Theme

Gas key project profile

Sr. No. Particulars CRISIL View 1 Nature of Project Domestic exploration and production of gas 2 Existing Status GSPC has stakes in a number of EandP blocks in Gujarat and other parts of the country. Large number of blocks have been awarded While preparing the BIG 2020, a vision document, CRISIL has prepared the following project shelf in Gas sector.

Exploration & Production

Sr. No.	Particulars	CRISIL View
1	Nature of Project	Domestic exploration and production of gas
2	Existing Status	GSPC has stakes in a number of E&P blocks in Gujarat and other parts of the country. Large number of blocks has been awarded under various NELP rounds in various regions of Gujarat namely Cambay, Saurashtra & Kutchh comprising of onland & offshore blocks.
3	Proposal and phasing	The investments envisaged in the said activity have already been committed by various operators and is likely to be spread over the period till FY2020.
4	Benefits / Rationale	The main benefit would be increased availability of natural gas to the State through exploration and production efforts.
5	Linkages	Linked to the growing deficit for gas in the State and switching to clean source of energy in a time bound manner.
6	Cost / Investment in each phase	It is expected that around Rs. 24,300 Crores would be required to undertake the said activity in FY2020 timeframe. Till FY2010 – Rs.4,587 Crores By FY2012 – Rs.4,485 Crores By FY2017 – Rs.9,680 Crores By FY2020 – Rs.5,548 Crores
7	Implementation Strategy
A	Means of Finance	Equity by consortium partners
B	PPP / Non PPP	PPP / Private Sector
C	Project Structuring	The consortium members who manage the blocks are capable of making the necessary investments in exploration and production.

LNG Terminal Expansion – PLL, Dahej

Sr. No.	Particulars	CRISIL View
1	Nature of Project	LNG Terminal Expansion
2	Existing Status	Work underway to expand the LNG regas terminal at Dahej
3	Proposal and phasing	To expand the terminal capacity to 10 MMTPA by end of FY2009
4	Benefits / Rationale	The main benefit would be increased availability of regasification capacity to take care of the Tranche A volumes likely to be available from RasGas from FY2010 onwards and to allow additional flexibility in spot cargos and enter into additional long term contracts.
5	Linkages	The said expansion is likely to be linked to the commencement of Tranche A supplies from RasGas and increased availability of LNG in the world markets i.e. commissioning of incremental liquefaction capacity & expiry of existing LNG contracts.
6	Cost / Investment in each phase	It is expected that around Rs.600 Crores would be required to undertake the said expansion. Till FY2010 – Rs.600 Crores
7	Implementation Strategy
A	Means of Finance	Borrowings & Additional Equity by promoters
B	PPP / Non PPP	PPP
C	Project Structuring	PLL is owner and operator of the exiting terminal at Dahej and possesses requisite capability to execute the said expansion project.

LNG Terminal Expansion – Shell, Hazira

Sr. No.	Particulars	CRISIL View
1	Nature of Project	LNG Terminal Expansion
2	Existing Status	Work underway to expand the LNG regas terminal at Hazira
3	Proposal and phasing	It is proposed to expand the terminal capacity to 3.5 MMTPA from existing 2.5 MMTPA to meet the increasing demand for regasification by end users.
4	Benefits / Rationale	The main benefit would be increased availability of regasification capacity to allow additional flexibility to bring in spot cargos and if required, enter into long term contracts.
5	Linkages	None
6	Cost / Investment in each phase	It is expected that around Rs.300 Crores would be required to undertake the said expansion. Till FY2010 – Rs.300 Crores
7	Implementation Strategy
A	Means of Finance	Additional Equity by promoters
B	PPP / Non PPP	PPP
C	Project Structuring	Shell along with Total is the majority shareholder in the said terminal and operator of the existing terminal at Hazira and possesses requisite capability to execute the said expansion project.

New LNG Terminal – GSPC, Mundra

Sr. No.	Particulars	CRISIL View
1	Nature of Project	New LNG Terminal
2	Existing Status	Preliminary work underway to set-up the new LNG terminal at Mundra
3	Proposal and phasing	To set-up a new LNG regas terminal of 7.5 MMTPA capacity to cater to the growing demand for gas in Gujarat. It is expected that the said terminal would be commissioned in the FY2012 time frame with a capacity of 5 MMTPA and then would be expanded to 7.5 MMTPA in subsequent years. GSPC is likely to further expand this terminal by another 5 MMTPA to move towards its objective of 20 MMTPA regasification capacity by FY2020.
4	Benefits / Rationale	Increased availability of regasification capacity in the State to allow additional flexibility to bring in spot cargos and enter into additional long term contracts. This would also provide supply security to consumers in the State.
5	Linkages	The said project is linked to the world LNG market to ensure that the capacity availability is in line with the increased availability of LNG in the world markets i.e. commissioning of incremental liquefaction capacity & expiry of existing LNG contracts.
6	Cost / Investment in each phase	It is expected that around Rs. 4400 Crores would be required to undertake the said project. CRISIL envisages the terminal work to be completed in 36 months commencing from start of FY2010. Much of the cash outflow is likely to take place in the last 24 months when the majority of the equipment would be imported to India. Expansion of another 5 MMTPA may be made beyond FY2017 to cater to the expanding gas demand in the State which would be an additional investment of around Rs.3000 Crores. Till FY2010 – Rs.700 Crores By FY2012 – Rs.2,800 Crores By FY2017 – Rs.900 Crores By FY2020 – Rs.3,000 Crores
7	Implementation Strategy
A	Means of Finance	Borrowings & Equity by promoters
B	PPP / Non PPP	PPP
C	Project Structuring	GSPC is the main promoter and is likely to tie-up with technical partners to ensure that the project is executed efficiently.

New LNG Terminals – GSPC

Sr. No.	Particulars	CRISIL View
1	Nature of Project	New LNG Terminal
2	Existing Status	In planning stage
3	Proposal and phasing	GSPC plans to increase it regasification capacity to 20 MMTPA over the FY2020 timeframe to ensure supply security to its consumers in the State and also benefit form the new liquefaction capacities which are likely to get commissioned under the said timeframe. The siting and number of terminals (in addition to the terminal at Mundra) are still under discussion.
4	Benefits / Rationale	The main benefit would be increased availability of regasification capacity in the State to allow additional flexibility to bring in spot cargos and enter into additional long term contracts. This would also provide supply security to consumers in the State.
5	Linkages	The said project is linked to the world LNG market to ensure that the capacity availability is in line with the increased availability of LNG in the world markets i.e. commissioning of incremental liquefaction capacity & expiry of existing LNG contracts.
6	Cost / Investment in each phase	It is expected that around Rs. 6500 Crores would be required to undertake the said project. CRISIL envisages the terminal work to be completed in 36 months commencing from start of work. Also, the work on the said expansion of regas capacity would start only post FY2012. By FY2017 – Rs.3,500 Crores By FY2020 – Rs.3,000 Crores
7	Implementation Strategy
A	Means of Finance	Borrowings & Equity by promoters
B	PPP / Non PPP	PPP
C	Project Structuring	GSPC is likely to remain the main promoter of the said projects and is likely to tie-up with technical partners to ensure that the projects are executed efficiently.

City Gas Distribution Projects

Sr. No.	Particulars	CRISIL View
1	Nature of Project	Setting-up / Expanding city gas distribution network in various cities in the State
2	Existing Status	Commercial CGD network operations are underway in many of cities and pipeline laying work is also underway in a number of cities.
3	Proposal and phasing	Considering the increased availability of natural gas in the State from imports of LNG and KG Basin gas entering the State, the State Govt. is encouraging setting up of CGD networks in all major cities / demand centres in the State. It is envisaged that initially the stress would be on setting-up CGD networks in cities which are already connected to gas pipeline infrastructure and would be in a better position to service customer needs. Incremental investments would be made on a continuous basis in the existing CGD networks and new cities as the demand grows.
4	Benefits / Rationale	Availability of natural gas to all categories of consumers across the State and replacement of polluting liquid fuels with clean energy i.e. natural gas coupled with the economic benefit of replacing high priced liquid fuels with moderately priced natural gas.
5	Linkages	CGD network development is linked to the growth of pipeline infrastructure in the State. The development of the State Grid would determine the order of priority in which CGD networks are set-up in the State.
6	Cost / Investment in each phase	It is expected that around Rs. 250-300 Crores would be required for development of CGD network in each city. Initially, the investments would be higher to lay the main steel grid and then annual incremental investment would be required to expand the facilities to new areas in the city and setting-up additional CNG stations. Till FY2010 – Rs.1,492 Crores By FY2012 – Rs.1,684 Crores By FY2017 – Rs.5,128 Crores By FY2020 – Rs.1,596 Crores
7	Implementation Strategy
A	Means of Finance	Borrowings & Equity Infusion
B	PPP / Non PPP	PPP / Private Sector
C	Project Structuring	Each project would be structured based on specific requirements of the city. The implementation will be quite smooth as CGD is not very technology intensive and it will be supported by Central and State Governments.

Bulk Transmission Pipeline

Sr. No.	Particulars	CRISIL View
1	Nature of Project	Expanding the state gas grid
2	Existing Status	GSPL has made substantial investments in laying the state gas grid and a number of sections have already been commissioned and are in operation. The work to be undertaken in future is to extend the existing network to all districts of the State.
3	Proposal and phasing	Considering the increased availability of natural gas in the State from imports of LNG and KG Basin gas entering the State, the State Govt. is encouraging setting up of CGD networks in all major cities / demand centres in the State. To achieve the said objective, it would be necessary to ensure that all cities and districts have access to pipeline infrastructure & gas supply.
4	Benefits / Rationale	The main benefit would be availability of gas pipeline infrastructure to transport natural gas to consumers across the State as soon as availability improves leading to replacement of polluting liquid fuels.
5	Linkages	Pipeline development is linked to the increasing availability of natural gas in the State.
6	Cost / Investment in each phase	It is expected that around Rs. 6230 Crores would be required for completing the State Gas Grid thereby connecting all districts of the State with gas pipeline infrastructure. Till FY2010 – Rs.1230 Crores By FY2012 – Rs.1,000 Crores By FY2017 – Rs.2,500 Crores By FY2020 – Rs.1,500 Crores
7	Implementation Strategy
A	Means of Finance	Borrowings & Additional Equity by promoters
B	PPP / Non PPP	Non PPP
C	Project Structuring	Pipeline business not being very technologically advanced and with support from both the Central & State Government, it is not likely to face any implementation issues. The project structure would depend on the entity which lays the pipeline based on authorization received from PNGRB.