A PRESENTATION ON

DEMAND ANALYSIS OF GAIL(I)’S

NATURAL GAS IN NCR
 INDEX
PART 1

EXECUTIVE SYNOPSIS
INTRODUCTION ABOUT GAIL(I)
OBJECTIVE
RESEARCH METHODOLOGY
ENERGY INDUSTRY
INDIAN ENERGY INDUSTRY
NATURAL GAS

PART 2

DATA ANALYSIS
FINDINGS

PART 3

SWOT ANALYSIS
CONCLUSION
Industry exposure is the most crucial part of the
management studies in which a student is able to
synchronize his technical knowledge with practical
knowledge gained in the any of the organization.

The project titled “Demand Analysis of GAIL’s Natural

Gas in NCR ” which was a great learning experience.

This project was not only learning about Marketing but

it was also about Operation and Finance.
 Natural gas is a major source of electricity generation through the use of gas turbines
and steam turbines.

 To analyse both qualitatively and quantitatively the demand of natural gas in DELHI
(NCR) region I went for a descriptive research design.

 My sampling units were the existing and potential customers and I took a sample size of
76 (existing + potential) such customers.

 Data was collected through both primary and secondary sources.

 Tool used for collecting the primary data was a questionnaire.

 Findings suggested that if GAIL(I) is investing ` 1 crore to supply gas
to any customer then to earn a profit of 18% ), GAIL(I) should charge
approx. ` 5.054 lacs per month, provided if the life of project is 10 years.

 There is no significant difference in the ratings for price, timely

delivery, and service quality among the customers of Sikandrabad,
Ghaziabad, Sahibabad, Gurgaon and Bahadurgarh & Sonepat region.

 However there is significant difference in the rating for technical

support among these customers.

 At present time GAIL(I) is importing Natural gas only from Rasgas

(QUATAR) so GAIL(I) should locate other Natural Gas supplier
countries.
 GAIL(INDIA)
“BE THE LEADING COMPANY IN NATURAL GAS AND BEYOND, WITH GLOBAL FOCUS, COMMITTED TO
CUSTOMER CARE, VALUE CREATION FOR ALL STAKEHOLDERS AND ENVIRONMENTAL RESPONSIBILITY.”
 GAIL(I)

→India's principal GAS transmission and marketing

company.

→Set up by the Government of India in 16th August 1984.

→ GAIL(I) owns and operates more than 7,700 km of pipeline.

→GAIL commissioned the 2800-km Hazira-Vijaipur-

Jagdishpur (HVJ) pipeline in 1991.
→GAIL(I) Natural Gas value chain activities includes:

 
Gas Exploration & Production.
Gas Processing.
Gas Transmission.
Gas Distribution.
Gas Marketing.

→GAIL(I) began its city gas distribution in New Delhi in 1997 .

→In 1999, GAIL(I)set up northern India's only petrochemical plant at Pata (U.P).

→ GAIL(I) commissioned world's longest and India's first Cross Country LPG
Transmission Pipeline from Jamnagar to Loni (1269km).
→The government of India owns 57% of the company.

→78% Market Share in Natural Gas Transmission

→70% Market share in Natural Gas Marketing

→ Turnover of ` 24,996 cr for the year ended 31st March

2009-10

→ Net Profit to the tune of ` 3,140 cr for the year ended

31st March 2009-10
COMPETITORS OF GAIL
 To envisage a project of supplying and marketing of
natural gas to consumers in NCR region.

 To analyze the demand of existing customers as well

as new potential customers.

 To find out the monthly rental which GAIL(I) has to

be levied from customers.

 To study the business of GAIL(I) and its competitors.

RESEARCH METHODOLOGY
PLACE OF STUDY
The Study was conducted over the existing customer of GAIL(I) as
well as the potential customers who want to switch over their energy
need from traditional fuels to Natural gas in NCR.

OBJECTIVE
Qualitative and quantitative assessment of demand Natural gas in
NCR.

SAMPLE SIZE
The sample size considered in our study is 76 (B2B).

TOOLS USED
Microsoft office.
SAMPLING PLAN
Sample Unit: Existing and potential customers.
Sampling Size: 76 (B2B)
Sampling Technique: existing customer of GAIL (I) and interested firms in
different industrial areas of NCR.
Research design: Descriptive.

METHOD OF DATA COLLECTION

The research was conducted on the availability of information from Primary
and Secondary sources.

SECONDARY SOURCES OF DATA

Journals, magazines of GAIL(I).
Internet, website of the company
PRIMARY SOURCE OF DATA
Interaction with the customers of GHAZIABAD region.

A proper Questionnaire was designed to collect the primary

data.

Other than the GHAZIABAD region questionnaire was send to

the customers through courier.

TIME TAKEN IN STUDY

The time taken for the research study was nearly 6 weeks.
 ENERGY INDUSTRY
The energy industry is a generic term for all of the
industries involved the production and sale of energy,
including fuel extraction, manufacturing, refining and
distribution.

COMPONENTS

Petroleum industry
Gas industry
Electrical power industry
Coal industry 
Nuclear power industry
Industry energy consumption of different
fuels
INTERNATIONAL FUEL
DISTRIBUTION
Top Ten Natural Gas Producing Countries
1. Russia … 656.2 billion cubic meters (19.9% of estimated world
total)
2. United States … 490.8 billion cubic meters (14.9%)
3. Canada … 178.2 billion cubic meters (5.4%)
4. Iran … 101 billion cubic meters (3.1%)
5. Algeria … 84.4 billion cubic meters (2.6%)
6. United Kingdom … 84.2 billion cubic meters (2.6%)
7. Norway … 83.4 billion cubic meters (2.5%)
8. Netherlands … 77.3 billion cubic meters (2.3%)
9. Indonesia … 74 billion cubic meters (2.2%)
10. Turkmenistan … 72.3 billion cubic meters (2.2%).

23. India … 28.7 billion cubic meters (0.9%)

 Top Ten Natural Gas Consuming
Countries
1. Russia … 610 billion cubic meters (20.2% of estimated world total)
2. United States … 604 billion cubic meters (20.0%)
3. Iran … 98.2 billion cubic meters (3.2%)
4. Germany … 96.8 billion cubic meters (3.2%)
5. Canada … 92.8 billion cubic meters (3.1%)
6. United Kingdom … 91.2 billion cubic meters (3%)
7. Japan … 83.7 billion cubic meters (2.8%)
8. Italy … 82.6 billion cubic meters (2.7%)
9. Ukraine … 73.9 billion cubic meters (2.4%)
10. Saudi Arabia … 68.3 billion cubic meters (2.3%).

20. India … 34.5 billion cubic meters (1.1%)

 INDIAN ENERGY INDUSTRY
Major Oil Terminals
Bombay, Cochin, Haldia, Kandla, Chennai, Vizag

Major Oil Refineries

Jamnagar
Koyali-Gujarat
Mangalore
Mathura-Uttar Pradesh
Madras
Mahul-Bombay

Major Pipelines India

Oil- Salaya-New Delhi,
Barauni-Digboi
Kandla-Bhatindu (products)

Natural Gas
Hazira-Bijapur-Jagdishpur (HBJ) ,
STORAGE AND TRANSPORTATION
 Advantages Of Natural Gas
 Is more environment friendly than oil or coal.

 Is cheap (less expensive than gasoline) therefore, very cost effective.

 Can be safely stored and burned.

 Most of the natural reserves of natural gas fields are still

underutilized

 Emits 60 to 90% less smog-producing pollutants.

 Due to clean burning process, doesn’t produce ashes after energy

release.
DISADVANTAGES OF NATURAL GAS
 It’s a nonrenewable energy resource.

 Is highly volatile (highly flammable) and can be dangerous, if

handled carelessly.

 Is colorless, odorless and tasteless that makes detection of its leak

very difficult.

 In gas pipelines, a substance (contains carbon monoxide) that has a

strong odor is added to help detect a leak. But, these substances may
be harmful and cause deaths, in fact, natural gas use is the most
common cause of carbon monoxide deaths.

 Constructing and managing such pipelines cost a lot.

DATA ANALYSIS
 No. of existing customers in different
regions of NCR
  
Region No. of customer

10 Sahibabad 10
14

Gurgaon & balance NCR 4

Sikandrabad 4
4
Ghaziabad 10
10
4 Bahadurgarh & Sonepat 14

 
 No. of new customers

2
4
2

Sahibabad
Gurgaon & balance NCR
9
sikandrabad
Ghaziabad
Bahadurgarh & Sonepat

15
Region wise Average demand per customer

REGION NO. OF TOTAL AVG. DEMAND

CUSTOMERS DEMAND (scmd)
(scmd)

SAHIBABAD 12 360500 30041.66667

GURGAON 6 4282732 713788.6667

SIKANDRABAD 19 313100 16478.94737

GHAZIABAD 19 355800 18726.31579

BHADURGARH 18 394660 21925.55556

& SONIPAT
 B&S
GZB

SIKANDRABAD SAHIBABAD

GURGAON

pie chart of region wise Average demand per customer

 COMPARISON
GURGAON SONEPAT GHAZIAB BUHADU SIKANDA SIKANDR
AD RGARH RABAD ABAD

PRICE SAME SAME SAME SAME SAME SAME

TIME SAME SAME SAME SAME SAME SAME

DELIVE
RY

SERVIC SAME SAME SAME SAME SAME SAME

E
QUALI
TY

TECH. DIFF. DIFF. DIFF. DIFF. DIFF. DIFF.

SUPPO
RT
 Mohan Meakins is the biggest existing customer of Sahibabad region. But with
new demand of 150000 SCMD of gas Bhushan Steel – It will be the biggest
customer in 2010 end.

 In Sahibabad region new additional demand (223000 SCMD) is much greater

than present contracted quantity (137500 SCMD). It means potential of market
for GAIL is good.

 There are very few existing customer in Gurgaon region but consumption of
natural gas is much large that is because of two power-generating companies.

 In Sikandrabad region “Orient Ceramics Ltd.” is the largest consumer. And

this is the region where no. of customers are more than other region who are
interested to take gas from GAIL.

 Ghaziabad Industrial area is also a good place to locate new buyers.

 In Bahadurgarh & Sonepat region existing customers are there who are
demanding for additional quantity but new customers are less in number.

 In regionwise comparison of existing gas demand, GURGAON is leading with

85% share. In case of new demand also Gurgaon is leading with 37% share.

 In case of no. of existing customer Bahadurgarh & Sonepat region is leading

with 33% share but in respect of new customer Sikandrabad region region is
leading with 47% share.

 There is no significant difference in the ratings for price, timely delivery, and
service quality among the customers of Sikandrabad, Ghaziabad, Sahibabad,
Gurgaon and ‘Bahadurgarh & Sonepat‘ region. But there is significant difference
in the rating for technical support among the customers of Sikandrabad,
Ghaziabad, Sahibabad, Gurgaon and ‘Bahadurgarh & Sonepat‘ region.
 Gas transmission 78%

 Gas marketing 70%

 STRONG HOLD ON THE GAS BUSINESS.

 TOP COMPANY IN INDIA IN THIS SECTOR

 STRONG HOLD ONALL EXISTING AS WELL AS NEW

CUSTOMERS
 There is a great potential in the market but supply of Natural gas is not
meeting its demand so,
GAIL (I) should search alternatives to get more Gas. At present time
GAIL is importing Natural gas only from Rasgas (QUATAR) so GAIL
should locate other Natural Gas supplier countries.

 GAIL should run a “Natural Gas Awareness Program” to make aware

about different uses of Natural Gas.

 To increase profit margin GAIL should not concentrates only to locate

new customers but company should also focus on the existing customer
to increase their existing demand. As GAIL has no need to fix a new
setup.
 GAIL(I) IS MAKING IT’S PRESENCE IN POLYMER
SECTOR.
 NEW VENTURES WITH GULF COUNTRIES.
 MORE & MORE NEW CUSTOMERS & MAJOR PRIVATE
PLAYERS ARE JOINING HANDS WITH GAIL(I).
 GAIL(I) LAYING MORE NEW PIPELINES.
 NORTH & WEST CONNECTION.
 NORMAL DEMAND & SUPPLY.
 MAIN FROM ONGC & RIL.

 NEW COSTUMERS FIND IT VERY HARD TO

DEAL WITH THE REQUIREMENTS OF GAIL(I).

 GLOBALIZATION.
 After doing the demand analysis it has been concluded that demand of Natural gas is
very much there in the market as a alternative fuel. It is very much cheaper than other
fuels. Also in respect of efficiency there is no comparison with Natural gas. So it is
two way benefit for the customers because in one way it is cheaper and in other way it
is more efficient than any other fuel. Natural gas gives 91-93% efficiency.

 Although it is cheaper and more efficient then also Natural gas is not being used as
Oil. There are two reasons of it, first is its heavy initial investment and second is
unavailability of gas with respect to demand.

 Gurgaon is the leader region in demand of gas whether it is present contracted

quantity or additional demand.

 Demand of Natural gas is more than its supply. It means market has a great potential.