- According to the International Energy Agency (IEA), coal/peat account for nearly 40 percent of India’s total energy consumption, followed by nearly 27 percent for combustible renewables and waste. Oil accounts for nearly 24 percent of total energy consumption, natural gas six percent, hydroelectric power almost 2 percent, nuclear nearly 1 percent, and other renewables less than 0.5 percent. Although nuclear power comprises a very small percentage of total energy consumption at this time, it is expected to increase in light of international civil nuclear energy cooperation deals. According to the Indian government, nearly 30 percent of India’s total energy needs are met through imports
- IEA data for 2008 indicate that electrification rates for India were nearly 65 percent for the country as a whole. In urban areas, 93 percent had access to electricity compared to rural areas where electrification rates were approximately 50 percent. Roughly 400 million people do not have access to electricity in India
- According to Oil & Gas Journal (OGJ), India had approximately 5.6 billion barrels of proven oil reserves as of January 2010, the second-largest amount in the Asia-Pacific region after China. India’s crude oil reserves tend to be light and sweet, with specific gravity varying from 38° API in the offshore Mumbai High field to 32° API at other onshore basins.
- In 2009, India consumed nearly 3 million bbl/d, making it the fourth largest consumer of oil in the world. EIA expects approximately 100 thousand bbl/d annual consumption growth through 2011.
- Though the government has taken steps in recent years to deregulate the hydrocarbons industry and encourage greater foreign involvement, India’s oil sector is dominated by state-owned enterprises. India’s state-owned Oil and Natural Gas Corporation (ONGC) is the largest oil company and dominates India’s upstream sector. State-owned Oil India Limited (OIL) is the next largest oil producer. Other major state-run players include the Indian Oil Corporation (IOC) and the Gas Authority of Indian Limited (GAIL). In addition, the private Indian firm, Reliance Industries Limited, is becoming a significant operator in the oil sector and is the largest private oil and gas company in the country. Cairn India, a branch of UK-based Cairn Energy, and BG Exploration are also important private sector operators in the industry.
- As a net importer of oil, the Indian government has policies aimed at increasing domestic exploration and production (E&P) activities. As part of an effort to attract oil majors with deepwater drilling experience and other technical expertise, the Ministry of Petroleum and Natural Gas created the New Exploration License Policy (NELP) in 2000, which for the first time permits foreign companies to hold 100 percent equity ownership in oil and natural gas projects. Despite this, international oil and gas companies currently operate a small number of fields.
- The Petroleum and Natural Gas Regulatory Board (PNGRB) was constituted under The Petroleum and Natural Gas Regulatory Board Act, 2006 (NO. 19 OF 2006) notified via Gazette Notification dated 31st March, 2006.
- The Act provide for the establishment of Petroleum and Natural Gas Regulatory Board to protect the interests of consumers and entities engaged in specified activities relating to petroleum, petroleum products and natural gas and to promote competitive markets and for matters connected therewith or incidental thereto.
- Further as enshrined in the act, the board has also been mandated to regulate the refining, processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum products and natural gas excluding production of crude oil and natural gas so as and to ensure uninterrupted and adequate supply of petroleum, petroleum products and natural gas in all parts of the country.
- India’s downstream sector is also dominated by state-owned entities. The Indian Oil Corporation (IOC) is the largest state-owned company in the downstream sector, operating 10 of India’s 18 refineries and controlling about three-quarters of the domestic oil pipeline transportation network. Reliance Industries opened India’s first privately-owned refinery in 1999, and has gained a considerable market share in India’s oil sector.
- India produced roughly 880 thousand barrels per day (bbl/d) of total oil in 2009 from over 3,600 operating oil wells. Approximately 680 thousand bbl/d was crude oil, the remainder was other liquids and refinery gain.
- Most of India’s crude oil reserves are located offshore, in the west of the country, and onshore in the northeast. Substantial reserves, however, are located offshore in the Bay of Bengal and in Rajasthan state. India’s largest oil field is the offshore Mumbai High field, located north-west of Mumbai and operated by ONGC. Another of India’s large oil fields is the Krishna-Godavari basin, located in the Bay of Bengal. Block D6 in the Krishna-Godavari basin, operated by Reliance Industries, began oil production in September 2008.
- The primary mechanism through which the Indian government has promoted new E&P projects has been the NELP framework. The latest round of auctions, NELP VIII, was launched in April 2009 and attracted nearly $1.1 billion in investment. India currently plans to launch the NELP IX bidding round in the third quarter of 2010
- According to Oil and Gas Journal, India had approximately 38 trillion cubic feet (Tcf) of proven natural gas reserves as of January 2010. The EIA estimates that India produced approximately 1.4 Tcf of natural gas in 2009, a 20 percent increase over 2008 production levels. The bulk of India’s natural gas production comes from the western offshore regions, especially the Mumbai High complex, though the Bay of Bengal and its Krishna-Godavari (KG) fields are proving quite productive. The onshore fields in Assam, Andhra Pradesh, and Gujarat states are also significant sources of natural gas production.
- There have been several large natural gas finds in India over the last several years, predominantly offshore in the Bay of Bengal. ONGC announced a find in late 2006 in the Mahanadi basin off the coast of Orissa state, with an estimated 3 to 4 Tcf of reserves in place. In December 2006, ONGC announced a find of an estimated 21 to 22 Tcf of natural gas in place at the KG-DOWN-98/2 block off the coast of Andhra Pradesh in the KG basin. In addition, state-owned Gujarat State Petroleum Corporation (GSPC) holds an estimated 1.8 Tcf of natural gas reserves at the KG-OSN-2001/3 block in the KG area.
- Reliance Industries’KG-D6 block holds estimated reserves of 11.5 Tcf and came online in April 2009. Of the nearly 1.4 Bcf/d of initial production, nearly half went to gas based power plants, the rest to fertilizer, LPG plants, and city gas distribution entities. After reaching a production peak of 2.8 Bcf/d in December 2009, Reliance decided in July 2010 to cap production of KG-D6 at 2.1 Bcf/d pending resolution of infrastructure and field maintenance issues. The power sector continues to receive the lion’s share of production allotments. Production from the KG basin is expected to double the country’s current natural gas output in coming years.
- IndianOil is India's flagship national oil company with business interests straddling the entire hydrocarbon value chain – from refining, pipeline transportation and marketing of petroleum products to exploration & production of crude oil & gas, marketing of natural gas and petrochemicals. It is the leading Indian corporate in the Fortune 'Global 500' listing, ranked at the 98th position in the year 2011.
- According to IHS, India's crude oil pipeline network spans just under 4,000 miles and has a total capacity of 1.9 million bbl/d. Approximately 30 terminals, mostly on the northwest coast, take in crude oil imports. Pipelines run from these ports and producing areas (particularly from Gujarat) to major oil refineries in Gujarat, Mathura, Uttar Pradesh, and Haryana. On the eastern part of the country, pipelines run from West Bengal to the Paradip oil refinery. Refineries are generally located in coastal areas, because the majority of crude oil comes from tanker imports and offshore fields. Central and southern areas have few major pipelines, since the bulk of refining capacity is in the northwest and northeast.
- The Indian Oil Corporation (IOC) controls and operates the oil product pipelines and supplies most of the oil products going to the domestic market. Product pipelines cluster in the north and northeast parts of India, while central and southern areas must rely on oil distributed through other means, such as cargo trucks. IOC plans to build additional product lines to move supplies from refineries to growing demand centers, such as Jharkhand, Orissa, and Chhattisgarh.
- The two most important companies operating India's large gas pipeline system are GAIL and RGTIL. GAIL, the state-owned gas transmission and marketing company, operates the major gas pipelines in India: the 1,740-mile Hazira-Vijaipur-Jagadishpur (HVJ) line running from Gujarat to Delhi, and the 480-mile Dahej-Vijaipur (DVPL) line. Reliance Gas Transportation Infrastructure (RGTIL) is the biggest private investor in the gas transmission structure. RGTIL's East-West Gas Pipeline takes gas from RIL's Krishna-Godavari basin fields and pumps it to north and western Indian markets. Other players like Petronet and Assam Gas Company have significant pipeline investments servicing demand centers in northeast India.
- Insufficient pipeline infrastructure constrains natural gas demand in India. The country's own pipeline network primarily services the northwest region. Reliance Gas Transport Infrastructure (owned by RIL) brought the East-West pipeline online in 2009 to link the promising D6 gas field to industrial centers in the north and west regions of the country. Smaller companies such as Petronet LNG and GSPC have considered building their own pipelines to link production areas to the network. GAIL announced plans to extend the network with the Hazira-Bijapur-Jagdidhpur (HBJ) pipeline and a line from the D6 field to southern parts of India.
International Pipeline Projects
- The Indian government has considered importing natural gas via pipeline through several international projects, although many of these have proved unfeasible. In 2005, negotiations between the Indian and Bangladesh governments fell through over a transnational pipeline. In 2006, India left the Iran-Pakistan-India (IPI) pipeline project. However, the government still participates in a plan to import natural gas from Turkmenistan to India.
- The Turkmenistan-Afghanistan-Pakistan-India (TAPI) project, also known as the Trans-Afghanistan Pipeline, has seen a decade of discussion, although major geopolitical risks and technical challenges have prevented the project from starting in earnest. The Asian Development Bank estimates the cost of the pipeline at about $10-12 billion. However, the countries have made some progress in moving TAPI forward.
- The partners signed a framework agreement in 2010 and agreed on unified transit tariffs for the route in early 2012. In May 2012, India signed gas supply and purchase agreements with Turkmenistan. In early February 2013, India's government approved a special purpose legal entity to which participating members of the pipeline would contribute investment funds.
- India became the world's sixth largest liquefied natural gas importer in 2011. Indian companies have begun investing in new regasification facilities to meet rising demand.
- Liquefied natural gas (LNG) has become an important part of India's energy mix since the country began importing it from Qatar in 2004. In 2011, India became the world's sixth largest LNG importer, with 5.3 percent of global imports, according to data from PFC energy. Petronet, a joint venture between GAIL, ONGC, and several foreign firms, is the major importer of LNG supplies to India. Petronet owns the country's two currently operational LNG terminals, Dahej and Hazira, and plans to increase capacity at both plants.
- Unexpected production declines in India's D6 gas field mean the country must rely on higher LNG imports. Imported LNG is typically more than twice as expensive as domestically produced natural gas, because it is not subject to the government setting prices through the Administered Price Mechanism (see Sector Organization). Indian producers such as RIL have asked the government to raise the wellhead price for gas (the wholesale price at the point of production) as a way of justifying investment into deepwater projects.
- Indian companies have invested in increasing the country's LNG regasification capacity in recent years to meet rising demand. Petronet's LNG terminal at Kochi should be operational in 2013, according to India's Oil and Gas Ministry. GAIL, NTPC, and several other smaller players have restarted the Dabhol project, originally proposed by now-defunct Enron. On India's east coast, IOC proposed a project in Tamil Nadu. Other possible projects include a floating terminal in Kakinada as a substitute for declining gas production in the Krishna-Godavari basin.
- Qatar's RasGas is India's sole long-term supplier of natural gas, with two contracts for a total of 360 billion cubic feet (Bcf). India has been an active spot importer and received LNG cargoes from a variety of exporting countries. With the decline of the D6 field, Nigeria and Egypt have risen in prominence as India's short-term suppliers.
- India's government promotes the country's refining sector, and India became a net exporter of petroleum products in 2001. India has several world-class refineries in Jamnagar, and the refining industry is largely privately owned.
- India's government encouraged energy companies to invest in refineries, and the investment helped the country became a net exporter of petroleum products beginning in 2001. In particular, the government eliminated customs duties on crude imports, lowering the cost of fuel supply for refiners. These reforms made domestic production of petroleum products more economic for Indian companies. In its 11th Five-Year Plan (2007-2012), India's Government set the goal of making India a global refined product exporting hub.
- However, India still imports kerosene and liquefied petroleum gas (LPG) products for domestic use, and some export-oriented refineries began reorienting production for domestic use in 2009 to help ease demand shortages of motor gasoline, distillate fuel oil, kerosene, and LPG. These products make up over 60 percent of India's petroleum product consumption, according to the IEA. In particular, many rural areas of India use LPG and kerosene along with traditional biomass as cooking fuels.
- Today, the refining industry is an important part of India's economy and is largely privately owned. At the end of 2012, India had a refining capacity of 4.3 million bbl/d, according to the Oil & Gas Journal, making it the third largest refiner in Asia after China and Japan. The two largest refineries by crude capacity are world-class export facilities and are privately owned. They are located in Jamnagar and together account for 30 percent of India's total refining capacity. These refineries are close to crude producing regions in the Middle East, which allows them to take advantage of lower transportation costs.
- For more information Petroleum Oil Refineries in India
Refineries in India
Indian Oil Refineries
- Bongaigaon Refinery , 48,000 bbl/d
- Barauni Refinery , 116,000 bbl/d
- Digboi Refinery (IOC), 13,000 bbl/d
- Gujarat Refinery (IOC), 170,000 bbl/d
- Guwahati Refinery (IOC), 20,000 bbl/d
- Haldia Refinery (IOC), 116,000 bbl/d
- Mathura Refinery (IOC), 156,000 bbl/d
- Narimanam refinery 20,000 bbl/day
- Panipat Refinery (IOC), 240,000 bbl/d
- Chennai Refinery (CPCL), 185,000 bbl/d
- Essar Vadinar Refinery (Essar), 240,000 bbl/d
- Jamnagar Refinery I (Reliance Petroleum), 660,000 bbl/d
- Jamnagar Refinery II (Reliance Petroleum), 580,000 bbl/d
- Kochi Refinery (Kochi Refineries Ltd), 172,000 bbl/d
- Mangalore Refinery (MRPL), 190,000 bbl/d (30,000 m³/d)
- Mumbai Refinery (HPCL), 107,000 bbl/d
- Mumbai Refinery Mahaul (BPCL), 135,000 bbl/d
- Nagapattnam Refinery (CPCL), 20,000 bbl/d
- Numaligarh Refinery Limited (NRL), 58,000 bbl/d
- Tatipaka Refinery (ONGC), 1,600 bbl/d
- Visakhapatnam Refinery (HPCL), 150,000 bbl/d
Indian Refining Projects
- In 2009, privately-owned Reliance Industries added another refinery to its Jamnagar complex to raise the entire complex’s refining capacity from 660,000 bbl/d to 1.24 million bbl/d. The Jamnagar complex is the largest oil refinery complex in the world.
- Other key upcoming refinery projects include Essar Oil’s Vadinar refinery expansion of 110,000 bbl/d in 2011, 120,000 bbl/d greenfield refinery in Bina in 2011 by a joint venture between Bharat Petroleum Corporation Limited and Oman Oil Company Limited, a 180,000 bbl/d grassroots refinery in Bhatinda in 2014 by Hindustan Petroleum Corporation Limited, and IOC’s grassroots Paradeep refinery of 300,000 bbl/d in 2015.
- India is slated to add 840 thousand bbl/d of refining capacity through 2015 based on currently proposed projects.
- Due to expectations of higher demand for petroleum products in the region, further investment in the Indian refining sector is likely. As part of the country’s 11th Five Year Plan from 2007 to 2012, the government would like to promote India as a competitive refining destination, and industry experts expect the country to be an exporter of refined products to Asia in the near future
Complete List of Indian Refinery Projects
- Allahabad Refinery Project, BPCL new plant
- Barmer Refinery Project, ONGC/Rajasthan new plant
- Bina Refinery Project BPCL / Oman oil new plant India Ennore,
- Chennai Refinery Project, Chennai Petroleum Corporation Ltd (CPCL) new plant
- Guru Gobind Singh Refinery Project HMEL new plant
- Gujarat Refinery Upgrade Project, IOCL
- Haldia Refinery Project Cals Refineries, Relocation
- Mangalore Refinery Project, MRPL, Expansion & Upgrade
- Panipat Refinery Expansion Project IOC, Expansion & Upgrade
- Paradip Refinery Project, IOC, Expansion & Upgrade
- Tamil Nadu Refinery Project NOCL new plant
- Vadinar Refinery Project, Essar Oil expansion
- Visakhapatnam Refinery Project HPCL new plant
- EIA, India
- Ministry of Petroleum and Natural Gas
- Directorate General of Hydrocarbons
- Refineries in India
- The Petroleum and Natural Gas Regulatory Board (PNGRB)
- Association of Oil & Gas Operators (AOGO)
- Google earth map of oil and gas infrastructure in India (incomplete)