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Business Development Activities

in GAIL

GAIL Training Institute

Noida

September 3, 2011

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OUTLINE

Primary Energy Mix

Indian Gas Sector

Overview -GAIL (India) Ltd.

GAILs Strategy

GAILs Business Portfolios

GAILs Global Footprints

GAILs JVs, Subsidiaries & Associate Companies Objective of BD Group

Role of BD Group

Focus Areas of BD Group

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PRIMARY ENERGY MIXWORLD INDIA

INDIAFAST GROWING NATURAL GAS MARKETSource : BP Statistical Review 2011

5th Largest Energy Consumer

12,002 MTOE

Percapita: 1.7 TOE

Per capita: 0.4 TOENG CAGR(10 yrs): 2.9%

NG CAGR(10 yrs): 5.1%

Oil34%

NaturalGas24%

Coal30%

Hydro6%

Nuclear

5%

Renewables

1%

Oil30%

Natural Gas10%

Coal53%

Hydro

5%

Nuclear

1%

Renewables

1%

524 MTOE

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INDIAN GAS SECTOR : SUPPLY

Domestic Reserves : 38.5 TCF

Domestic Sources 72.67

KG-D6 47.17

Long term RLNGImports 25.13

Spot RLNG imports 21.20

Total Supplies 166.17

Avg. Daily Supplies (June, 2011)

MMSCMD

CURRENT SUPPLY SOURCES

RAJASTHAN

R/P : 35 Years

Source: Infraline

CURRENT DOMESTIC SUPPLIES ARE LIMITED AND SCATTERED

Domestic Sources

LNG Import

ASSAM

TRIPURA

KG

CAUVERY

MUMBAI

OFFSHORE

CAMBAY

DAHEJHAZIRA

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INDIAN GAS SECTOR : CONSUMPTION

POWER AND FERTILISERANCHOR MARKETS

INDUSTRIAL AND CITY GASGROWING MARKETS

Avg. Sector wise Gas Utilization (June, 2011)

Total consumption: 166 MMSCMDSource: Infraline

Power37%

Fertilizer23%

CGD5%

Refineries12%

Petrochemicals3%

Sponge Iron4% LPG

4%

CGD- Commercial

& Industrial4%

Internal

Consumption1%

Others

7%

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INDIAN GAS SECTOR :PROJECTED DEMANDSUPPLY GAP

INDIA WILL CONTINUE TO REMAIN GAS DEFICIT MARKET

2011-12 2016-17

Total Supply (Domestic Gas + LNG) -

Conservative

249.58 326.15

Demand 326.64 485.53

Demand-Supply Gap(Conservative Scenario)

(77.06) (159.38)

Total Supply (Domestic Gas + LNG) -

Optimistic

269.08 341.55

Demand 326.64 485.53Demand-Supply Gap

(Optimistic Scenario)

(57.56) (143.98)

Source: As per XI - XII Plan, In-house data

In MMSCMD

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OVERVIEW OF GAIL (INDIA) LIMITED

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8

GAIL - SNAPSHOT

Integrated Natural Gas Company

25+ Years of Experience & Expertise

Government of IndiaMajority Stakeholder

Listed in BSE, NSE & London Stock Exchange

10 Years Turnover CAGR13%

10 Years PAT CAGR10% EmployeesAround 3800

Rated as Asias top Gas Utility Company for 2010 by Platts

Indias Number One Gas Company

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VISION

Be the leading company in Natural Gas &

beyond with global focus, committed to

customer care, value creation for all

stakeholders & environment responsibility

MISSION

To accelerate & optimize the effective use of

Natural Gas & its fractions to the benefits

of the national economy

GAILS VISION & MISSION

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GAILS STRATEGY

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VAGHODIA

USAR

VIJAIPUR

PATA LAKWA

NATURAL GAS PIPELINE

LPG PIPELINE

LPG PLANT

PETROCHEM PLANT

TRIPURA

KG BASIN

VSPL

CAUVERY

BASIN

RAJASTHAN

VAGHODIA

PATA LAKWA

NATURAL GAS PIPELINE

USAR

VIJAIPUR

LPG PIPELINE

LPG PLANT

PETROCHEM PLANT

TRIPURA

KG BASIN

VSPL

CAUVERY

BASIN

RAJASTHAN

GAILs BUSINESS PORTFOLIO

GAILs Assets LocationLPG PIPELINES

2038 KMS

(3.8 MMTPA)

GAS PIPELINES

8644 KMS

(170 MMSCMD)

11 States

GAS PROCESSING7 Plants

(1.4 MMTPA)

PETROCHEMICALS

410,000 TPA (PE)

Being upgraded to 900,000 TPA.

UPCOMING PETROCHEMICALS

BCPL (JV)280,000 TPA (PE&PP)

OPaL - 1.44 MMTPA (PE & PP)

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OFC

E&P Blocks

Myanmar Block

DAHEJ LNG

GAILs BUSINESS PORTFOLIO

GAILs Assets Location OFC CONNECTIVITY

13,000 KMS

E&P

27 blocks (2 Overseas) & 1 CBM block

R-LNG

PLL- Dahej (10 MMTPA)RGPPL- Dabhol (Upcoming- 5MMTPA

PLLKochi (Upcoming-2.5 MMTPA)

Subsidiary

GAIL Gas Ltd (City Gas, CNG corridor

& related infrastructure)Gas Retailing (8 JV)

IGL,MGL,BGL,CUGL,GGL, MNGL,

TNGCL, AGCL

Power

156 MW GSEG, Hazira2150 MW RGPPL, Dhabol

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13

LNG

Existing

Transmission Pipelines

GAILs Existing Pipeline

Upcoming

GAILs Planned Pipeline

RILs East West Pipeline

RILs Planned Pipeline

GSPCs Planned Pipeline

City Gas/ CNG

Existing

Planned

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 & II

10 mmtpa*

HAZIRA

2.5 mmtpa

COIMBATORE

MANGALORE

MUMBAIBHUBANESHWAR

KRISHNAPATNAM

NELLORE

CHENNAI

TUTICORIN

TIRUCHCHIRAPALLI

HASANBANGALORE

KOLHAPUR

SOLAPURKAKINADA

VIJAYAWADA

DAMRA

DABHOL

5 mmtpa

KANJIKKOD

AURAIYA

GOA

CUTTACK

VIJAYPUR

KANPUR

NANGAL

GURGAUN

PUNE

BHARUCH

SURAT

HYDERABAD

RAJAMUNDRY

GAS INFRASTRUCTUREEXISTING & UPCOMING

BHOPAL

KOCHI

5 mmtpa

ENNORE

2.5 mmtpa

BARMER

MANGALORE

2.5 mmtpa

TRANSMISSION CAPACITY TO GROW SIGNIFICANTLY IN COMING YEARS

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GAILS OTHER BUSINESS INITIATIVES

Aggressive Plans to diversify into Renewables

& Power Sector - Focus on : Wind Energy & Solar Energy

Gas based Power Plant

Participating in MyanmarChina Gas

Pipeline Project. Pursuing Transnational pipeline Projects

Pursuing business opportunities in Gas

Rich Countries in areas of-

Shale Gas

E&P Farm-in

LNG Projects

Gas based petrochemicals.

Gas Processing.

City Gas distribution.

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GAILS GLOBAL FOOTPRINTS

OVERSEAS PRESENCE

EGYPT

EQUITY IN 2 GAS RETAILING

COMPANIES

OVERSEAS OFFICE IN CAIRO

MYANMAR

PARTNER IN A1, A3 E&P BLOCKS

PARTICIPATION IN MYANMAR CHINA

PIPELINE

CHINA

EQUITY PARTNER IN CHINA GAS

50:50 JV WITH CHINA GAS

SINGAPORE

100% SUBSIDIARY, GAIL GLOBAL

SINGAPORE (PTE) LTD

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GAIL- JVS & SUSIDIARIES

Joint Ventures: City Gas Distribution

MGL(BG) AGL (HPCL) BGL (HPCL) CUGL (BPCL) GGL (IOCL) IGL (BPCL) MNGL (BPCL)

TNGCL

GAIL Gas Limited

Wholly owned subsidiary of GAIL.

Incorporated for smooth implementation of CGD projects in the country. Authorized by PNGRB to implement CGD projects in Sonepat, Kota,

Dewas and Meerut.

Future Plans:

Commitment for Highways to Greenways.

CNG corridors along major highways. Investment in potential cities

TNGCL

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GAIL- JVS & ASSOCIATE COMAPNIES

International JVs

GAIL China Gas Global Energy

Holdings Ltd.

South East Asia Gas PL Co. Ltd.

JVs (Others)

Petronet LNG Limited.

Ratnagiri Gas and PowerPvt. Ltd. (RGPPL)

Domestic: GSEG

International

NATGAS (Egypt)

Fayum Gas Company (Egypt)

China Gas

Associate Companies

Petrochemical JVs

Brahmaputra Cracker & Polymer Limited ( BCPL )

Petrochemical Project at Dibrugarh, Assam

GAILs equity share 70%

ONGC Petro-additions Ltd. (OPaL)

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In Million US$

Revenue

ProfitAfte

rTax

TRACK RECORD OF STEADY GROWTH

Consistent growthin Top & BottomLines

10 years CAGR forRevenue : 13 %

10 years CAGR forPAT : 10 %

GAILS FINANCIAL PERFORMANCE

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BUSINESS DEVELOPMENT ACTIVITIES INGAIL (INDIA) LIMITED

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OBJECTIVE OF BD GROUP

To explore and identfy business opportunities in India &abroad along the natural gas value chain in line with

strategic objectives of GAIL.

Type of business activities pursued by GAIL :

Greenfield Projects

Equity Investments

Farm-In Opportunities

Business Diversification

Mergers & Acquisitions

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ROLE OF BD GROUP

Identification of business opportunity In-house Environment scanning.

Interaction with companies, investment banks & tradechambers in India & abroad.

Interaction with MoP&NG & Indian missions abroad.

Signing of various agreements for sharing information /deciding terms of cooperationCA, MoU, SoU etc.

In-house analysis of the business opportunity. Putting proposal to GAILs management for pursuing the

opportunity

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ROLE OF BD GROUP

Submission of EoI / Indicative Bid expressing intent toparticipate.

Carry out due-diligence for existing projects or assets

Carry out PFR / DFR for new project

Transaction related negotiations

Obtaining Investment Approval from GAIL Board

Finalisation and execution of Participation Documents /

Deeds.

Monitoring performances ofGAILs domestic & overseasinvestments.

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FOCUS AREAS OF BD GROUP

E & P Farm-In (Gas Blocks Overseas)

Gas Sourcing

Midstream Natural Gas Pipelines (Overseas)

LNG ProjectsLNG Regas Terminals / Equity LNG / FSRU

Transnational Pipelines

M&A -

Shale Gas acreages,

Integrated LNG Liquefaction Terminals

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FOCUS AREAS OF BD GROUP

Gas Processing Projects

Diversification

Downstream

Gas based Petrochemical Projects

Gas based Power (domestic)

Renewable Energy-

Solar, Wind

Overseas City Gas Projects

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GasSourcing

Acquisition ofshale

gas assets in US

Equity stake inintegrated

LNG Project

Signing of GSPA &Other important

Agreements related

To TAPI

Finalization oflocationof FSRU

SHORT TERM MILESTONES 2012-13

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Midstream &Downstream

P/L project inGhana

Gas Processing

Ghana &Nigeria

DomesticPetrochemical

projects

Overseas CGDproject- Egypt

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Diversification

Investment approvalFor gas based power

Project

Solar Power-Participation in

Bidding process underJNNSM phase II &

solar project in

Rajasthan

Small Scale LNGProject

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Thank You

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GAS SOURCING

Exploration & Production (E&P)

Participation in Bidding Rounds - (NELP) / CBM Explore participation in international E&P opportunities

Transnational Pipelines

Pursuing TAPI pipeline project

LNG Projects

LNG Sourcing / LNG liquefaction / FSRU

Sourcing of LNG from upcoming LNG projects-short, medium & long term basis

Expansion of domestic RLNG capacity Exploring possibilities of gas supplies by FSRU

on East Coast

M&A Opportunities

Looking to acquire Shale Gas acerages

Farm-In - Producing Gas Blocks Explore equity participation in integrated

LNG project overseas for sourcing equity gas

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MID-STREAM

Natural Gas PipelinesDomestic opportunities

Bidding for transmission pipeline projects

invited by PNGRB

Construction of Spur lines joining main

transmission networks

Natural Gas Pipelines

International opportunities

Pursuing participation in pipeline projects

abroad

LPG Pipelines

Expansion of existing LPG transmission

capacity

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DOWNSTREAM

Gas Processing Exploring gas processing opportunities

in gas rich countries

City Gas / CNG

Participation in upcoming domestic city gas

projects through GAIL Gas / JVs with Oil PSUs

Gas based Petrochemicals Domestic capacity expansion.

Participation in greenfield projects

Explore project opportunities in gas

rich countries.

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DIVERSIFICATION

Gas Based Power Plants Exploring gas based power opportunities

Renewable Energy Projects

Renewables- focus areas for GAIL

Focus on solar, wind & biomass projects

Small Scale LNG

Pursuing SSLNG to develop small / stranded

gas fields

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INDIAN GAS SECTOR - AN OVERVIEW

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LNG INFRASTRUCTURE IN INDIA

2 operating LNG regasificationterminals.

Petronets LNG Terminal at Dahejwith a capacity of 10 MMTPA .

Terminal at Hazira with a capacity of3.3 MMTPA being operated by Shell& Total.

A LNG terminal at Dabhol with acapacity of 5 MMTPA is expected tobe commissioned later this year.

PLL is also working on anotherterminal at Kochi with initial capacityof 2.5 MMTPA & with a provision ofexpansion upto 5 MMTPA.

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DOMESTIC GAS SUPPLY OUTLOOK

(FIGURES IN MMSCMD)

Source: As per XI - XII Plan, In-house study

Supply Sources 2007-08 2011-12 2013-14 2016-17

ONGC (Firm + Indicative) 47.19 51.65 49.00 42.36

Oil 10.00 10.00 10.00 10.00

Pvt. / JVs (As per DGH) 22.21 102.57 101.00 99.09

Projected Domestic SupplyConservative

79.40 164.22 160.00 151.45

Additional RIL 0.00 2.00 2.00 3.20

GSPC 0.00 4.50 4.50 4.50

Additional Gas Anticipated 0.00 13.00 10.00 7.70

Total Projected SupplyOptimistic

79.40 183.72 176.50 166.85

Based on revised estimate of ONGC (Firm + Indicative) and DGH

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LNG SUPPLY OUTLOOK

(FIGURES IN MMSCMD)


LNG Terminal 2007-08 2011-12 2013-14 2016-17

Dahej 6.50 12.00 12.00 12.50

Hazira 2.50 2.50 5.00 5.00

Dabhol - 5.00 5.00 5.00

Kochi - 2.50 2.50 5.00

Mangalore - - - -

Ennore - - - -

Mundra - - 2.50 -

Total LNG Supply (MMTPA) 9.0 22 24.50 27.50

Total LNG Supply (MMSCMD) 36 85.36 95.06 106.70

New terminals: Ennore, Mangalore MundraExpansion: Hazira and Kochi

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OTHER SUPPLY SOURCES

Pipeline 2013-14 2016-17

IPI 30 30

TAPI 38 38Total 68 68

India is pursuing transnational pipelines like Iran Pakistan

India (IPI) & Turkmenistan Afghanistan Pakistan India(TAPI) Pipeline projects.

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TOTAL GAS SUPPLY OUTLOOK

2007-08 2011-12 2013-14 2016-17

Total Domestic Gas + LNG + Intl

Pipelines (Conservative)

114.32 249.58 323.06 326.15

Total Domestic Gas + LNG + Intl

Pipelines (Optimistic)114.32 269.08 339.56 341.55

(FIGURES IN MMSCMD)


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CONSOLIDATED SECTOR WISE DEMAND PROJECTIONS

Sector 2007-08 2011-12 2013-14 2016-17

Fertilizers 41.02 79.36 85.84 96.55

Power 73.68 148.38 179.44 238.84

City Gas 12.08 15.83 18.46 23.26

Industrial 15.00 21.96 26.57 35.37

Petrochemical / Refineries / InternalConsumption 25.37 33.25 38.07 46.64

Sponge Iron / Steel 6.00 27.86 33.71 44.87

Total 173.15 320.58 382.09 485.53

Assumptions:

o For power, fertilizer and steel sector, the projections are given by MoP and MoSrespectively.

o For Industrial sector, annual growth rate has been taken from EIU estimates.o For City Gas and Petrochemicals growth rate of 8%, 5% respectively are

considered.o For Steel sector growth rateof 6% is assumed after 2011-12.


(FIGURES IN MMSCMD)


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PROJECTION BY WORKING GROUP OF XI 5 YEAR PLAN

Sources 2007-08 2008-09 2009-10 2010-11 2011-12

ONGC + OIL 57.28 58.42 55.69 54.67 51.08

Pvt. / JVs (As per DGH) 23.26 61.56 60.28 58.42 57.22Projected Domestic

Supply - Conservative 80.54 119.98 115.97 113.09 108.3

Additional Gas Anticipated - - 74 84 94

Total Projected Supply -

Optimistic 80.54 119.98 189.97 197.09 202.3

MMSCMD

LNG SUPPLY OUTLOOK

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LNG SUPPLY OUTLOOK


LNG Supply Source 2007-08 2008-09 2009-10 2010-11 2011-12

Dahej 5 5 7.5 10 10

Hazira 2.5 2.5 2.5 2.5 2.5

Dabhol 1.2 2.1 5 5 5

Kochi - - - 2.5 5

Mangalore - - - - 1.25

Total LNG Supply(MMTPA) 8.7 9.6 15 20 23.75

Total LNG Supply

(MMSCMD) 30.45 33.6 52.5 70 83.13

CONSOLIDATED SECTORWISE GAS DEMAND OUTLOOK -

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CONSOLIDATED SECTORWISE GAS DEMAND OUTLOOK


MMSCMD

Sector 2007-08 2008-09 2009-10 2010-11 2011-12

Fertilizers 41.02 42.89 55.9 76.26 76.26

Power 79.7 91.2 102.7 114.2 126.57

City Gas 12.08 12.93 13.83 14.8 15.83

Industrial 15 16.05 17.17 18.38 19.66

Petrochemical /

Refineries / Internal

Consumption 25.37 27.15 29.05 31.08 33.25

Sponge Iron / Steel 6 6.42 6.87 7.35 7.86

Total 179.17 196.64 225.52 262.07 279.43

OVERALL DEMAND SUPPLY BALANCE

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OVERALL DEMAND SUPPLY BALANCE


MMSCMD

2007-08 2008-09 2009-10 2010-11 2011-12

Total Supply I -

Conservative 110.99 153.58 168.47 183.09 191.42

Total Supply II -Optimistic 110.99 153.58 242.47 267.09 285.42

Demand (MMSCMD) 179.17 196.64 225.52 262.07 279.43

Demand Supply Gap I -

Conservative 68.18 43.06 57.05 78.98 88.01

Demand Supply Gap II -

Optimistic 68.18 43.06 -16.95 -5.02 -5.99

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REGULATORY STRUCTURE

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REGULATORY STRUCTUREIN OIL & GAS SECTOR

Ministry of Petroleum

& Natural Gas

Director General of

Hydrocarbons

E&P

Oil Industry

Development Board

Sector Development

Petroleum & Natural

Gas Regulatory Board

Downstream Activities

E&P Cos Gas Mktg Cos Oil Refining Cos Oil Mktg Cos

CGD PROJECTS EXISTING & UPCOMING CITIES

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CGD PROJECTS- EXISTING & UPCOMING CITIES

Existing Infrastructure:

Covers 61 cities (41-Operating & 20 Under Construction) Total players: 23

CNG stations: 580

Households served: About 1.2 million

Vehicles catered: About 1 million

Gas volumes sales to CGD: 10-11 mmscmd

Proposed CGD networks:

Several CGD networks are proposed across the country. Over the next 23 years about 50-60 cities are likely to be awarded

by the Regulator which is envisaged to go up-to 243 cities.

In a short period of time the landscape for city gas is likely to stand

altered dramatically.

P i l A f C i E S

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Potential Areas of Cooperation- Energy Sector

Market

India offers an stable, large and growing market for Russian exports ofoil and gas.

Upstream

Government of India has launched the IX rounds New Exploration

Licensing Policy (NELP) on 15th October, 2010. Russian companiescan join hands with Indian cos in bidding for oil & gas blocks.

Downstream

Opportunities exists for Russian companies to participate indownstream oil and gas projects in India particularly in green-fieldrefineries & petrochemicals, City Gas Distribution projects etc.

LNG Sourcing

Indian companies will be keen to explore LNG sourcing opportunitywith Russian companies & also the opportunity to participate in LNG

Bd 03 Sep11-III

Documents

Transcript of Bd 03 Sep11-III