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GROWTH STRATEGY FOR GAIL (INDIA) LIMITED

IN NEXT FIVE YEARS

BYGAIL (India) LIMITED

9th May, 2007

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CONTENTSGAIL – FUTURE PLANINFRASTRUCTURE - PIPELINELNG TERMINALSGAS SOURCING GAS MARKETING AND TRANSMISSIONE & PPETROCHEMICALSCITY GAS BUSINESSGLOBAL VENTURESCONCLUSION

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Explore international Opportunities

-Integrated Players or

Select partsof value chain

. . . Focused on four areas

Diversify downstream presence

Move upstream

Protect NG

business

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Approach

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3

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GAIL – FUTURE PLAN

Strengthen NG BusinessNG TransmissionGas SourcingGas Marketing

Upstream integration E & P (Domestic & Overseas)

Downstream integrationLNG TerminalsPetrochemicalsCity gas

Global diversificationacross value chain

Upstream

Trading

Transmission

Retail

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INFRASTRUCTURE

• EXISTING TRANSMISSION CAPACITY- 130 MMSCMD

• INFRASTRUCTURE CREATED IN 2006-07- 13 MMSCMD

• INFRASTRUCTURE UNDER IMPLEMENTATION- 12 MMSCMD

• INFRASTRUCTURE PLANNED IN NEXT 5 YEARS-136 MMSCMD

NEW INFRASTRUCTURE AIMED AT TAPPING NEW SOURCES OF DOMESTIC GAS & LNG AND AIM TO REACH NEW MARKETS

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NEW INFRASTRUCTURE PLANNED

GAIL IS PLANNING TO INVEST ANOTHER 18000 CRORES IN AUGMENTATION AND CREATION OF NEW INFRASTRUCTURE

MP and UP57112 to 24UPGRADATION OF VIJAIPUR-JAGDISHPUR PIPELINE

MP and UP50520 to 74UPGRADATION OF GREP PIPELINES

Kerala and Karnataka84012KOCHI-KANJIRKKOD-MANGALORE / BANGALORE

Maharastra and Karnataka.

73012DHABOL-BANGALORE PIPELINE

UP, Bihar, Jharkhand and WB.

87612JAGDISHPUR-HALDIA PIPELINE

Haryana and Rajashthan31025CHAINSA-GURGAON- JHAJJAR-HISSAR PIPELINE

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24 to 74

Capacity(MMSCMD)

UP, Haryana and Punjab610DADRI-BAWANA-NANGAL PIPELINE

Gujrat and MP610UPGRADATION OF DVPL PIPELINES

States Being Covered Length (KM)

Pipeline Project

6TUTICORINKOCHI

COIMBTORE

EXISTING PIPELINE, PIPELINE UNDER EXISTING PIPELINE, PIPELINE UNDER EXCUTION AND PROPOSED PIPELINEEXCUTION AND PROPOSED PIPELINE

MANGLORE

HASAN BANGLORECHENNAI

Haldia

KAKINADADABHOL

MUMBAI PUNE

DAHEJVIJAIPUR

HYDERABAD

BHUBANESHWAR

VIZAG

JAGDISHPUR

KANJIRKKOD

A 1 BLOCK, MYANMAR

KOTA

MATHANIA

PHOOLPUR

BHATINDA

NELLORE

TIRUCHCHIRAPALLI

KOLHAPURGADAG

GAYA

BOKARO

JAMNAGAR

HAZIRA

AURAIYA

DELHI

BANGLADESH

NEPAL

DADRI

AIZAWL

IMPHALSHILLONG

DISPUR KOHIMA

ITANAGAR

GANGTOK

CHITRADURGA

RAICHUR

Nangal

DEWAS

PITHAMPURE

HVJ

DVPL PIPELINE PROJECT COMPLETED

PIPELINE PROJECT UNDER EXECUTION

INDORE

JAGOTIi

KELARAS

MALANPUR

- THULENDI-IFFCO, PHULPUR-- KELARAS-MALANPUR

- VIJAIPUR-KOTA-- DAHEJ-URAN -- DABHOL-PANVEL-- JAGOTI-PITHAMPUR- -IBRAHIM- DHOLPUR

DHOLPUR IBRAHIM

HVJDVPL

GREP THULENDI

DUPL

DPPL GREP

NEW PROPOED PIPELINE --Dadri- Bawana- Nangal Pipeline--Vijaipur-Jagdishpur--Jagdishpur—HaldiaDabhol-Bangalore

-- Kochi-Kanjirkkod- Bangalore/ Mangalore

Capacity Augmentation

BHUTAN

BAWANA

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LNG TERMINALS•GAIL promoted company Petronet LNG has commissioned the first LNG terminal at Dahej in 2004. The capacity of the terminal is being augmented to 10 MMTPA from 5MMTPA.

•GAIL as a promoter in RGPPL is working on completion of 5 MMTPA capacity LNG terminal.

•GAIL promoted company Petronet LNG is also working for creation of new LNG terminal at Kochi for a capacity of 2.5 MMTPA.

LNG INFRASTRUCTURE IS PLANNED TO MATCH THE POSSIBLE IMPORT OF 23.75 MMTPA IN INDIA IN NEXT FIVE YEARS

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GAS SOURCING INITIATIVES• DOMESTIC GAS

- MoU WITH RIL

- MoU WITH ONGC

• LNG

- TRANCHE -A OF RAS GAS

- GSA FOR IMPORT OF LNG FROM IRAN.

- ADDITIONAL IMPORT AT DAHEJ AND HAZIRA ON SHORT TERM/SPOT FOR RGPPL & OTHER INDUSTRIES

- SUPPLY OF LNG FROM GORGON PROJECT AUSTRALIA

- FUTURE LNG SUPPLY FROM ALGERIA

TRANSNATIONAL PIPELINE

• - IRAN – PAKISTAN –INDIA IPI PIPELINE

• - TURKMENISTAN-AFGHANISTAN-PAKISTAN-INDIA PIPELINE

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NEW GAS DISCOVERIES

Domestic Gas • Eastern Cost

Upcoming LNG Terminals• Dabhol (5 MMTPA)• Kochi (2.5 MMTPA)

Existing LNG Terminals• Dahej (5 to 10 MMTPA)• Hazira (2.5 MMTPA)

Cross Border Pipelines• Iran-Pakistan-India• Turkmenistan-

Afghanistan-Pakistan-India

GAS SUPPLY AUGMENTATION

DABHOL

KOCHI

DABHOL5 mmtpa

KOCHI5 mmtpa

LNG TERM’s- Upcoming

DAHEJ

HAZIRA

DAHEJ I & II10 mmtpa*

HAZIRA2.5 mmtpa

LNG TERM’s- Existing

TURKMENISTAN

IRAN

TRANS – NATIONAL P/L

GAIL IS PLANNING TO SOURCE ANOTHER 30 MMSCMD GAS IN NEXT 3 YEARS FROM VARIOUS SOURCES

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GAS MARKETING AND TRANSMISSION

GAS MARKETING:EXISTING: 70 MMSCMD

SHORT TERM PROJECTION:

100 MMSCMD (BUSINESS AS USUAL)

120 MMSCMD (OPTIMISTIC)

GAS TRANSMISSION:EXISTING: 81 MMSCMD

SHORT TERM PROJECTION:150 MMSCMD (BUSINESS AS USUAL) 200 MMSCMD (OPTIMISTIC)

PIPELINE INFRASTRUCTURE UTILIZATION WILL BE LARGLY IMPROVED BY ADDITIONAL GAS AVAILIBILITY FROM KG BASIN & LNG IMPORTS

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Increase in Number of Blocks to 30 (12 Deep Water, 9 On land, 9 Offshore Including 3 Farm in)

Acquired 3 CBM blocks in CBM III bidding round.

GAIL is a joint operator (along with GSPC) in Onland block in Rajasthan.

Test production is under progress from onland block in Cambay.

Development Plan and GSA for Blocks A-1 and A-3 block, Myanmar are under finalisation.

Out of 9 blocks in which drilling has commenced, discoveries have been made in 3 blocks.

EXPLORATION AND PRODUCTION

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PETROCHEMICALSPata Expansion

PROJECT COST : 647 CRORES (APPROVED)CAPACITY : 310 KTPA TO 440 KTPASTATUS : COMPLETION BY JUNE 2007.

Assam Cracker PROJECT COST : 5460 CRORESCAPACITY : 220 KTPA (PE) & 60 KTPA (PP)STATUS : GAIL PROMOTED JV HAS ALREADY ACQUIRED

LAND FOR THE PROJECT. PROJECT IMPLEMENTATION IS TARGETED IN FIVE YEARS.

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RETAIL GAS MARKET

PHOOLPUR

BAREILLYDELHI

AGARTALA

KANPURLUCKNOW

PATNA

AHMEDABADRAJKOT

UJJAIN

AGRA

JHANSI

Cit Gas/ CNGExisting (8 cities)Planned (28 Cities)

MUMBAI

HYDERABAD

FARIDABAD

PUNE

VARANASIJODHPUR

JHARIA

SHOLAPUR

BANGALORE

CHENNAI

KOLKOTA

RAJMUNDARY

VIJAYWADA

VADODRA

NAVI MUMBAI

THANE

GURGAONNOIDA

ALLAHABAD

MATHURA

GWALIOR

INDORESURENDRANAGAR

KOTA

SILCHAR

KOCHI

LUDHIANA

GHAZIABAD

PANIPAT

CHANDIGARH

AMRITSAR

JAIPUR

UDAIPUR NEEMRANA-BHIWADI

CITY GAS BUSINESS

City Gas Distribution In IndiaCities with network in

proximity to existing Transmission P/Ls - 25Network - 6,500 KmsCNG Stations - 376CNG Vehicles - 350000Domestic Connection- 576000Commercial Connection – 23300Industrial Connection - 700

Growth From 8 Existing (IGL, MGL, BGL,TNGCL, CUGL, GGL, MNGL, AGCL) to 28.More Cities as Pipelines Reach New AreasIMPLIMENTATION OF CITY GAS IN NEW CITIES ALONG THE PROXIMITY OF EXISTINGAND NEW PIPELINES CAN SAVE FOREIGN

EXCHANGE OUTGO ON ACCOUNT OF SAVINGS IN CONSUMPTION OF LIQUID FUELS

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GLOBALIZATIONGAIL Global Singapore Pte Ltd.Aggressive Approach in Line with broad objective of Supply & Security eg. A1& A3-block Myanmar

RETAIL (CNG) OVERSEASEquity Participation In

- Fayum Gas Company - Shell CNG Egypt - Natgas Egypt - China Gas Holding

GLOBAL VENTURES

FUTURE PLANParticipation in overseas E&P bidding round and farm in opportunities in Asia Pacific, Middle East, CIS and Africa.Petrochemical business in Iran, Saudi Arab, Egypt and Uzbekistan.City gas ventures in Libya, Uzbekistan, Indonesia, Syria etc.

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CONCLUSION• GAIL CONTINUES TO BUILD INFRASTRUCTURE FOR

NATURAL GAS SECTOR IN THE COUNTRY (LNG, TRANSMISSION AND DISTRIBUTION) AND HAS MEGA PLANS IN COMING YEARS

• GAIL AIMS TO MAINTAIN ITS DOMINANT POSITION IN CORE BUSINESS AREA OF GAS TRANSMISSION & MARKETING

• GAIL’S STRATEGY IS TO INTEGRATE VERTICALLY IN E&P SECTOR (UPSTREAM) AND IN RETAIL GAS & PETROCHEMICALS (DOWNSTREAM).

• GAIL PURSUES GLOBALIZATION ROUTE FOR ENERGY SECURITY OF THE COUNTRY AND DIVERSIFICATION ACROSS VALUE CHAIN

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THANK YOU