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NATURAL GAS
Presented ByMihir Kaulgi 103Pratibha Sharma 134
NATURAL GASFlow Of Presentation
• Introduction• Manufacturing Process• Consumption • Production
– Reserves
• Trading Centers & Bourses• Influencing Factors• Contract Specifications (MCX-Futures)• Future Outlook
NATURAL GAS
Typical Composition of Natural Gas
Methane CH4 70-90%
Ethane C2H6
0-20%Propane C3H8
Butane C4H10
Carbon Dioxide CO2 0-8%
Oxygen O2 0-0.2%
Nitrogen N2 0-5%
Hydrogen sulphide H2S 0-5%
Rare gases A, He, Ne, Xe trace
What is Natural Gas ?
NATURAL GASManufacturing Process
Extracting
Processing
Transporting
Distributing
Quality Control
NATURAL GASManufacturing Process
NATURAL GAS
Natural Gas Consumption ( 2006 - 2030)
0 5 10 15 20 25 30
USA
Russia
Canada
Mexico
Japan
Australia/New Zealand
South Korea
China
India
Other non-OECD Asia
Trillion Cubic feet2006 2030
Consumption
NATURAL GASProduction
World Natural Gas Production
0
5
10
15
20
25
30
35
US
A
Can
ada
Mex
ico
Japa
n
Aus
tral
ia/
New
Rus
sia
Chi
na
Indi
a
Oth
erN
on-
Mid
dle
Eas
t
Afr
ica
Bra
zil
Oth
erC
entr
al &
Tri
llio
n C
ub
ic f
eet
-101234567
% C
han
ge
2006 2030 Avg Annual % Change
NATURAL GASWorld Reserves
NATURAL GASDemand & Supply in India
NATURAL GASRegion wise Production & Consumption
NATURAL GASProduction
NATURAL GASSector wise Demand
NATURAL GASInfrastructure in India
NATURAL GAS
Sr no.Pipeline Company Expected year of completion
Length (kms)
1 Dadri-Bawana-Nangal pipeline GAIL 2010-11 459
2 Chainsa-Gurgaon- Jhajj ar-Hissar pipeline GAIL 2011-12 449
3 Jagdishpur-Haldia pipeline GAIL 2012-13 2,050
4 Dabhol-Bengaluru pipeline GAIL 2012-13 1,370
5 Kochi-Kanjirkkod-Bengaluru/Mangalore pipeline GAIL 2012-13 1,110
6 Kakinada-Basudebpur-Howrah gas pipeline RGTIL 2012-13 1,100
7 Vijaywada-Nellore-Chennai pipeline RGTIL 2012-13 650
8 Chennai-Tuticorin pipeline RGTIL 2012-13 670
9 Chennai-Bengaluru-Mangalore pipeline RGTIL 2012-13 660
Source: CRISIL Research
Infrastructure in India
NATURAL GASProduction by India
Gas type 2008-09 E 2013-14 P
Price Vol Price Vol
$/mmbtu % share $/mmbtu % share
APM 3.3 60% 4.8 18%
Pvt/JV 6.2 20% 6.0 64%
CBM 4.6 0% 5.7 5%
LNG - firm 5.2 20% 8.7 14%
Weighted average firm supply
4.3 100% 6.2 100%
E: Estimate; P: Projected
Note
Firm gas supply is estimated at 93.2 mmscmd in 2008-09 and projected at 215.2 mmscmd in 2013-14.
Source: CRISIL Research
NATURAL GASProduction by India
NATURAL GASTrading Centers and Bourses
• New York Mercantile Exchange (NYMEX)– Price is based on delivery at the Henry Hub in
Louisiana
• Natural Gas Exchange (NGX), Canada • International Petroleum Exchange (IPE), UK• Multi Commodity Exchange of India Ltd (MCX),
India– World’s 2nd Largest exchange in terms of Natural Gas
futures contract (volume) traded – Almost 25% of volume of NG, NYMEX
NATURAL GASFactors influencing Market Price
Global Factors:◦ OPEC output and supply◦ Dollar fluctuation◦ US Natural Gas Inventory data◦ Geopolitics◦ Global Demand particularly from emerging sectors
Domestic Factors:◦ NELP policy by GOI◦ Demand from power and fertilizer sectors; the share is
expected to grow from the current level.◦ The sponge iron sector will have a share of 54% (by
2012), up from about 40% now. ◦ The transport sector is another important sector, as
use of CNG is expected to grow many folds.
NATURAL GASContract Specifications MCX Futures
NATURAL GASContract Specifications MCX Futures
NATURAL GASContract Specifications MCX Futures
Commodity Symbol
Contract Expiry
Unit PCP (Rs) Volume (in Lots)
OI (in Lots)
Natural Gas 25JAN2010 1 mmBtu 264.40 110 132
Natural Gas 28DEC2009 1 mmBtu 261.40 2897 645
Natural Gas 23NOV2009 1 mmBtu 244.30 46824 5186
Spot Price: Rs. 238.90 per mmBtuSpot Price: Rs. 238.90 per mmBtu
NATURAL GASFutures, NYMEX
NATURAL GAS
MCX - 28Dec2009 Futures Contract Price Movement
NATURAL GASFuture Outlook
At MCX, the futures of the further months are trading at a premium compared to the earlier month’s futures (FUTOCT<FUTNOV<FUTDEC)
Storage Congestions predicted to see a fall in the price in the Global market
Oil prices predicted to be bullish and expected to touch the $100 per barrel mark, with more bearish outlook for the Natural Gas
Industrial demand is expected to pick up. Still in the global space, supply is more than the demand
In India, the KG basin reserve find is expected to be much more than estimated and hence reducing the price, alongwith the import bill on Natural Gas.
Demand for LNG is high in the LNG importing countries like India, China.
NATURAL GASFuture Outlook
Titan……..Moon of Saturn has seas made of Pure LNG !
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