OVERVIEW OF LPG

BY .
Jagdeep Kumar Rana
CHIEF PLANT MANAGER
DELHI LPG BOTTLING PLANT
TIKRIKALAN
 1 What is LPG;
LPG:Product characteristics and
2
Specifications
3 Sources of LPG
4 Advantages of LPG
5 Different use/ application of LPG
6 Storage of LPG
Contents

7 Marketing of LPG
8 World scenarion in LPG
9 Auto LPG
10 Auto LPG Vs. Domestic LPG
11 LNG
12 LNG supply chain
Q & A : Free session for
13
interaction
•LPG
• Liquefied Petroleum Gas
• 60% Propane + 40 %Butane
 What is LPG
A mix of Hydro carbons
primarily butane, propane and
others viz butene, butylene, iso-
butane etc.

The ratio of primary

components varies from source
to source, however the
marketing specifications are
maintained.

LPG Specifications as per IS:

4576 for domestic use.
Auto LPG Specifications as per
IS:14891 for Automotive use.
 LPG - Physical Properties
• Colourless.
• Odourless. (It's normal to odorise LPG by adding an
odorant prior to supply to the user, to aid the detection
of any leaks).
• Flammable.
• Heavier than air
• Approximately half the weight of water D=0.54
• Non toxic but can cause asphyxiation.
• LPG expands upon release and 1 litre of liquid will
form approximately 250 litres of vapour.
 Fractional Distillation Tower

< 40° C
C1 to C3
Where does LPG come
from? 40° C to 200° C
C4 to C12

• Direct production from

oil refining process. 200° C to 250° C
C12 to C16

• Natural oil & gas fields

separated from the other 250° C to 300° C
C16 to C18

components
300° C to 370° C
C19 and above
 Advantages of LPG
• LPG is helping to combat climate change.
• Household solid fuel use, in developing countries,
accounts for up to 30% of black carbon emissions.
• LPG used in combination with renewable sources can
improve energy reliability.
• LPG is portable.
• LPG produces lower greenhouse gas emissions.
• LPG can claim to be ahead of its time, for its clean-
burning, low-carbon advantage is available at once.
LPG Applications - Industrial
Usage Applications
Metal cutting Provides stable high temperature required for the purpose and clean cuts.
Kiln and Used In incinerators, crematoriums, ceramic and brick kilns for heat treatment
Furnaces etc.

Process Extensively used in Glass, automobile and textile industries for glass blowing,
Industries paint drying/ surface coating and singing activities. Also used by Electronics
industry involved in TV picture tube manufacturing etc.
Fabrication Used for providing homogeneous temperature bath for melting operations with
lead, sulphur and carbon free burning ensuring high quality of production.
Poultry Used for used in Poultry rearing with accurate temperature controls
Aerosol Used as an propellant in aerosol cartridges
Industrial Used for instant and controlled drying processes right from curing of fibre glass
processing to tea leaves drying and dry roasting of nuts
Radiant Used for heating purposes in homes, industrial and commercial establishments.
Heating
Generators Used as a clean eco friendly fuel for running the generators even in the closed
premises
Hotels Used for all possible cooking skills from boiling, stewing, simmering, baking,
grilling and roasting to braising
LPG Applications
• Cooking / Heating
– Domestic
– Non-domestic
• Laboratories
• Automobile fuel etc.
• Industrial.
 LPG Storage

Various methods of storage

– Aboveground storage
a) Pressurized storage of liquid LPG at ambient
temperature: These are normally of three
types.
i. Sphere
ii. Bullets
iii. Mounded storage
(covered by a mound of earth or similar
inert, non
combustible, non-corrosive material except for
nozzles, manhole covers and inspection covers
fitted on the vessels)
HORTON SPHERE BULLETS

MOUNDED
BULLETS
 History of LPG Marketing in India
• Started in 1950’s by Burmah Shell / Stanvac
• IOC started marketing from Barauni Refinery in 1965
• The first Indane LPG connection was released on 22nd Oct’1965 at
Kolkata.
• Sluggish demand in initial phase
• Spurt in demand during later half of 70s
• Availability > Demand for a short period in mid-80s
 History of LPG Marketing in India
• Huge waiting list in 90s
• Parallel Marketing Scheme since 1993
• Government not able to fully open up market
• Decided to abolish APM in 2002
• Not able to attract Private Players due to subsidized rates
• No real competition in domestic which constitute more than 89%
• Difficult to do “real marketing” with a cap in price
• Efforts on to discontinue open ended subsidy.
Global LP Gas Consumption

Chemical
21.5%

Domestic
Refinery
49.4%
6.7%

Transport
7.2%
Industry Agriculture
13.2% 2%

Source: WLPGA Statistical Review of Global LP Gas

(Domestic includes Residential & Commercial)
Consumption Pattern- India

• Domestic 89
%
• Commercial 6.9 %
• Industrial (Bulk) 2.3 %
• Auto LPG 1.8
%
LPG Marketing elements
• Product : Energy for cooking conveniently packed
• Price : Fixed by Government. No freedom to change
• Place : Selling through distributors
• Promotion : Necessitates promotion for safety awareness. Otherwise
not really called for as the product does not have real competition.

With the status of an exclusive business vertical within the Corporation,

the Indane network delivers 1.2 million cylinders a day to the doorsteps of
over 53 million households, making IndianOil the second largest marketer
of LPG globally, after SHV Gas of The Netherlands. Indane is available in
compact 5 kg cylinders for rural, hilly and inaccessible areas, 14.2 kg
cylinders for domestic use, and 19 kg and 47.5 kg for commercial and
industrial use.
The Supply Chain- Packed

Manufacturer Seller Mktg Co

Plant
Customer
Distributor

17
 Marketing LPG- Hierarchy
Head-LPG

•
HO
LPG Sales LPG Strategy LPG-Operations LPG-Engineering

SO State Office LPG Set Up

Field Plant AO

Channel Distributors Auto LPG Other Intermediaries

Members

Customers 18
Market Share- LPG
2013-14

Company Sales (TMT)

IOC 7596
BPC 4080
HPC 4250
Total 15926
LPG Marketing Infrastructure
(Over 1,234 lacs domestic customers (IOC – 609 lacs i.e.
49%) use LPG covering about 50% of total population
• Selling approx.15,926 TMT of LPG (IOC – 7,596 TMT i.e.
47.7%)
• Network of over 10,127 LPG distributorships (IOC - 5,291
i.e. 52%)
LPG Marketing Infrastructure
Facts about LP Gas Worldwide
• LP Gas is a very popular household fuel in many developing countries
and most markets are growing apart from Sub-Saharan
Africa.
– Brazil : over 90 % households use LP Gas
– India : 100 millions households (mainly urban areas )
– China : 115 millions customers, double-digit growth etc.

• Markets are highly fragmented in most developing countries, and at

global level, LP Gas distribution is shared between :
Independent marketers 50 %
State-owned companies 30 %
International oil/gas majors 20 %
• Sustained development – LPG in cylinders is it long term
sustainable strategy?
LPG Marketing in India…Now
• Present situation:
– Urban : Nearing saturation slowly
– Rural marketing is gaining momentum
– The LPG market has grown continuously since 2002-
03
– Domestic cylinder rates stable
• For Company:
– Profits eroding
– Customers activism puts Pressure
– Prices roof high.
 The future LPG Supply and demand
anticipated
D
23888
25000
20653
- 8534
- 7341
20000 16080

- 6056
15000 15354
Demand
13312
Indigenous avail.
10000 10024

5000

0
2013-14 * 2016-17 2021-22
Infrastructure – Import handling facilities
Propane Handling -Present Scenario

 Butane/Propane handled during last few years

Quantity Percentage
 2008-09 2282:310 88:12
 2009-10 1953:574 77:23
 2010-11 3686:938 78:20
 2011-12 3800:1685 70:30
 2012-13 4080:2590 63:37
 2013-14 3684:2410 61:39
 Kandla-IOCL
(with
Blender)
Haldia -JV
(with
Dahej -
Blender)
PVT
(without
Blender)
Vizag –
SALPG
Mumbai-BPCL
(with
(with blender) Blender)

Vizag –
TOIPL-PVT EIPL
(without Ennore -JV
(without
Blender) (with
Blender) Blender)

Mangalore-
HPCL (with
Blender)
26
 Jalandhar

Nabha

Panipat

Loni
Rewari
Ajmer Mathura Digboi
Varanasi
Guwahati
Allahabad
Patan Barauni Bhagalpur
Kandla Sanand
Durgapur
Jamnagar
Koyali
Haldia
Hazira
Local ppl not displayed
Mumbai Mumbai Paradip
High Secunderabad Vizag

Chakan
Existing Pipelines
Vijayawada
Mangalore
Chennai
D’gunti

Kochi Trichy
 Proposed LPG Pipeline Infrastructure :
In progress / Proposed Pipelines
Jalandhar

Panipat

Loni
Rewari
Ajmer Digboi
Muzaffarpur Guwahati
Bongaigaon Nr .Guwahati
Patna
Samyakhali
Barau Bhagalpur
Kandla
ni
Jamnagar Durgapur

Haldia
Hazira
Mumbai Mumbai Paradip Existing Pipelines
High Secunderabad Vizag

Chakan
Under Implementation Pipelines
Vijayawada

Mangalore D’gunti Proposed Pipelines

Ennore
B’lore
Salem
Trichy
Kochi Madurai
Auto LPG - Emissions advantages
IndianOil has setup 371 Auto LPG Dispensing Stations
(ALDS) covering 90 cities across India.
Compared to gasoline :
• 75 % less CO
• 85 % less HC
• 40 % less nitrogen oxides (NOx)
• 87 % less ozone depletion
• The health benefits from such lower emissions are
significant
The saving on account of conversion to AutoGas in
comparison to petrol is about 27%.
29
AUTO LPG over the yearsAmong
- IOC
OMC

Sales Mkt.
Year
Share %

2003-2004 48.3
2003-2004 48.3
2004-2005 47.6
2005-2006 48
2006-2007 48.4
2007-2008 48.2
2009-2010 51
2010-2011 50
Nos. of ALDS as-on 01/04/2014 2012-2013 50.12
2013-2014 50.5
IOC BPC HPC TOTAL

371 90 217 678

Increase in

But decrease in
 AUTO LPG v/s DOM. LPG
S. Characteristic Auto LPG as Domestic LPG as
No per IS 14861 per IS 4576
1 Vapour Pressure at 40 C, Min 520 Butane 520, Mix 1050
kPa Max 1050 Propane 1550
2 C5 Hydrocarbons & 2.0 2.5
Heavier, Max
3 Dienes, mole %, max 0.5 Report
4 Total Volatile Sulphur ppm 150 150
5 Motor Octane Number 88 -
MON
6 Cu Strip Corrosion at 38 C Class 1 Not worse than no. 1
7 Evaporation Residue, 100 -
mg/kg, max
8 Free water content Nil Nil
9 Hydrogen Sulphide Pass the test Pass the test
32
 WHAT IS LNG?
• Liquefied natural gas (LNG) is natural gas (predominantly
methane, CH4) that has been converted to liquid form for ease
of storage or transport. It takes up about 1/600th the volume
of natural gas in the gaseous state. It is odorless, colorless,
non-toxic and non-corrosive. Hazards include flammability
after vaporization into a gaseous state, freezing and asphyxia.
The liquefaction process involves removal of certain
components, such as dust, acid gases, helium, water, and
heavy hydrocarbons, which could cause difficulty
downstream. The natural gas is then condensed into a liquid
at close to atmospheric pressure by cooling it to
approximately −162 °C (−260 °F); maximum transport
pressure is set at around 25 kPa (4 psi).
LNG Supply Chain
LNG supply chain In India
 Queries?
Contact : jkrana@indianoil.in
Important links :
http://www.iocl.com/products/Indanegas.aspx
http://www.iocl.com/products/AutoGas.aspx
http://www.worldlpgas.com