This document discusses the role of gas and liquefied natural gas (LNG) in Asian economic prosperity. It notes that Asia's energy demand is growing rapidly as its economies develop, but many Asian countries are highly dependent on energy imports. LNG imports have been crucial to meeting the energy needs of countries like Japan, South Korea, China, and India. The document advocates for increased regional cooperation among Asian countries to develop gas infrastructure like pipelines, establish a regional gas pricing index, collaborate on reducing the premium paid for Asian LNG, and partner on technologies and joint investments to help ensure long-term energy security for the region.

1. “Role of Gas and LNG
in Asian Economic Prosperity ”
B C Tripathi
GAIL (India) Limited
23 March 2014

2. Presentation Outline
•Asia’s Energy Outlook
•Gas and LNG in Asia
•India’s Gas Scenario
•A Way Forward for Asia

3. Comparative Per Capita Consumption
IEA, UNESCAP

4. High Import Dependence in Asia
IEA, UNESCAP

5. Energy Challenges Facing Asia
IEA, UNESCAP

6. Gas and LNG in Asia

7. Gas as Primary Energy in Asia, Mtoe
2012
2035

8. Key Asian Importers Rely on LNG
Supply of Gas for Key Asian Importers
(in BCM, 2011)
Source: BP Statistical Review 2013, Booz & Company
 Asia Pacific was the largest global
LNG importer (69% share)
 Japan & South Korea have 74%
share in total Asia Pacific imports and
51% share in global LNG imports
 Unlike Europe (~87% imports through
piped gas), limited piped gas import
infrastructure reverses the situation in
Asia Pacific where 80% of imports are
through LNG
21%
137
103
225
119
50
20
21
34
21
21
ChinaSouth
Korea
16
India
144
Japan
55
TaiwanTotal
Supply
384
Supplied Primarily
through LNG Imports
LNG imports
Domestic production
Pipeline imports

9. Demand for LNG almost doubling over the next decade.
Asian LNG Demand Remains Robust
Source: WoodMackenzie

10. Limited Pipeline Connectivity
CAG Pipeline
23 mtpa, 2011
, 1998
, 2013

11. Comparison of Regional Prices
$ per MMBtu, 2000-2012
Platts JKM Marker versus NBP
$ per MMBtu, 2010- Mar’2013
LT Price Premium
0
2
4
6
8
10
12
14
16
18
20
22
2000 2002 2004 2006 2008 2010 2012
$ /MMBTU
-3
+14.0
Brent
US Henry Hub
UK NBP
Japan (cif)
4
6
8
10
12
14
16
18
20
22
24
1 Jan 20141 Jan 20131 Jan 20121 Jan 2010 1 Jan 2011
+8
+2
NBP
JKM
Spot Market Premium
Note JKM and NBP values have been adjusted for shipping cost differences
Source: Platts, BP Statistical Review 2013, Booz & Company analysis
Price Premium for LNG to Asia

12. India’s Gas Outlook

13. Power And Fertilizer - Anchor Markets
Industrial And City Gas - Growing Markets
Sector wise Gas Consumption
44 BCM
(H1 2013-14)
36%
25%
12%
18%
9%
% Share of Consumption
Fertilizer
Power
CGD
LPG, Refineries,
Petrochem & Steel
Others

14. Demand Outstrips Supply

15. Pricing Key to Unlock Demand
0 15 29 44 58 73 88 102 117 131 146 161
BCM

16. What is the Way Forward for Asia?

17. Develop Regional Market Synergies
• Integrated Energy Market can multiply gains
• Create Pan-Asia Energy Market by 2030
• Promote a regional Asian Cooperation Forum for dialogue and consensus
Develop regional pipeline interconnections: Asian Gas Grid
Need to evolve an Asian Gas Price Hub/Index
Collaborate to reduce Asian LNG Premium
LNG prices in the region to reflect current realities
Price setting in a competitive and transparent manner
Collaborate to design innovative pricing methodologies
• HH/Mixed Indices instead of Oil
• Need for S curves

18.  Swapping of LNG volumes to reduce and optimize shipping costs
 Joint acquisition of assets in energy rich countries
 Joint investment in infrastructure
 Import terminals, liquefaction terminals, FSRUs etc.
 Technology and Gas Innovation Partnerships
 Knowledge sharing in areas related to CBM, Shale Gas,
UCG, gas exploration, pipelines, Energy efficiency, Clean Coal etc.
Partnerships are Key to Solve Asia’s Challenges

19. Thank You