LPG Markets in the Indian
Sub-Continent
WLPGA Indian Sub-Continent Regional Summit
Walter M. Hart, Ph.D., P.E.
February 15, 2012
Taj Mahal Hotel, New Delhi, India
Agenda
• Population
• Sub-Continent LPG Demand, Supply and Trade
• Prospects for LPG Demand Growth
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Purvin & Gertz NGL Publications, Seminars
and Workshops
Short-Term Reports
Long-Term Reports
Global LPG
LPG Market Outlook
World LPG Market Outlook
North America NGL
LPG Market Outlook
North America NGL Industry
Latin America LPG
LPG Market Outlook
Latin America LPG Study
Asia Light Naphtha
Asian Petrochemical
Feedstocks Market Outlook
5-Year East of Suez Market
Outlook
NGL Workshops Offered at Each Seminar
Annual LPG Seminars
Fundamentals of LPG Markets
Woodlands, TX March 5-7
Understanding NGL Feedstock Economics
Singapore
June 18-20
Lima, Peru
November 12-14
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Indian Sub-Continent Region
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4
Population Comparison to World
Rank
World
Indian Sub-Continent
2
6
9
45
46
56
165
India
Pakistan
Bangladesh
Nepal
Afghanistan
Sri Lanka
Bhutan
Population
Millions % of World
6,871
1,604
23.3%
1,210
179
142
27
24
21
1
17.6%
2.6%
2.1%
0.4%
0.4%
0.3%
0.0%
Source: Wikipedia
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The Sub-Continent Has a Relatively Rural
Population
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6
But Sub-Continent Population Density Is
Among the Highest in the World
Number of people per square kilometer
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The Sub-Continent Uses Less LPG
Than Much of the Rest of the World
World
Sub-Continent
India
Pakistan
Bangladesh
Nepal
Afghanistan
Sri Lanka
Bhutan
Population
Millions
6,871
1,604
1,210
179
142
27
24
21
1
2011
LPG Demand
% of World MM Tonnes % of World kg/capita
237.5
35
23.3%
15.5
6.5%
10
17.6%
2.6%
2.1%
0.4%
0.4%
0.3%
0.0%
14.7
0.7
0.0
0.0
0.0
0.0
0.0
6.2%
0.3%
0.0%
0.0%
0.0%
0.0%
0.0%
12
4
0
0
0
1
0
•India dominates the Sub-Continent LPG demand
Source: Wikipedia
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Million Tonnes LPG Demand
LPG Demand in the Sub-Continent is
Growing Very Rapidly
2011
20
0%
18
0%
1%
1% 1%
5%
16
14
12
10
8
6
4
2
0
1995
Bhutan
Nepal
India
2000
2005
Afghanistan
Sri Lanka
2010
Bangladesh
Pakistan
92%
2015
Bhutan
Nepal
India
Afghanistan
Sri Lanka
Bangladesh
Pakistan
Residential / Commercial LPG is subsidized in India
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The Residential / Commercial Market
Dominates the Sub-Continent LPG Demand
Million Tonnes LPG Demand
2011
20
0%
2%
2%
18
16
14
12
10
8
6
4
2
0
1995
2000
2005
2010
Other
Engine Fuel
Industrial
Residential / Commercial
2015
96%
Other
Engine Fuel
Industrial
Residential / Commercial
Residential / Commercial market uses about 70% butane
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Million Tonnes LPG
The Autogas Market Is Relatively Small But
Growing Rapidly
0.35
0.30
Engine Fuel
0.25
0.20
• Mostly in India
0.15
• 3-wheelers and
0.10
0.05
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
0.00
passenger cars
• Has OEM support
• <3.5% of all Indian
vehicles run on LPG
• More than 900 filling
stations and growing
Photo Credit: Indian Autogas Coalition
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Millions of Tonnes of LPG
Indigenous Supply from the Sub-Continent
Is Far Short of Demand
20
Supply
Demand
18
• Sub-Continent demand
growth is much higher
than supply growth
• The supply shortage was
less than 2 million tonnes
per year until about 2003
• The current LPG supply
shortage is more than 5
million tonnes per year,
and is likely to grow to
nearly 8 million tonnes
per year by 2015
16
14
12
10
8
6
4
2
0
1995
2000
2005
2010
2015
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Sub-Continent Indigenous LPG Supply is
Nearly All from India and Pakistan
Million Tonnes LPG Supply
2011
20
0%
18
0% 0%
0%0%
6%
16
14
12
10
8
6
4
2
0
1995
Bhutan
Nepal
India
2000
2005
Afghanistan
Sri Lanka
2010
Bangladesh
Pakistan
2015
94%
Bhutan
Nepal
India
Afghanistan
Sri Lanka
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Bangladesh
Pakistan
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Most Indigenous LPG Supply in the SubContinent Is Produced in Refineries
Million Tonnes LPG Demand
2011
20
18
16
24%
14
12
10
8
6
4
2
76%
0
1985
1990
1995
2000
Natural Gas
2005
2010
Refineries
2015
Natural Gas
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Refineries
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Million Tonnes LPG
Nearly All of the Sub-Continent LPG Shortage Is
Supplied Through Waterborne Imports
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Waterborne Energy Sub-Continent Imports
India Shortage
Pakistan Shortage
Sri Lanka Shortage
Nepal Shortage
Bangladesh Shortage
Afghanistan Shortage
5
4
3
2
1
0
2003
2004
2005
2006
2007
2008
2009
2010
2011
• Waterborne LPG imports arrive in India, Pakistan and Sri Lanka
• A relatively small amount may be provided via truck from Iran and the CIS
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4.0
100%
Propane
Butane
pct butane
3.5
90%
80%
3.0
70%
2.5
60%
2.0
50%
1.5
40%
Million Tonnes LPG
Million Tonnes LPG
Imported Waterborne LPG is Predominantly
Butane Sourced From the Middle East
6
5
4
3
2
1
30%
0
1.0
20%
0.5
2003
2005
2007
2009
2011
10%
0.0
0%
2003
2005
2007
2009
2011
Saudi Arabia
Kuwait
Other
Abu Dhabi
Iran
Qatar
Malaysia
Source: Waterborne Energy
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Residential / Commercial LPG Consumption Is
Increasing Rapidly on a Per Capita Basis
9
Kg per Capita
8
7
6
5
4
3
2
1
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
2009 Regional KG/Capital Data
High: North America
Low: Indian Subcontinent
World Average:
46.60
8.10
17.47
But is still relatively (very) low…
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Rural Households in India Appear to Be
Replacing Firewood With LPG
15%
• Rural Households (72%)
Firewood
1%
1%
Crop Residue
1%
Cowdung
Cake
Coal
firewood, 6% LPG
12%
58%
12%
• Source IOC, 2009
• 2001 Census showed 63%
• Urban Households
• 2001 Census showed 48%
LPG, 19% kerosene, 22%
firewood
Kerosene
• Low natural gas
Electricity
• Low electricity Natural
Gas
LPG
Others
LPG
Kerosene
Residential/Commercial Fuel Ladder
Charcoal
Firewood
Cow dung
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Sub-Continent GDP per Capita Is Among
the Lowest in the World, But Improving
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India Is Improving Their LPG
Infrastructure
• Attempting to increase rural LPG connections by
10 million customers per year
• Adding 60 million cylinders/ regulators by 2015
• Upgrading bottling capacity
• Adding nearly 300,000 tonnes of storage capacity
• 3100 km of LPG Pipelines
• 2 import facilities to add a total of 1.2 million tonnes
per year of import capacity
• New refineries
Source: IOC, 2011
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Important Challenges Remain for the
Sub-Continent
• Execution of infrastructure strategy in
India
• Infrastructure outside India
• Subsidies / affordability / habits
• Autogas
• Safe conversions / OEM support
• Retail dispensing stations
• Subsidies
• Market access for international companies
• Peace in the western Sub-Continent
Source: IOC, 2011
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Conclusions
• Sub-Continent population is high, but per capita LPG
consumption is relatively low
• LPG demand is growing rapidly
• Dominated by residential / commerical demand
• Autogas demand is relatively small but growing quickly
• Industrial demand growing
• Demand growth is faster than supply growth
• Local supply is mostly refinery based
• Waterborne imports make up the difference
• Numerous challenges for LPG remain within the
Sub-Continent, but there is great opportunity!
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Thank you for your attention!
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Contact Information
Walter M. Hart, Ph.D., P.E.
[email protected]
+1 832 209 4424
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