Forecasts of 2012-13 for India's LNG import stats stand corrected today. This presentation shows what the LNG shipowners may expect by 2020 from Indian natural gas Market and the charterers

1. Opportunities in India’s
Seaborne LNG Transportation
Presentation by Sharvani Mishra
Senior Manager Business Development
Sharvani.Mishra@irclass.org
Indian Register of Shipping

2. Flow of presentation
• Growth Rate of Natural Gas versus other fuel types
• Natural Gas production vs Imports
• Past Supply forecasts vs Actuals
• Past Demand forecasts vs actuals
• Current Sectorial Demand
• Mid‐stream and Downstream supply chain adequacy
• Future outlook – Government efforts
The Indian Context

3. Growth Rate of Natural Gas vs other fuel type…
3.5
7.1
4.4
2.1
4.5
6.1
11.0
5.4 5.5
3.03.7
‐0.1
7.5
15.6
4.3
24.8
‐5.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Oil Natural Gas Coal Nuclear Energy Hydro electric Renew‐ ables
Growth rate (%)of various fuel types
Year 2000‐2014
2000‐2005 2005‐2010 2009‐2014
Source BP Statisticl Review 2015

4. Natural Gas production vs imports…
23.8 23.4 24.0 24.2
35.4 39.0 35.3
30.3
26.3 24.9 24.0 22.0
5.0 5.0 5.0 5.0
7.5
7.5
7.7
7.7
7.7 7.7
11.3
11.3
0.1 1.8 3.2 3.0
1.4
2.2
3.9
3.2
3.1 3.9
4.4 6.7
2005‐06
2006‐07
2007‐08
2008‐09
2009‐10
2010‐11
2011‐12
2012‐13
2013‐14
2014‐15
2015‐16 (P)
2016‐17 (P)
Domestic Production Import ‐ Long term Import ‐ Spot/Short Term
We are here

5. Past Supply Forecast vs Actual …
30.3 26.3 24.9 24.0 22.0
10.9 10.8 11.6 15.7 18.0
30.3 26.1 24.8
38.6 48.6
13.2 13.2 14.9
35.8
41.7
2012‐13 2013‐14 2014‐15 2015‐16 2016‐17 (P)
As per 12th Five Year Plan
Actual Domestic Production Actual Import Domestic Gas Imports total actual supply
All figures in MMTPA
• Gas wells discovered 2‐3 years ago are yet to start production
• Domestic Gas price @ $4.6 
• HIGH Imported Gas Spot price @ $15‐18 / mmbtu 

6. Past Demand Forecast vs Actual …
79.4
89.4
110.6
121.9
129.4
43.4 42.8 43.8 44.2 45.9
2012‐13 2013‐14 2014‐15 2015‐16 2016‐17(P)
As per 12th Five Year Plan
Power Fertilizer
City Gas Petchem/ Refineries/ others
All figures in MMTPA
• Subsidies restricted aggressive investments by the government
• Low to negative returns due to Regulated/ domestic gas pegged price of
end product

7. Natural Gas Sectorial Demand…
Power
49%
Fertilizer
28%
City Gas
10%
Petchem/
refin/others
13%

8. Natural Gas Sectorial Demand…
PRICE ELASTIC
DEMAND
Power
&
Fertilizer Sector
77%
33 mmtpa
Power
49%
Fertilizer
28%
City Gas
10%
Petchem/
refin/others
13%
PRICE IN‐ELASTIC
DEMAND
Pet/Refinery
Industrial
CGD
Sponge Iron
39%
10 mmtpa
Landed price of LNG
$ 4 ‐ 6/ mmbtu
Landed price of LNG
$ 8 ‐14/ mmbtu

9. LNG Supply Chain within India ‐ “mid stream to downstream”
12.8
17.8
23
36.641
55
19.5 23
2015‐16 2019‐20 2024‐25
term Contracts re‐gas terminal pipeline to terminal Import Demand
“SPOT CARGO”
5.2 MMTPA
“SPOT CARGO”
6.7 MMTPA
All figures in MMTPA

10. Government’s efforts to improve demand…
• Provided special funds to Stranded Power Plants for revival during 2015‐
16 & 2016‐17
• approx. 8000 MW @ 30% PLF ≈ 3.75 MMTPA
• GAIL as Pool Manager
• Gas pooling (RLNG + Domestic Gas) to mitigate price exposure for Power
and Fertilizer Sectors
• Reviving abandoned fertilizer plants
• Encourage Make in India – boost to manufacturing / industrial sectors
• Competitive pricing in City Gas Distribution, faster network expansion
efforts
ABOVE EFFORTS MAY ADD A 5‐6 MMTPA OF ADDITIONAL LNG DEMAND
BY FY 2020
WAIT AND WATCH FOR THE 13TH FIVE YEAR PLAN

11. Government’s efforts to improve demand…
• Provided special funds to Stranded Power Plants for revival during 2015‐16 &
2016‐17
• approx. 8000 MW @ 30% PLF ≈ 3.75 MMTPA
• GAIL as Pool Manager
• Gas pooling (RLNG + Domestic Gas) to mitigate price exposure for Power and
Fertilizer Sectors
• Reviving abandoned fertilizer plants
• Encourage Make in India – boost to manufacturing / industrial sectors
• Competitive pricing in City Gas Distribution, faster network expansion efforts
ABOVE EFFORTS MAY ADD A 5‐6 MMTPA OF ADDITIONAL LNG DEMAND
BY FY 2020
WAIT AND WATCH FOR THE 13TH FIVE YEAR PLAN

12. Possible increase in domestic demand…

13. The brighter side is…
• Asia is @ JCC linked import market
• Spot LNG cargo prices are expected to remain low in foreseeable future ‐
spot market will remain attractive for some time
WE HOPE THAT THE LNG VESSEL OVERSUPPLY GOES AWAY THIS YEAR AND
UNMUTES THE DEMAND
104.1
96.2
50.8
29.9 35.8 39.7 43.1 45.3
16 16 16
10.4 8.9 9.1 8.9 8.8
‐3.5
6.5
16.5
0
50
100
150
2013 2014 2015 2016 2017 2018 2019 2020
IMF Forecast for Crude Oil and Natural Gas
2013‐2020
avg of spot price for UK Brent, Dubai and WTI JCC linked LNG

14. Indian Charterer’s outlook …
• Mitigate transportation cost through flexible terms in long term
charter party
• Use “multiple port call” clause to avail Gas Swap, mitigate
demand risk, trade gas worldwide
• Inclination to shorter term contracts

15. Conclusion…
• India’s natural gas market is fairly price elastic
• Market is expected to grow by 5 mmtpa (cautious outlook) by 2020
• Infrastructure is not expected to be a constrain
• Optimizing every leg of LNG supply chain, including transportation is
important to increase vessel employability
• Open outlook to flexible long term contracts will help vessel employability