Compressed biogas price - INR per kg or INR per MMBTU ? How it compare with each other.

 

The Compressed Biogas or Biomethane is mostly sold or purchased at a value equivalent to a kilogram of gas complying with IS16087:2016 Rev 1 as of date. Looking at the global trend and energy pricing in India we are valuing the gas based on energy content i.e. INR per MMBTU. The latest rate as per OMC is about INR 1470 per MMBTU and an additional INR 2 per Kg for direct pipe injection or INR 8 per kg for Injection via Cascade. The compression charges per kg will be calculated on which basis needs to be explored. We expect these numbers to be converted to identical energy units of INR per MMBTU for simplicity in near future. 

There are a lot of discussions happening in and around this and we strongly felt to elaborate on this so that all the stakeholders of this value chain lower down will be able to evaluate the various gas prices via different selling options to the common level before taking call for a product off-take mechanism.

Let’s quantify the energy value of CBG first and then convert various forms for better understanding.

The Energy of CBG is mainly from methane and the balance of the gasses is mostly fillers. The GCV of the pure methane is about 55.5 MJ/kg or 13265 Kcal/kg. 

As per IS 16087:2016 Rev 1 the appx.  96% v/v Methane, 3.5% Carbon Dioxide, up to 0.5% Oxygen, up to 20 mg/m3 Hydrogen sulfide and 5 mg/m3 water.  The composition here is on a volumetric basis and once converted to a weight basis the methane is estimated to be about 90% w/w of the CBG.

The appx energy value of CBG is about 11938.5 Kcal/kg or about 8955 Kcal/sm3 at an estimated density of about 0.75 kg/sm3 w.r.t. above mentioned specification.

1 BTU is equivalent to 0.252 Kcal. Or 1 MMBTU is about 252164 Kcal and with 11938.5 Kcal per KG CBG it can be estimated that each MMBTU will have about 252164/11938.5 i.e. 21.12 unit.

So with the given specification of CBG and further calculation, there are 21.12 kg CBG per MMBTU of the energy. Now let's convert about gas pricing in the same units for better understanding.

               The base price of the gas: 1470 Rs/MMBTU

               Compression Cost: 21.12 x 2 : 42.24 Rs/MMTU (Direct Injection or Via DCU in Nearest Line) ---1

               Compression Cost: 21.12 x 8 : 168.96 Rs/MMTU (Sale at nearest Retail outlet via Cascade in Nearest Line)---2

The landed price of the gas per kg to the developer will be 71.60 Rs/kg of CBG in direct injection case and 77.6 Rs/kg of CBG in Injection via Cascade in the nearest line.

Please note these values are specific to gas composition at the outlet of the gas purification plant so to make it simple we have developed an excel program. Please connect with us for a free copy of the program. A screenshot of the same is attached herewith for reference.