BULK LPG SYSTEMS FOR INDIA
BULK LPG SYSTEMS FOR INDIA
PRESENTATION CONTENTS
1. LIQUIFIED PETROLEUM GAS (LPG) P. 3
2. BULK LPG P. 6
3. LPG IN INDIA P. 9
4. INDUSTRIAL OPPORTUNITIES P. 13
5. RESIDENTIAL OPPORTUNITIES P. 15
6. LPG SAFETY STANDARDS AND REGULATION P. 20
7. DEVELOPMENTAL BENEFITS P. 23
8. BACKGROUND ON CGV & PARTNERS P. 28
1. LIQUEFIED PETROLEUM GAS
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1. LIQUEFIED PETROLEUM GAS (LPG)
WHAT IS LIQUEFIED PETROLEUM GAS (LPG)?
• A hydrocarbon produced from natural gas processing and crude oil refining.
• One of the cleanest-burning fossil fuels.
• Extensive residential, commercial and industrial applications.
• More compact as a liquid than as a gas making it economical to store and
transport as a liquid.
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1. LIQUEFIED PETROLEUM GAS (LPG)
AN ENVIRONMENTALLY FRIENDLY FUEL
• LPG with air won't ignite unless the source of ignition reaches at least 940
degrees Fahrenheit. Gasoline ignites at 500 degrees Fahrenheit.
• Non-toxic - can not contaminate soil or water.
• LPG tanks can be placed either above or below ground.
• A much lower carbon footprint than fuel oil, coal, or wood.
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2. BULK LPG
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2. BULK LPG
BULK LPG
• Bulk LPG is delivered to a tank (ranging from 100 to 30,000+ gallons) using
specialized LPG transport vehicles (referred to as “bobtails”).
• Tanks are installed at a customers site (either individual homes, apartment
buildings, as well as commercial/industrial sites).
• Bulk LPG can serve one to thousands of customers through a reticulated
distribution network.
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2. BULK LPG
THE BENEFITS OF BULK LPG
• Customers pay for actual metered
consumption rather than pre-buying
gas per cylinder.
• Improved safety as the LPG is
externally stored.
• Reduced servicing costs as larger
fewer storage units require fewer
service calls.
• Improved privacy and convenience
for residences.
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3. LPG IN INDIA
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3. LPG IN INDIA
LPG IN INDIA
• LPG is the primary cooking fuel in
India
• India is the fourth largest LPG
market in the world and third largest
in the domestic sector
• More than 130 million Indian
households use LPG and residential
consumers have been increasing at
a rate of 8% per annum.
• The U.S. is expected to become a
net exporter of LPG in the coming
years and India could be a strategic
market for U.S. LPG.
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3. LPG IN INDIA
LPG SUBSIDIES IN INDIA
ANALYSIS OF LPG IN 14.2 KG CYLINDER
1. SUBSIDIZED LPG
INR/KG INR/CYLINDER
COST PROFIT PRICE COST PROFIT PRICE
26.60 1.600 28.20 377.72 22.720 400.44
2. MARKET PRICE OF LPG
INR/KG INR/CYLINDER
COST PROFIT PRICE COST PROFIT PRICE
63.50 2.500 66.00 901.70 35.500 937.20
3. VALUE OF SUBSIDY (#2 LESS #1)
INR/KG INR/CYLINDER
COST PROFIT PRICE COST PROFIT PRICE
36.90 0.90 37.80 523.98 12.78 536.76
57%
• Development in the LPG sector has been limited by significant
government subsidies.
• These subsidies have negated any economic incentive to pursue the
efficiencies offered by bulk LPG storage and distribution.
• As shown in the table, more than 50% of the value of residential LPG is
subsidized by the Government of India.
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3. LPG IN INDIA
PHASING OUT OF LPG SUBSIDIES
• The removal of subsidies will result in middle and upper income Indian
residential LPG consumers paying world market prices for LPG.
• This will provide a basis for introducing more efficient and cost effective
bulk LPG systems.
• The removal of subsidies will also make it possible to offer new LPG
based applications and appliances to residential consumers who have
only been allowed to use subsidized LPG for cooking in the past.
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4. INDUSTRIAL OPPORTUNITIES
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4. INDUSTRIAL OPPORTUNITIES
DIESEL BOILER CONVERSIONS FOR INDIAN INDUSTRY
There are tens of thousands of diesel powered boilers in operation
throughout India that can be targeted for conversion to LPG. It is possible to
provide Indian industry with these conversions at no cost along with a
guaranteed 10% energy cost savings. These attractive terms are possible
based on:
• LPG’s Costs and Efficiencies
• Indian boiler manufacturers’ interest in promoting
LPG boiler sales
• Indian oil company interest to sell more profitable
LPG
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5. RESIDENTIAL OPPORTUNITIES
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5. RESIDENTIAL OPPORTUNITIES
VERSATILITY: RESIDENTIAL APPLICATIONS
More than a dozen LPG applications available to residential households with Bulk LPG.
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5. RESIDENTIAL OPPORTUNITIES
COMMUNITY GAS
• Metered LPG systems for
communities without access to
natural gas infrastructure. Can be
converted to natural gas.
• Hundreds of LPG consumers can
be connected to one large tank.
Thousands can be served through
engineered reticulated systems.
• LPG consumption is individually
metered and billed.
• In the United States, Tanks are
typically underground. Pipelines
can be run with other utilities.
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5. RESIDENTIAL OPPORTUNITIES
COMMUNITY GAS BENEFITS TO REAL ESTATE DEVELOPERS
• Alternative to all-electric power
• CGV/HBH can provide capital, installation, service and support
• Construction cost savings
• No need for unsightly individual tanks or inconvenient cylinders
• Virtually unlimited applications
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5. RESIDENTIAL OPPORTUNITIES
COMMUNITY GAS BENEFITS TO HOMEOWNERS
• Cost Savings
Based on economies of scale.
• Increased comfort and convenience
Large selection of applications and
appliances that improve life quality.
• Improved Safety
LPG is externally stored. Gas constantly
maintained to appliance systems.
• Improved Convenience
No out-of-gas complaints. No hassles
securing and storing cylinders.
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6. LPG SAFETY
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6. LPG SAFETY
LPG SAFETY STANDARDS AND REGULATIONS
• The National Fire Protection Association (NFPA) is an organization charged with creating
and maintaining building codes and other fire prevention standards.
• Fire departments, insurance companies, manufacturing associations, unions, and trade
organization are just a few of the types of entities that are included in the NFPA.
• NFPA 58 is the established guide for LPG safety codes and standards. It is regularly
update and revised by the NFPA every 3 years.
• NFPA 58 and the International Fire Code are similar in their treatment of LPG, and both
are utilized by the U.S. Department of Labor, the Department of Homeland Security, and
the Environmental Protection Agency.
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6. LPG SAFETY
LPG SAFETY STANDARDS AND REGULATIONS
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7. DEVELOPMENTAL BENEFITS
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7. DEVELOPMENTAL BENEFITS
DEVELOPMENTAL BENEFITS - INFRASTRUCTURE
• Introduction of bulk LPG distribution
technology will replace inefficient and costly
cylinders with bulk installations that offer
greater operating efficiencies, convenience,
and safety.
• Development of appropriate safety codes for
bulk LPG and residential distribution will
make the LPG market more accessible.
• Consumers that are away from natural gas
pipelines can be provided with an immediate
solution. Bulk LPG installations can be
converted to support natural gas once/if
pipelines arrive.
• Environmental benefits such as promotion of
new applications of LPG that will replace
coal/fuel oil and greater efficiency with the
transport of LPG.
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7. DEVELOPMENTAL BENEFITS
DEVELOPMENTAL BENEFITS – TECHNOLOGY TRANSFER & MARKET REFORM
• Partnerships with existing LPG distributors in India will allow transference of world-
class operating and technical know-how.
• The efficiencies of bulk LPG can partially mitigate the impact of the removal of
residential LPG subsidies in India, which currently cost the Government more than
$4 billion USD (approx. 195 billion INR) annually. The Government of India’s
strategy to phase out LPG subsidies on affluent Indian households can be
coordinated with the introduction of bulk LPG systems.
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7. DEVELOPMENTAL BENEFITS
DEVELOPMENTAL BENEFITS – HUMAN CAPITAL GROWTH
• Provide training to an expanded
group of skilled LPG technicians who
will be qualified to install and service
bulk LPG systems according to
internationally accepted standards.
• Prospective retraining of unskilled
LPG cylinder distributors to provide
them with the knowledge and skills to
install and service bulk LPG systems.
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7. DEVELOPMENTAL BENEFITS
DEVELOPMENTAL BENEFITS – ENVIRONMENTAL
• Reduced pull on the electric grid
• One home using gas in lieu of electric appliances for just water and space heating
effectively offsets about 8.5 tons of carbon emissions per year (more than the average
annual emissions from a vehicle)
• Gas water heaters produce 60% less carbon emissions than electric water heaters
• Propane is non-toxic and insoluble, so it offers minimal risk to aquifer and other
ground water supplies
• 10 wood burning houses create as much particulate pollution as 10,000 houses with
gas fireplaces
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8. BACKGROUND ON CGV & PARTNERS
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8. BACKGROUND ON CGV & PARTNERS
CENTRAL GAS VENTURES
• An international project development company
founded in 2000 that specializes in developing and
managing bulk LPG ventures in emerging markets.
• In Jordan, CGV was the first to introduce bulk LPG
technology in 2005, which now accounts for nearly
10% of Jordanian gas consumption.
• In the West Bank, CGV has been responsible for the
engineering of reticulated systems that will be
connecting thousands of residential housing units.
• In Iraq, CGV has been active in the Industrial sector.
8. BACKGROUND ON CGV & PARTNERS
FERRELLGAS
• For more than 65 years, Americans
have relied on Ferrellgas for their
residential, industrial/commercial, and
agricultural LPG needs.
• LPG industry leaders with more than 1
million Customers in the United States.
• Ferrellgas is the 2nd largest LPG
company in the U.S. and operates in all
50 states and Puerto Rico.
• Since 1994 Ferrellgas has been publicly
traded on the NYSE under the ticker
symbol FGP.
8. BACKGROUND ON CGV & PARTNERS
HBH GAS SYSTEMS
• An award-winning, recognized leader in
the design and implementation of
Central Gas Systems
•International Project Experience in Bulk
LPG in Emerging Markets
•HBH systems: 13 states, over 25,000
customers in US and over 20,000 in the
Middle East
•HBH Egypt is a gas distribution and
network company that specializes in
getting clean, economical gas fuel to the
Egyptian population with a focus on
expanding Egypt’s natural gas
infrastructure.
Thank You
Beau Lendman
President
Central Gas Ventures, Inc.
1600 Tysons Blvd., Suite 600
McLean, VA 20102 USA
703-276-1616 USA
[email protected]
www.centralgasventures.com
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