuelled bus in Kochi. He added, “We see a huge potential for green mobility nation-wide. Currently, around 70 MT of HSD is consumed in India, of this 28 MT is consumed by trucks and buses. Even if a part of the new fleet that gets added every year is converted to LNG, the potential could be of order of 7 MTPA of LNG demand. In his concluding remarks, he said that the LNG based vehicles present a huge opportunity for LNG demand in India.

In his address and presentation, Mr. James Rockall, CEO and MD, World LPG Association, saidthat 3 billion people rely on wood, coal & do not have access to clean energy. Our cities are becoming unbearable due to outdoor pollution. There is a need to provide clean energy to people. Mentioning that there was a lot of synergy between LPG and LNG, he said, “The world has significant future energy challenges. LPG and LNG can address many of them now. LPG supply is increasing and price is easing. Opportunities for gas development will start with LPG. Together, the gas industry can realise the opportunities,” he added. In his concluding remarks he mentioned that joint advocacy for gas is key to create enabling policy environment and consumer demand.

In his address, Dr. R.K Malhotra, Director General, Petroleum Federation of India, presented the details of #Gas4India campaign. He said that the campaign is aimed at promoting the use of gas in the country and various public and private sector companies have joined hands to promote the natural gas sector. The campaign includes unified cross-country, multimedia, multi-event campaign, social engagement via Twitter, Facebook, Youtube, LinkedIn, and its official blogsite, as well as hyper local, offline events to directly connect with consumers through discussions, workshops and cultural events.