1 Ensuring Natural Gas For Power Sector. 2 PRESENTATION FLOW GAIL : A BRIEF PROFILE CURRENT ENERGY SCENARIO IN INDIA POWER SECTOR SNAPSHOT NATURAL GAS.

1

Ensuring Natural Gas

For

Power Sector

2

PRESENTATION FLOW

GAIL : A BRIEF PROFILE

CURRENT ENERGY SCENARIO IN INDIA

POWER SECTOR SNAPSHOT

NATURAL GAS AVAILABILITY IN INDIA

GAS SUPPLY OUTLOOK

GAS SOURCING OPTIONS

CONCLUSION

3

GAIL –

AN INTEGRATED GAS MAJOR

4

GAIL’S MISSION & VISION

Formed in 1984 as Gas Authorityof India Limited

with

In 2002Changed name

As GAIL (India) Ltd redefined

Mission

Vision

“TO ACCELERATE AND OPTIMIZE THE EFFECTIVE AND ECONOMIC USE

OF NATURAL GAS AND ITS FRACTIONS TO THE BENEFIT OF NATIONAL ECONOMY.”

“BE THE LEADING COMPANY IN NATURAL GAS & BEYOND, WITH GLOBAL FOCUS,

COMMITTED TO CUSTOMER CARE, VALUE CREATION FOR ALL STAKEHOLDERS

AND ENVIRONMENTAL RESPONSIBILITY”

5

GAS PIPELINES 5,600 KMS(133 MMSCMD)

11 States

GAIL – SCALE OF OPERATIONS

GANDHAR

VAGHODIA

USAR

VIJAIPUR

LAKWA

TRIPURA

KG BASIN

VSPL

CAUVERYBASIN

HVJ, DVPL

JLPLRAJASTHAN

NATURAL GAS PIPELINE

LPG PIPELINE

PATA

PETROCHEM PLANT

LPG PLANT

LPG PIPELINES

1922 KMS (3.8 MMTPA)

GAS PROCESSING7 Plants(1.2 MMTPA LPG)

PETROCHEMICALS310,000 TPA

6

INDIA

OFC Connectivity13,000 KMSE&P16 blocks (3 – Farm In Blocks)R-LNGPLL- Dahej (5MTPA)Gas Retailing (8 JVs)IGL,MGL,BGL,CUGL,GGL, MNGL,TNGCL, AGLPower156 MW GSEG, HaziraGlobalizationSubsidiary100% subsidiary – GAIL GlobalRetail GasFayum Gas, Shell CNG, China Gas & NAT Gas

GAIL – SCALE OF OPERATIONS

OFC CONNECTIVITYE&P BLOCKSMYANMAR BLOCKDAHEJ LNG TERMINALCITYGAS

7

930410218

10824

12412

14459

16

39 18

69

19

54

23

10

11

86

-1000

1000

3000

5000

7000

9000

11000

13000

15000

2001-02 2002-03 2003-04 2004-05 2005-2006 0

500

1000

1500

2000

2500

Revenues PAT

In Rupees Crores

Rev

enu

e

Pro

fit

Aft

er T

ax

FINANCIAL PERFORMANCE

TRACK RECORD OF STEADY GROWTH

Consistent growth in Top& Bottom line

5 years CAGR for Revenue =10 %

5 years CAGR for PAT = 15%

8

Current Energy Scenario

9

World Primary Energy Consumption, 2005

262

227

225

195

318

324

387

525

680

1554

2337

0 400 800 1200 1600 2000 2400 2800

USA

China

Russian Federation

Japan

India

Germany

Canada

France

United Kingdom

South Korea

Brazil

Million Tonnes of Oil Equivalent

India is the Fifth Largest Energy Consuming nation

Source: BP Stats 2006

10

World Per Capita Total Primary Energy Consumption, 2003

0.3

0.9

1.7

4.4

4.4

8.6

10.4

0 5 10 15

Singapore

United States

Japan

Germany

World Total

China

India

Tonnes of Oil Equivalent

Low per capita Cn

11

9,5217,545

33,175

25,460

4,605

18,727

0

5000

10000

15000

20000

25000

30000

35000

40000

US Germany China India Japan Singapore

Energy Intensity

Energy intensityB

TU

pe

r U

SD

Total Primary Energy Consumption per Dollar of GDP , 2003

High specific energy consumption by Industries : Poor fuel use efficiency and Conservation norms

High Energy Intensity

Energy savings potential in India: 23%

12

Primary Commercial Energy Consumption/Demand in India (8% GDP growth scenario)

Energy Source 2003-04 2026-27 % Increase

Oil 119 365 207

Coal 167 622 272

Hydro 7 29 314

Natural Gas 29 135 366

Total PrimaryEnergy Supply 327 1222 274

Mtoe

Source: Integrated Energy Policy

Nuclear energy contribution to increase substantially ~ 13 times

13

POWER SECTOR SNAPSHOT

14

Power Generation in the World

Source : IEA-2005

1.9

19.4

15.9

15.86.9

40.1

Coal Gas Hydro Nuclear Oil Other*

World Total Electricity Generation = 16661 TWh

2003 Fuel Shares of Electricity Generation

*Other includes geothermal, solar, wind, combustible renewables & waste.

15

11%

1%

3%

2%

59%

25%

Coal Gas Diesel Nuclear Wind Hydro

Power Capacity Profile In India, 2003-04

Fuelwise Installed Capacity (Total Generation : 556.175 Billion KW)

16

Generating Capacity In India

Installed capacity around end of the period (MW)

17

Natural Gas Demand & Availability in India

18

Sectoral Gas Consumption, 2004-05

Power38%

Fertiliser27%

Others31%

SI4%

Indian Gas Sector

19

Natural Gas

Accounts for 9% of commercial energy consumption

Consumption ~ 31 BCM(2004-05); Projected to grow around 3/4 times by 2025

Power and Fertiliser sectors account for 2/3rd of the total consumption

Present demand estimated around 71 BCM

20

Natural Gas Demand Scenario

Years Quantities

(in MMSCMD)

2006-07 231

2011-12 313

2024-25 391

As projected by Hydrocarbon Vision - 2025

21

Sustainability of domestic reserves, 2004-05

Fuel TypeReserves

* Prod. (per yr)

Cons. (per yr)

R/P Ratio

Oil (Million MT) 786 33.98 127.12 23

Natural Gas (BCM) 1101 31.78 30.79 35

Coal (BMT) 210 0.38 0.44 243

Source: Integ Energy Policy and MOPNG Petstat Statistics, 2005*Proved & Indicated reserves as on 1.4.2005; R/P ratio derived for Proved reserves

22

Current Scenario- Power Sector

•No. of gas based power plants : 43

•Installed capacity : 10999 MW

•Gas requirement : 53.9 MMSCMD

•Current Total supply : 36.6 MMSCMD

•Current Supply by GAIL : 27.4 MMSCMD

•Existing Shortfall : 17.3 MMSCMD

23

Gas Availability Projections

SOURCE AVAILABILITY (Projected)

2005-06 2011-12

DOMESTIC ONGC 51 30

OIL 4 8

JV / PVT. 20 67

SUB TOTAL 75 105

LNG QATAR 18 27

SHELL Spot 9

IRAN 18

SUB TOTAL 18 54

TOTAL 93 159

(MMSCMD)

Large deficit between demand and availability

24

CHENNAI

KOLKATA

KAKINADADABHOL

PUNE

DAHEJ

VIJAIPUR

BHUBANESHWAR

VIZAG

TIRUCHCHIRAPALLI

HAZIRA

KOCHI

A 1 BLOCK, MYANMAR

KRISHNAPATTANAM

TURKMENISTAN

IRAN

MYANMAR

BANGLADESH

NEW GAS

DISCOVERIES

LNG TERM’s-

Upcoming

LNG TERM’s- Existing

TRANS – NATIONAL P/L

CBM

MUMBAI

JAMNAGAR

MANAPPAD

New Gas Discoveries at• Eastern Cost• Myanmar

Upcoming LNG Terminals• Dabhol• Kochi

Cross Border Pipeline

CBM

DAHEJ I & II10

mmtpa*

HAZIRA2.5

mmtpa

DABHOL5 mmtpa

KOCHI5 mmtpa

Gas Supply Augmentation

25

LNGExisting (7.5 MMTPA)

Transmission PipelinesExisting (6,300 Kms)

JAGDISHPUR

PHOOLPUR

BHATINDA

JAMNAGAR

BAREILLY

DISPUR

DELHI

AGARTALA

BARODASURAT

KANPUR

LUCKNOW

PATNA

AHMEDABADRAJKOT

KOTA

MATHANIA

GWALIOR

VIJAIPUR

INDORE

UJJAIN

AGRA

KOLKATA

GAYA

BOKARO

VARANASIJHANSI

Iran-Pak-India Pipeline

Turk-Afg-Pak-India Pipeline

DAHEJ I & II10 mmtpa*

HAZIRA2.5 mmtpa

DABHOL5 mmtpa

COCHIN5 mmtpa

MYANMAR-India Pipeline

A 1 BLOCK, MYANMAR

Upcoming (15 MMTPA , US$ 2 Billion)

Planned (8,400 Kms, US$ 4.5 Billion)

City Gas/ CNGExisting (10 cities)

Planned (28 cities, US $ 1.8 Billion)Gas By Sea Receipt (Likely Location)

LNG Terminal

COIMBTORE

MANGLORE

MUMBAIBHUBANESHWAR

KRISHNAPATNAM

NELLORE

CHENNAI

TUTICORIN

TIRUCHCHIRAPALLI

PUNE

BHARUCH

DABHOL

HASANBANGLORE

KOLHAPURHYDERABAD

SOLAPUR

RAJAMUNDRY

VIJAYAWADA

DAMRA

KOCHI

KANJIRKKOD

TOTAL INVESTMENT – US$ 8 Billion

AURAIYA

Gas Sector Infrastructure: Current And Future

26

Need to set up a Nation-wide Gas Grid

Equitable geographical distribution

Connecting Demand Centres to the Supply Sources: high investment requirement

Ready market access to the producers

Create choice to customers

Demand-Supply Management

27

Exploration & Production : 10

LNG Terminals/Re-gasification : 2

Domestic gas grid : 4.5

Cross Border pipelinesIPI :

7.1TAPI :

3.3Myanmar India : 2.9

Downstream SectorsPower & Fertiliser : 5-6

Gas Retailing (CNG, Auto LPG, Residential) : 1.8

Scale of Investments Required (next 5 years)

In billion USD, approx

Total projected estimates ~ USD 35 Billion, subject to projects materializing

28

Creating market driven market

Creating upfront Infrastructure

Regulatory framework to attract & encourage investments in

infrastructure

Sound energy security structures for cross border trade

Creating institutions for development of technology, standards and

skilled manpower

Bridging geographic disparity between gas resources and demand

centres

Synchronize transportation infrastructure with gas availability

Massive investment

Challenges

29

CONCLUSIONS…

Proactive initiatives taken by Government for sourcing gas from domestic and international sources

Concurrent connectivity to demand centres- planned by GAIL

Prompt response to market reality essential

Gas sourcing long term phenomenon

Capacity additions to match availability of gas

30

CONCLUSIONS

Early capacity bookings will facilitate required energy sourcing and ensure infrastructure development

Currently, limited international sources of LNG

As an immediate step Power plants using Naphtha can switch over to spot RLNG which is cheaper by 30-40%.

Most of additional demand for power generation to be met through LNG which is aligned to international market.

Power sector will have to be prepared to pay higher price for energy in future in line with global trend.

31

Thanks