Gas supply scenario till 2011-12 (MMSCMD)

ONGC OIL JVC/PVT. LNG Pipeline imports Total

* Provisional

Present* 60.8 6.4 21.2 28.6 117.0

By 2011-12 51.0 97.0

(RIL: 80)
52.0 200.0

Gas Reserves 2007

BCM Onshore 270

Offshore
TOTAL

785 (incl. RIL KG Basin)

1055 (R/P ratio: 33 years) TCF BCM 400 200 DGH approved so far 400 56

Major reserves claimed in KG Basin

RIL GSPC 11.30 5.60

ONGC

6.37

220

70

Issues in establishing more reserves and development of fields/ infrastructure: Paucity of rigs, high hire charge for rigs, capital intensive.

Gas demand scenario till 2011-12 (MMSCMD)

* Present consumption Short supply Fuel conversion/ stranded/ closed assets Greenfield projects

Power
Fertilizer

33.0
27.0

30.0
9.0

10.0
24.0 -

62.0
16.0

Industry
Captive/LPG Petrochemicals Transport/domestic Sponge iron units Misc. Total Cumulative

9.0
15.0 4.0 3.0 6.0 6.0 103.0 103.0

N.A
9.0 22.0 70.0 173.0 34.0 207.0

N.A
16.0 21.0 N.A 115.0 322.0

Supply by 2012
*Provisional

200.0

Gas Demand scenario till 2024-32 (MMSCMD)

2024-25 EIA 2004 Ref case High case Low case IEA 2004 IHV 2000 PWC BAU HOG 195 225 155 259 391 488 738 2031-32

IEP 2006 Low High

Current demand (met + unsatisfied): 207

342 672

Transnational gas pipelines

Issues: Gas reserves certification, field development, well-head price,
Quantity MMSCMD Myanmar-India 16 Price Awarded to China. $4.279 per MMBtu well-head price + transit fee + 2,380 km pipeline by China $5.0 per MMBtu (2004, crude $60 per brl) at Indo-Pak border & tpt/ transit fees to Pakistan. construction/ ownership of pipeline, security, transportation & transit fees etc.

Iran-Pakistan-India (IPI)

Pakistan: India:

30 30 60

TurkmenistanAfghanistan: 14 AfghanistanPakistan: 38 Pakistan-India (TAPI) India: 38 90 Oman-India sub-sea pipeline 63

$12.30 per MMBtu?

Well-head price? Pipeline tariff $1.30 per MMBtu

LNG terminals
Location Dahej Hazira Dhabol Company Petronet LNG Shell/TOTAL Ratnagiri Gas Power Projects Ltd. Petronet LNG Capacity (MMTPA) 6.5 (12.5 by 2010/11) 2.5 5.0 Comments Rasgas contracts Spot LNG purchases. Merchant sales Breakwater by 2011? Steep cost escalation. LNG terminal to be hived off? Spot purchases. Negotiations with Exxon, Australia. Commissioning 2012/13.

Kochi

2.5

Total

16.5 to 22.5

Natural gas prices at wellhead/landfall pt/fob

$ / MMBtu APM priority customers Other APM customers Pre-NELP/NELP (PSCs) Reliance KG Basin Petronet LNG 5.0 Addl.1.5 MMTPA MMTPA 2.10 (Rs.3200 per TCM) 2.45 3.50 to 5.75 4.20 (5 years) 2.53 fob till 12/08 JCC adjusted from 1/09 Contract from 7/07 till 9/09. Price 8.50 fob till 12/08 JCC adjusted from 9/09

Addl. 2.5 MMTPA

Spot LNG purchases: Petronet/ Shell etc.

20.00 to 25.00 fob

GAIL pipeline tariff

0.75

The Petroleum & Natural Gas Regulatory Board Bill 2005

Key Functions of the Board relating to Natural Gas
Marketing Register entities to market gas, subject to contractual obligations of GoI LNG terminals Register entities to establish and operate Common or contract carrier pipelines Authorized entities to lay, build, operate Declare as Common or Contract carrier Regulate access and set terms for determining tariff City or local gas distribution networks Authorize entities to lay, build, operate Regulate access and set terms for determining tariff Monitor prices Technical standards & specifications (incl. Safety) Lay down above, including pipeline access code

Key powers of Central Government

May issue policy directives to the Board Final say on whether a question is one of policy or not

Gas Utilization Policy of GoI 2008

Priority allocation Existing plants (incl. Greenfield projects Stranded/ closed/ Fuel conversion) Fertilizer LPG/ Petrochemicals 1 2 7 8

Power
City gas Refineries Industry (sponge iron/ ceramics etc.)

3
4 5 6

11
9 10 ?

Overall comments

Demand till 2012: Present consumption = unmet current demand = greenfield projects (approx. 100 MMSCMD each) Demand till 2024-32: Vary considerably. Some (foreign ones) unrealistically low. Utilization policy of GoI: Priority to existing plants. Drivers: fuel economics and the environment.. Some unanswered questions Supply: To reach 200 MMSCMD by 2012 if legal issues between RIL, RNRL & NTPC are sorted out. No gas for greenfield projects? Availability of rigs? All India gas grid: Organic growth vs. Master Plan. No plans for gas storage Transnational pipelines: Very slow progress Price/fee issues unresolved. Geo-political concerns. LNG: New supplies of LNG hard to find. Is India prepared to pay the price? Regulatory Board: Currently addressing city gas distribution issues. Work on pipelines in hand. Indias carbon footprint: Will reduce with extensive use of natural gas

Thank you