India: LNG Sector Overview

Mumbai, 9th February 2018

Seminar

LNG Opportunities in India – Norwegian Offerings

Confidential – Do Not Circulate Slide

Agenda

2

LNG Consumption, Demand Forecast

LNG / Gas Infrastructure

Key Issues

Confidential – Do Not Circulate Slide

Europe83 94

LNG being pushed into Europe in 2020.Declining domestic production requiresincreasing LNG imports in the later years.

2017 2020 2030

Americas

211916AsiaMENA

33036

2017 2020 2030

Pipeline gas imports from US toMexico reduces LNG importrequirements, while the newerimporters such as Uruguay andColombia push up LNG demand.

2017 2020 20302017 2020 2030

Growing LNG demand as domesticgas production cannot keep up withrequirement. Potential new demandcreation during period of low prices.

Reform of subsidizeddomestic gas prices allowsfor further LNG imports.

Note: The above units are all in mmt of LNG.

10

19 21 199 233

53

LNG Demand Forecast

Source :FGE

3

Confidential – Do Not Circulate Slide

Established Asian Markets LNG

Demand Growth (base year 2016-17)

New Asian Markets LNG Demand

Growth (base year 2016-17) 50

60

50 40

4030

30

2020

10 10

00

-10

Thailand

Bangladesh

Malaysia

Vietnam

Indonesia

Pakistan

SingaporeJapan South Korea Taiwan India China

• •China and India account for the bulk ofincremental growth in established Asianmarkets.

In new Asian markets, incrementalgrowth is seen across the board, withPakistan and potential new entrantBangladesh driving it.

11

mm

t

mm

t

Asia LNG Demand Forecast

Source :FGE

4

Confidential – Do Not Circulate Slide

29.7 29.9 33.6 31 28.7 28.6 29.4 29

5.6 6.77.5

8.2 10.2 6 6.2 6

56.3 55.852 53.7 54.1

57.9 56.9 57

8.4 7.6 6.9 7.2 6.9 7.5 7.5 8

0

20

40

60

80

100

120

1990 1995 2000 2005 2010 2015 2016 2017

Others

Coal

Natural Gas

Oil

P*:Provisional

Gas share in India energy basket increased from 5.6% to 10.2% during 1990-2010;

However its share fell during 2010-2015

▪ Decline in domestic Gas production & high price of LNG

As per IEA, India gas demand growth is estimated @ 4.6% p.a. up to 2040

Gas share in India energy mix to rise to 20% by 2025 as per GOI vision 2030

5

mtoe252 316 394 541 685

Primary Energy Mix-India

Overview –Indian Gas Sector

195

Source : BP Stats 2017

730(P*)723

Confidential – Do Not Circulate Slide

Gas Demand & Supply

6

Bulk of gas demand is projected to be from the fertilizer sector, followed up by the power

sector. But Power sector demand is contingent on policy decision.

RLNG ( and thereby LNG imports) are imperative to bridge the demand supply deficit

Source : PPAC

Latent demand not captured

Confidential – Do Not Circulate Slide

LNG Imports Trend

7

Low Oil Prices

Source : IGU 2017/ PPAC

High Oil Prices

Low Oil Prices

0

5

10

15

20

25

2012 2013 2014 2015 2016 2017

(P)

mmtpa

High Oil Prices

Rising trend in Oil Prices

(P): Provisional

LNG / Gas Infrastructure

Confidential – Do Not Circulate Slide 9

Company Length (KM)Capacity

(MMSCMD)

GAIL 10977 206

Reliance RGTL 1469 80

GSPCL 2198 43

AGC 1000 6

IOCL 140 9.5

ONGC 24 6

RGPL 312 3.5

Total 16120 354

Existing Natural Gas Pipeline

Network

Company Length (KM)Capacity

(MMSCMD)

GAIL 5486 139

GITL 2035 78

GIGL 2777 119

APGDC 391 90

KEI-RSOS PEPL 250 36

Total 10939 462

Natural Gas Pipelines under

execution/construction

Gas Infrastructure

Dahej

Hazira

Swan

H-Energy

Dabhol

Kochi

Ennore

Dhamra

Mundra

Digha

Kakinada

S-HPCL

Confidential – Do Not Circulate Slide

Gas Infrastructure – LNG import Terminal

Sr No Terminal Capacity (MMTPA) Comment

1 PLL Dahej existing 15.0 Operational

2 Shell Hazira 5.0 Operational

3 RGPPL Dabhol 3.5 Operational

4 PLL Kochi 5.0 Operational

Sub Total 28.5

Under Execution / Expansion

1 Dahej Expansion 2.5 FY 19 Completion

2 GSPC LNG, Mundra 5.0 FY 18 Completion

3 IOC Ennore 5.0 FY 18 completion

4 HPCL Shapoorji Energy pvt.ltd., Chhara 5.0 FY 20 completion

5 Swan Energy-Jafrabad FSRU 5.0 FY 20 completion

6 H-Energy West coast terminal, Jaigarh 4.0 FY 20 completion

Sub Total 26.5

Expected Capacity by 2020 55

Proposed/Planned

1 GAIL, Kakinada 3.5 Prospective

2 East Coast terminal, Digha, 3.0 Prospective

3 Adani Enterprises, Dhamra 5.0 Prospective

4 Mumbai Port 5.0 Prospective

Sub Total 16.5

10

Key Issues

Confidential – Do Not Circulate Slide

Key Issues

12

Gas Market

Supply

Pricing

Competition

Infrastructure

Consumer

Regulation

▪ Inadequate pipeline grid▪ Location of LNG terminals▪ CNG stations inadequate▪ LNG dispensing Unit promotion▪ LCNG stations promotion

▪ Market driven Policies▪ Mandated use of Gas▪ Open access of Pipeline & Terminals▪ Rationalization of taxes, duties & levies - GST ▪ Review of City gas distribution contracts

▪ Unbundling of Gas-Sector▪ Provide incentives to

private player to enter

▪ Availability of Gas at Point of use

▪ Promotion of Gas in automotive sector

▪ Volatility of prices▪ Benchmark – HUB

based pricing

▪ Limited domestic Gas availability

▪ Dependence on LNG import

Thank You