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“Partnerships: The Way Forward for Asian LNG Producers and Consumers” B C Tripathi GAIL (India) Limited 10 September 2013
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Page 1: “Partnerships: The Way Forward for Asian LNG Producers and … · 2013-09-17 · Dabhol-Bangalore P/L Kochi-Koottanad-Bangalore-Mangalore P/L Haldia-Jagdhispur P/L CHENNAI TUTICORIN

“Partnerships: The Way Forward for Asian LNG Producers and Consumers”

B C TripathiGAIL (India) Limited10 September 2013

Page 2: “Partnerships: The Way Forward for Asian LNG Producers and … · 2013-09-17 · Dabhol-Bangalore P/L Kochi-Koottanad-Bangalore-Mangalore P/L Haldia-Jagdhispur P/L CHENNAI TUTICORIN

Presentation Flow

1. Rising Energy Imbalance in the World

2. Asian LNG Market

3. India Gas Story

4. Value through Partnerships

5. GAIL – The Partner of Choice

6. Conclusion

Page 3: “Partnerships: The Way Forward for Asian LNG Producers and … · 2013-09-17 · Dabhol-Bangalore P/L Kochi-Koottanad-Bangalore-Mangalore P/L Haldia-Jagdhispur P/L CHENNAI TUTICORIN

Source: Exxon Mobil – An Outlook for Energy : A view to 2040

Regional Imbalances Growing in Asia-Pacific –Imports Rising

Page 4: “Partnerships: The Way Forward for Asian LNG Producers and … · 2013-09-17 · Dabhol-Bangalore P/L Kochi-Koottanad-Bangalore-Mangalore P/L Haldia-Jagdhispur P/L CHENNAI TUTICORIN

Demand for LNG almost doubling over the next decade.

Asian LNG Demand Remains Robust

Page 5: “Partnerships: The Way Forward for Asian LNG Producers and … · 2013-09-17 · Dabhol-Bangalore P/L Kochi-Koottanad-Bangalore-Mangalore P/L Haldia-Jagdhispur P/L CHENNAI TUTICORIN

5

India could be Asia’s Most Important LNG market

SOURCE: Gas Industries; GIIGNL; Datamonitor; MoPNG; McKinsey

High case: 75% capacity utilisationLow case: 50% capacity utilisation

LNG importsmtpa

86837671

+1% p.a.

202520152010

Japan

34333233

0.1% p.a.

202520152010

South Korea

17151311

+3% p.a.

202520152010

Taiwan

179

13% p.a.

2025

53

3518

20

3725 12

15

258

2010

India

5645339

+13% p.a.

202520152010

China

India has Large Incremental Demand

Page 6: “Partnerships: The Way Forward for Asian LNG Producers and … · 2013-09-17 · Dabhol-Bangalore P/L Kochi-Koottanad-Bangalore-Mangalore P/L Haldia-Jagdhispur P/L CHENNAI TUTICORIN

Demand and Prices have No Correlation

Asia pays the highest price for gas

Accounts for 71% of LNG demand

New LNG Market reality: Rise ofnew suppliers and consumers

India, China, Korea, Japan tied-upLNG indexed to HH from USA

Market needs new price models tosustain growth of LNG industry

Page 7: “Partnerships: The Way Forward for Asian LNG Producers and … · 2013-09-17 · Dabhol-Bangalore P/L Kochi-Koottanad-Bangalore-Mangalore P/L Haldia-Jagdhispur P/L CHENNAI TUTICORIN
Page 8: “Partnerships: The Way Forward for Asian LNG Producers and … · 2013-09-17 · Dabhol-Bangalore P/L Kochi-Koottanad-Bangalore-Mangalore P/L Haldia-Jagdhispur P/L CHENNAI TUTICORIN

Natural gas ~10% of India’s energy mix Expected to reach 20% by 2030

32%6%53

%

1%8%

1990

36%

8%

49%

1%6%

2000

30%

11%53%

1%5%

2010

25%

20%51%

2%2%

2030OilNatural GasCoalNuclearHydro

Evolving Energy Mix – Rising Share of Gas

12 bcm

58 bcm

26 bcm

200 bcm

Page 9: “Partnerships: The Way Forward for Asian LNG Producers and … · 2013-09-17 · Dabhol-Bangalore P/L Kochi-Koottanad-Bangalore-Mangalore P/L Haldia-Jagdhispur P/L CHENNAI TUTICORIN

Transmission Pipelines

Existing Gas pipelinesLPG PipelineGAIL’s Upcoming PipelineRIL’s East West PipelineOther proposed Pipelines

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

COIMBATORE

MANGALORE

MUMBAI BHUBANESHWAR

KRISHNAPATNAM

NELLORE

BANGALORE

KOLHAPUR

SOLAPURKAKINADA

VIJAYAWADA

DABHOL5 mmtpa

KANJIKKOD

AURAIYA

GOA

CUTTACK

VIJAYPUR

KANPUR

NANGAL

GURGAUN

PUNE

BHARUCH

SURAT

HYDERABAD

RAJAMUNDRY

BHOPAL

BARMER

Hisar

Jhajjarr

Dadri –Bawana –NangalP/L

Chainsa –Jhajjar –HisarP/L

DVPL PH-II

GREP II

EWPL

KOCHI5 mmtpa

Dabhol-Bangalore P/L

Kochi-Koottanad-Bangalore-Mangalore P/L

Haldia-Jagdhispur P/L

CHENNAI

TUTICORIN

TIRUCHCHIRAPALLI

DAMRA

JABALPUR

BHILAI

JAISALMER

TAPI P/L From Pakistan

Surat Paradip P/L

HAZIRA3.6 mmtpa

GAIL KG Network

Page 10: “Partnerships: The Way Forward for Asian LNG Producers and … · 2013-09-17 · Dabhol-Bangalore P/L Kochi-Koottanad-Bangalore-Mangalore P/L Haldia-Jagdhispur P/L CHENNAI TUTICORIN

India’s Challenges and Strategies

• National Gas Grid- Shaping up rapidly, to be ready by 2017

• End-use reforms to address price sensitivity and affordability

• Building enhanced LNG import capacity (20 MMTPA in 2013 to 35 MMTPA by 2017)

• Contract new LNG at competitive prices and conditions

• Develop a portfolio of equity assets in LNG and upstream in USA/Tanzania etc.

• Develop capacity and capability to create and maintain infrastructure

• Attract required investments

Page 11: “Partnerships: The Way Forward for Asian LNG Producers and … · 2013-09-17 · Dabhol-Bangalore P/L Kochi-Koottanad-Bangalore-Mangalore P/L Haldia-Jagdhispur P/L CHENNAI TUTICORIN
Page 12: “Partnerships: The Way Forward for Asian LNG Producers and … · 2013-09-17 · Dabhol-Bangalore P/L Kochi-Koottanad-Bangalore-Mangalore P/L Haldia-Jagdhispur P/L CHENNAI TUTICORIN

Partnerships are Key to Solve Asia’s Challenges

Suppliers to offer innovative pricing methodologies• HH/Mixed Indices instead of Oil• Oil Prices volatile• Need for S curves

Need to evolve an Asian Gas Price Hub/Index • LNG prices in the region to reflect current realities• Price setting in a competitive and transparent manner

Promote a regional Asian Cooperation Forum for dialogue and consensus• Swapping of LNG volumes to reduce and optimise shipping costs• Joint acquisition of assets in Canada, Africa, Latin America and others

Page 13: “Partnerships: The Way Forward for Asian LNG Producers and … · 2013-09-17 · Dabhol-Bangalore P/L Kochi-Koottanad-Bangalore-Mangalore P/L Haldia-Jagdhispur P/L CHENNAI TUTICORIN

Cntd…

• Joint investment in import terminals, liquefaction terminals etc

• Signing of tripartite LNG supply agreements with suppliers asjoint buyers would enhance flexibility and help negotiate prices

• Knowledge sharing in areas related to CBM, Shale Gas, UCG projects, gas exploration, pipelines etc.

• Collaborate to move away from oil-indexed mechanism

Partnerships are Key to Solve Asia’s Challenges

Page 14: “Partnerships: The Way Forward for Asian LNG Producers and … · 2013-09-17 · Dabhol-Bangalore P/L Kochi-Koottanad-Bangalore-Mangalore P/L Haldia-Jagdhispur P/L CHENNAI TUTICORIN

GAIL – The Partner of Choice

• India’s Premier Integrated Natural Gas Company since 1984

• 57%+ Government of India stake

• 17%+ CAGR in 10 Year Turnover, 9%+ CAGR in 10 Year PAT

• Turnover of $8.6 billion and PAT of $731 million (2012-13)

• Strong presence in International Sourcing & Gas Trading, Pipeline transmission, Petrochemicals, Liquid Hydrocarbons & Gas Processing, E&P, City Gas Distribution, LNG terminals

• Global footprints in USA, Singapore, China, Myanmar, Egypt

• ~4000 Manpower Asset

• India’s No. 1 Gas Company and World’s No. 1 Downstream Company

Page 15: “Partnerships: The Way Forward for Asian LNG Producers and … · 2013-09-17 · Dabhol-Bangalore P/L Kochi-Koottanad-Bangalore-Mangalore P/L Haldia-Jagdhispur P/L CHENNAI TUTICORIN

GAIL Offtake from Sabine Pass

In December 2011, GAIL signed a 20-year SPA with Sabine Pass Liquefaction, LLC for supply of 3.5 million tonnes/year of LNG.

15

Page 16: “Partnerships: The Way Forward for Asian LNG Producers and … · 2013-09-17 · Dabhol-Bangalore P/L Kochi-Koottanad-Bangalore-Mangalore P/L Haldia-Jagdhispur P/L CHENNAI TUTICORIN

• GAIL also signed a 20 Year Gas Purchase agreement with Gazprom, Russia for supply of 2.5 MMTPA LNG.

Gazprom ‐ GAIL

Page 17: “Partnerships: The Way Forward for Asian LNG Producers and … · 2013-09-17 · Dabhol-Bangalore P/L Kochi-Koottanad-Bangalore-Mangalore P/L Haldia-Jagdhispur P/L CHENNAI TUTICORIN

• In September 2011, GAIL purchased 20 % stake in Eagle Ford shale assets of Carrizo Oil & Gas for USD 95 Mn

• GAIL is evaluating opportunities to acquire larger Shale Gas assets, primarily in the US and Canada

Carrizo‐GAIL

Page 18: “Partnerships: The Way Forward for Asian LNG Producers and … · 2013-09-17 · Dabhol-Bangalore P/L Kochi-Koottanad-Bangalore-Mangalore P/L Haldia-Jagdhispur P/L CHENNAI TUTICORIN

Shale Gas Deals by Indian Firms

• In May 2012, GAIL signed GSA with TurkmenGas, paving the way for ambitious TAPI pipeline.

• GAIL will receive 14 BCM / Year from the project.

TAPI GSA Signed

Page 19: “Partnerships: The Way Forward for Asian LNG Producers and … · 2013-09-17 · Dabhol-Bangalore P/L Kochi-Koottanad-Bangalore-Mangalore P/L Haldia-Jagdhispur P/L CHENNAI TUTICORIN

• In April 2013, GAIL signed TSA with Dominion through GAIL Global (USA) LNG LLC

• Booked 2.3 MMTPA liquefaction capacity in Cove Point LNG liquefaction terminal, USA

Dominion TSA Signed

Page 20: “Partnerships: The Way Forward for Asian LNG Producers and … · 2013-09-17 · Dabhol-Bangalore P/L Kochi-Koottanad-Bangalore-Mangalore P/L Haldia-Jagdhispur P/L CHENNAI TUTICORIN

Conclusion

Greater collaboration between all stake holders to unlock thepotential of LNG industry

Creating partnership between LNG Buyers/Suppliers in Asiathrough a common Asian Price Hub

Promote dialogue and consensus through an Asian Cooperation Forum

To foster partnership, we have to be flexible and create newavenues that can facilitate cross investments

GAIL is the Preferred and Low-Risk Indian Partner for Investmentsin LNG Supply Chain

Partnerships – The Prime Imperative

Page 21: “Partnerships: The Way Forward for Asian LNG Producers and … · 2013-09-17 · Dabhol-Bangalore P/L Kochi-Koottanad-Bangalore-Mangalore P/L Haldia-Jagdhispur P/L CHENNAI TUTICORIN

Thank You


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