INVESTMENT IN LNG TERMINALS &

FUTURE FOR THE DOWNSTREAM INDUSTRIES

Petronet LNG Ltd., India

By: Rajender Singh, Director(Technical)

OVERVIEW

Global & India’s Energy Consumption Scenario

Downstream Consumers & India’s Gas import Position

India-A Major Gas/ LNG Consumer

LNG Trade

Typical LNG Terminal process

LNG extended chain and PLL presence

PRIMARY ENERGY CONSUMPTION (MTOE) - WORLD

Source : BP Statistical Review-June 2012

Fuel 2005 % 2011 %

Oil 3901 37 4059 33

Gas 2501 24 2954 24

Coal 2982 28 3724 30

Nuclear 627 6 599 5

Hydro 662 6 791 6

Renewables 84 1 195 2

Total 10537 100 12322 100

36%

23%

28%

6%

6% 1%Oil

Gas

Coal

Nuclear

Hydro

Renewables

Year 2005

33%

24%

30%

5%6%2% Oil

Gas

Coal

Nuclear

Hydro

Re-new-ables

Year 2011

PRIMARY ENERGY CONSUMPTION (MTOE) - INDIA

Year 2005

Source : BP Statistical Review-June 2012

Fuel 2005 % 2011 %

Oil 120 33 162 29

Gas 32 9 55 10

Coal 184 51 296 53

Nuclear 4 1 7 1

Hydro 22 6 30 5

Renewables 2.0 1 9.0 2

Total 364 100 559 100

33%

9%

51%

1% 6%1%

Oil

Gas

Coal

Nuclear

Hydro

Re-new-ables

29%

10%

53%

1% 5%2%

Oil

Gas

Coal

Nuclear

Hydro

Re-new-ables

Year 2011

2012-13 2013-14 2014-15 2015-16 2016-17 2019-20 2026-27 2029-300

100

200

300

400

500

600

700

800

900

1000

101.1 102.5 111.26 120.63156.7 172.2

211.79 231.42227 248272

307

358

442

625

713Demand Domestic Supply

(8.0) (8.8)(9.6)

(10.9)

(12.7)

(15.7)

(22.2)

(25.3)

(3.6) (3.6) (3.9) (4.3)(5.6) (6.1)

(7.5) (8.2)

(MMSCMD)(Bcf/day)

Source : Vision 2030, Natural Gas Infrastructure in India

CURRENT GAS DEMAND &

DOMESTIC SUPPLY SCENARIO

Present Downstream Consumer-A Snap Shot

Gas Based Power Generation Feedstock

• Fertilizer Plants• Petrochemicals• Refineries

City Gas Distribution Captive fuel for furnace/boiler/power in industries Transport Sector

• Natural Gas Driven heavy vehicles• Light commercial vehicles• Trains• Barges/ Ships etc.

CNG/ LCNG fuelling stations

Gas Demand (MMSCMD)

Source : Vision 2030, Natural Gas Infrastructure in India

2012-13 2013-14 2014-15 2015-16 2016-17 2019-20 2026-27

Power 86.17 103.94 121.72 139.49 157.26 202.26 307.26

Fertilizer 59.86 59.96 60.39 72.09 96.85 105.65 110.55

City Gas 15.3 16.22 17.19 18.22 22.32 35.94 67.96

Industrial 20.00 20.00 22.00 25.00 27.00 35.00 52.06

Petchem/ Refineries / Internal Cons. 38.37 40.29 42.3 44.41 46.64 53.99 75.76

Sponge/ Iron/ Steel 7.00 8.00 8.00 8.00 8.00 10.00 12.19

Total 226.7 248.41 271.6 307.21 358.07 442.84 625.78

2012-13 2013-14 2014-15 2015-16 2016-17 2019-20 2026-270

50

100

150

200

250

300

350Power

Fertilizer

City Gas

Industrial

Petchem/ Refineries / Internal Cons.

Sponge/ Iron/ Steel

SECTOR WISE PROJECTED GAS DEMAND

13th largest gas consumer – 70 BCM (~190 MMSCMD)

5th largest LNG importer – 16 BCM (~44 MMSCMD)

Economy increasing at CAGR of 7-8% p.a. with similar increase in Energy Consumption

Share of Natural Gas in Indian Energy basket to increase from 11% to 20% by 2025

Natural gas is environmentally friendly fuel and the consumption is bound to increase for longer sustainability of any organization

INDIA – A MAJOR GAS/LNG CONSUMER

Gas Production: Exploration/Developing of gas field in India PMT Field already declining KG Basin declining

Coal Bed Methane-under development

Import of Gas Cross Country Gas Pipeline: Many projects (TAPI, IPI, Myanmar-India

etc.) under discussion but long way to go LNG -Dahej, Hazira,Dhabol terminals operating -Kochi to be commissioned soon

Development of Gas Infrastructure to make gas available to end consumers

INDIA – Balancing Demand Supply GAP

Dahej LNG

Terminal

Kochi LNG Terminal

Gangavaram LNG Terminal

INDIA’S GAS INFRASTRUCTURE

Hazira LNG

Terminal

Dabhol LNG

Terminal

Existing P/L Network : 11900 KMS (283 MMSCMD)Proposed additional P/L Network :14000 KMS (540 MMSCMD) by 2016-17

LNG Business

Current demand supply scenario in India makes for a good business case for setting up LNG terminals

Even with all the announced terminals coming on stream in future. Huge demand supply gap is expected going forward indicating scope for more LNG terminals

Huge opportunity for unlocking the latent demand through infrastructure expansion given that natural gas is cheaper than feedstock for many industry sectors

Easy availability of capital through project financing

LNG supplies are expected to increase by 2016-17 with many Australian/US projects coming on stream. Further, the domestic gas prices are expected to go higher, thus brining down the gap between domestic gas price & imported gas price

LNG CHAIN

Gas Field

Liquefaction

Storage

TransferLoading

Transportation (Loaded)

Unloading

TransferStorage

Pumping

Regasification

Vaporised LNG to Gas Consumers

Transport(Ballasted)

TYPICAL-LNG CHAIN COST

InternalConsumption

Metering

SHIPLNG TANK

LPPUMP

HP PUMP

RECONDENSOR GTG

HW PUMP

STV-C

WS PUMP

AIR HEATER

BOG COMP.

UNLOADING/ VAPOR RETURN ARMS

SCV

FUEL GAS

FOR BACKUP

TYPICAL-LNG TERMINAL FLOW DIAGRAM

HW / GW EXCHANGER

CW / GW EXCHANGER

HVAC

STV-A/B

Extended LNG Chain

Container

Container

Petronet’s Initiatives to mitigate Demand Supply –GAP and to

encourage downstream industry in INDIA

DEVELOPMENT OF LNG SATELLITE TERMINAL

LNG Terminal

Small LNG vessels

LNG Satellite terminal

NG Power Plant

NG

NG

Industrial users

Residential users

LNG Trucks LNG Trains

PLL proposes to set up LCNG stations in India for supply of LNG & CNG as a fuel in vehicles.

PLL also proposes to operate a few LNG buses for company and public transportation as a pilot

WORKING ON DEVELOPMENT OF LCNG STATION

Such LCNG Station/Hub can also be used for piped natural gas in nearby area

LNG TRUCKS

Development of LNG TRANSPORTATION IN TRUCKS

VAPORISATION FACILITIES

Satellite Hub

DEVELOPMENT OF SATELLITE LNG HUB

WORKING ON DEVELOPMENT OF LNG TRANSPORTATION THROUGH SMALL SHIPS

WORKING ON DEVELOPMENT OF LNG TRANSPORTATION BY TRAIN

Train can also run on LNG (Example-CANADA)

WORKING ON DEVELOPMENT OF LNG TRANSPORTATION BY TRAIN

CONTD..

WORKING ON DEVELOPMENT OF LNG TRANSPORTATION BY AIRCRAFT

Recommendations

There exists very good potential for investment in LNG terminals in the Country fuelled by the wide gap in demand supply

Investment in the downstream infrastructure also provides good business potential

Conversion of existing liquid fuel user industries to natural gas offers good returns

Indian EPCC contractors can collaborate with the internationally renowned contractors to develop the LNG projects jointly and develop their capabilities locally

Thank You

www.petronetlng.com