Meeting the challenges of natural gas
distribution and LNG in India
B C Tripathi
Chairman & Managing Director
GAIL (India)...
Asia’s Emerging Landscape
M. East India East Asia
3
Strong Economic Outlook for Asia
Post recession, centre of economic gravity is shifting
Asia poised to be world’s larges...
4
Strong Outlook for Gas in Asia
High rates of growth to drive demand for energy
Growth in energy demand in China, India ~...
5
Demand from India continues to be robust
4th largest economy in the world, GDP, projected to grow @ 9%+
Fifth largest en...
Gas demand in developed markets has reduced considerably
Demand in OECD Europe declined 7% in 2009 and may take time to
re...
7
India – Gas Market Profile
Exponential rise in demand for gas; consumption of 62 bcm
Gas/LNG becoming a key source of en...
8
Fast Growing Market for Gas & LNG
India’s gas demand could reach 120 bcm by 2015
Domestic supply expected to reach 84 bc...
LNG
Existing
Transmission Pipelines
Existing
GAIL’s Planned Pipeline
RIL’s East West Pipeline
RIL’s Planned Pipeline
City ...
Forging partnerships to Meet The
Challenges of Gas & LNG in India
Partnership Options
Oil/Gas Exploration through NELP/CBM
LNG Sourcing and Terminals
Trans - National Pipelines (incl. deep...
Partnership in the LNG Chain
Opportunities for:
LNG supply into Indian market
Partnership in LNG Regas Terminals (incl. FS...
Technology Based Partnerships
GAIL focussed on taking India market to the next level through
assimilation of new/emerging ...
GAIL: A Preferred Partner
$ Bn$ Bn
India’s Premier Integrated Natural Gas Company since 1984
25+ Years of Experience & Exp...
Business Portfolio
NG Transmission
E&P
Petrochemicals
NG Trading
Retail
Liquid Hydrocarbons
GAILTEL Diversification
India is a rapidly evolving market for gas
Gas and LNG an integral part of India’s energy portfolio
With emerging global s...
THANKS FOR YOUR ATTENTION
Indicative Gas Prices - India
$4.20
$4.21
$4.30
$5.57
$5.73
$6.86
Administered gas
RIL ‐ K.G. D‐6
RAVVA Satellite
Tapti Fi...
Gas Demand CAGR, %
(2008‐20)
0
100
200
300
400
500
600
700
2007 2008 2010 2015 2020
346
513
420
622
1
4
9
8
5
1.3
Japan, S...
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Mr tripathi's presentation slides from the 2010 World National Oil Companies Congress

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Mr tripathi's presentation slides from the 2010 World National Oil Companies Congress that took place in June in London.

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Mr tripathi's presentation slides from the 2010 World National Oil Companies Congress

  1. 1. Meeting the challenges of natural gas distribution and LNG in India B C Tripathi Chairman & Managing Director GAIL (India) Ltd.
  2. 2. Asia’s Emerging Landscape M. East India East Asia
  3. 3. 3 Strong Economic Outlook for Asia Post recession, centre of economic gravity is shifting Asia poised to be world’s largest economic region by 2030, ahead of G-7 By 2020, Asia’s share of World GDP may be ~35% Asia Pacific economic growth outlook for 2010: 5.5% Developing Asia (China, India, ASEAN-5) growth forecast: 8.8% Source: IMF
  4. 4. 4 Strong Outlook for Gas in Asia High rates of growth to drive demand for energy Growth in energy demand in China, India ~ 3-4% in next few years Expected CAGR of gas demand (2008-2020) in ChIndia > 8% (fastest growth among all fossil fuels) Large scope for growth: current share of gas in AP energy basket 11% LNG is only 1/3rd of the region’s total gas consumption Asia Pacific Share of world LNG consumption: 70%
  5. 5. 5 Demand from India continues to be robust 4th largest economy in the world, GDP, projected to grow @ 9%+ Fifth largest energy consumer in the world Requires 3-4 times energy supply within next two decades Gas ~ 10% of India’s primary energy consumption Gas demand expected to rise @ 8% in next decade. 10% share of energy mix projected to rise to 16% 0% 2% 4% 6% 8% 10% 1970 1980 1990 2000 Share of gas
  6. 6. Gas demand in developed markets has reduced considerably Demand in OECD Europe declined 7% in 2009 and may take time to recover due to prevailing economic situation. Demand to grow slowly, Could be met by indigenous supplies/piped imports. US gas demand contracted by (-)1% in 2009 Increased domestic production in US/Canada means limited need for imports in near/medium term. Demand not expected to grow beyond 1% p.a. in this decade So, will Asia (ChIndia) drive the demand for gas? 6 Uncertainty in Developed Markets Data source: McKinsey
  7. 7. 7 India – Gas Market Profile Exponential rise in demand for gas; consumption of 62 bcm Gas/LNG becoming a key source of energy Reserves & consumption growing 6-8% p.a. for a decade ~17,000 MW Power capacity (10% share) and 17 MnT Urea production (80% share) Changing consumer profile: beyond power and fertilizer Better price affordability of the market, price range $ 4.2-$ 6.5/mmbtu Increasing integration with world gas markets: LNG 18% of consumption Extensive pipeline and distribution infrastructure under development
  8. 8. 8 Fast Growing Market for Gas & LNG India’s gas demand could reach 120 bcm by 2015 Domestic supply expected to reach 84 bcm by 2015 Against demand gap of 36 BCM (27 MTPA LNG), present long term tie-up 9 MMTPA Potential demand for additional LNG 18 MMTPA. Total trunk tptn infrastructure by 2013-14: over 220BCM (23,000 Kms) India is moving fast towards market based pricing ~ $50 bn planned investments in Gas Chain infrastructure over 4-5 yrs Clear Government intent for pro-consumer, pro-investor reforms Source: McKinsey, GAIL analysis
  9. 9. LNG Existing Transmission Pipelines Existing GAIL’s Planned Pipeline RIL’s East West Pipeline RIL’s Planned Pipeline City Gas/ CNG Existing Planned LNG Terminal JAGDISHPUR PHOOLPUR BHATINDA BAREILLY DISPUR DELHI AGARTALA BARODA LUCKNOW PATNA AHMEDABAD RAJKOT KOTA MATHANIA GWALIOR UJJAIN AGRA KOLKATA GAYA BOKARO VARANASIJHANSI DAHEJ I & II 10 mmtpa* HAZIRA 3.6 mmtpa COIMBTORE MANGLORE MUMBAI BHUBANESHWAR KRISHNAPATNAM NELLORE CHENNAI TUTICORIN TIRUCHCHIRAPALLI HASAN BANGLORE KOLHAPUR SOLAPUR KAKINADA VIJAYAWADA DAMRA DABHOL 5 mmtpa KANJIKKOD AURAIYA Iran-Pak-India Pipeline Turk-Afg-Pak-India Pipeline GOA CUTTACK VIJAYPUR KANPUR NANGAL GURGAUN PUNE BHARUCH SURAT HYDERABAD RAJAMUNDRY BHOPAL KOCHI 2.5 mmtpa BARMER Gas Sector Infrastructure: Current And Future INTEGRATED GRID TO LINK ANY SOURCE TO ANY MARKET Existing – to start Construction LNG TerminalLNG Terminal (Capacity(Capacity--MMTPA)MMTPA) Start YearStart Year (Est)(Est) Dahej (10)Dahej (10) OperatingOperating Hazira (3.6)Hazira (3.6) OperatingOperating Dhabol (5)Dhabol (5) 20112011 Kochi (2.5)Kochi (2.5) 20122012 Others (17.5)Others (17.5) 20142014--1515
  10. 10. Forging partnerships to Meet The Challenges of Gas & LNG in India
  11. 11. Partnership Options Oil/Gas Exploration through NELP/CBM LNG Sourcing and Terminals Trans - National Pipelines (incl. deep offshore ) Gas based end-use industries (petrochemicals, power, processing plants etc) City Gas Distribution /CNG Projects Immediate Focus LNG Sourcing and Equity Stake in LNG Liq. Terminals
  12. 12. Partnership in the LNG Chain Opportunities for: LNG supply into Indian market Partnership in LNG Regas Terminals (incl. FSRUs) LNG Liquefaction assets overseas Long term LNG contracts required for ~12 MMTPA of unmet demand in India. Consumers in Indian market have shown good appetite and affordability for market driven price of gas / LNG With emerging global scenario, India would be important market for Long Term and spot LNG Pricing strategy key to unlock India market
  13. 13. Technology Based Partnerships GAIL focussed on taking India market to the next level through assimilation of new/emerging technology Possible areas of interest Shale Gas & CBM exploration Coal Gasification Improved mobility solutions based on gas Gas Storage Systems Methane to Olefins Waste to Biogas
  14. 14. GAIL: A Preferred Partner $ Bn$ Bn India’s Premier Integrated Natural Gas Company since 1984 25+ Years of Experience & Expertise in Gas Chain 57%+ GoI stake 13%+ CAGR in 10 Year Turnover 14%+ CAGR in 10 Year PAT Moody’s – Foreign/Domestic Rating: Baa2/A3 3700+ Manpower Asset 2 3 4 5 6 0.4 0.5 0.6 0.7 Turnover CAGR of 13% PAT CAGR of 14% GAIL: Partner of choice $ Bn$ Bn 20042004‐‐05                                           200905                                           2009‐‐1010
  15. 15. Business Portfolio NG Transmission E&P Petrochemicals NG Trading Retail Liquid Hydrocarbons GAILTEL Diversification
  16. 16. India is a rapidly evolving market for gas Gas and LNG an integral part of India’s energy portfolio With emerging global scenario, it is an attractive market for gas/LNG Pricing largely aligned with market forces Pro-reform, Pro-liberalization Policy Necessary Policy and Regulatory framework already available Several incentives for large scale investment in energy value chain Reforms in key end-use sectors yielding good results Right pricing strategy key to unlock India market GAIL open for potential business partnerships Conclusions
  17. 17. THANKS FOR YOUR ATTENTION
  18. 18. Indicative Gas Prices - India $4.20 $4.21 $4.30 $5.57 $5.73 $6.86 Administered gas RIL ‐ K.G. D‐6 RAVVA Satellite Tapti Fields Panna‐Mukta Fields Dahej ‐ RLNG, incl regas
  19. 19. Gas Demand CAGR, % (2008‐20) 0 100 200 300 400 500 600 700 2007 2008 2010 2015 2020 346 513 420 622 1 4 9 8 5 1.3 Japan, S Korea,Taiwan SE Asia China India Asia           World    (2007‐15) 322 Asia Demand Projection, BCM Strong Outlook for Gas in Asia Source: McKinsey, IEA

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