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

Meeting the challenges of natural gas distribution and LNG in India

B C TripathiChairman & Managing Director

GAIL (India) Ltd.

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 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

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

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

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/pipedimports.

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

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

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

LNGExisting

Transmission PipelinesExisting

GAIL’s Planned PipelineRIL’s East West PipelineRIL’s Planned Pipeline

City Gas/ CNGExistingPlanned

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 & II10 mmtpa*

HAZIRA3.6 mmtpa

COIMBTORE

MANGLORE

MUMBAI BHUBANESHWAR

KRISHNAPATNAM

NELLORE

CHENNAI

TUTICORIN

TIRUCHCHIRAPALLI

HASAN BANGLORE

KOLHAPUR

SOLAPUR KAKINADA

VIJAYAWADA

DAMRA

DABHOL5 mmtpa

KANJIKKOD

AURAIYA

Iran-Pak-India Pipeline

Turk-Afg-Pak-India Pipeline

GOA

CUTTACK

VIJAYPUR

KANPUR

NANGAL

GURGAUN

PUNE

BHARUCH

SURAT

HYDERABAD

RAJAMUNDRY

BHOPAL

KOCHI2.5 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

Forging partnerships to Meet TheChallenges of Gas & LNG in India

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 FocusLNG Sourcing and Equity Stake in LNG Liq. Terminals

Partnership in the LNG Chain

Opportunities for:LNG supply into Indian marketPartnership 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

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

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

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 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

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 Fields

Panna‐Mukta Fields

Dahej ‐ RLNG, incl regas

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, SKorea,Taiwan

SE Asia

China

India

Asia

          World   (2007‐15)

322

Asia Demand Projection, BCM

Strong Outlook for Gas in Asia

Source: McKinsey, IEA