Day2: Mr. Rk sinha dgh presentation ippai goa

The 14th Regulators & Policymakers Retreat1st – 4th August, 2013, Goa Marriott Resort & Spa, Goa

Gas Availability Scenario

Rajeev Kumar Sinha

Chief Technical Officer

The 14th Regulators & Policymakers Retreat 1st – 4th August, 2013, Goa Marriott Resort & Spa, Goa

Growth in Primary Energy Demand

Global Energy Demand increases by 1/3rd , India is a major contributor for the growth


Gas Consumption Growth – 2035 Major Contributor is Developing Economies

Demand for LNG almost doubling over the next decade.

Asian Gas Scenario - LNG Demand

India – Emerging LNG Market

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

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

9

13% p.a.

2025

53

35

20

37

15

25

2010

India

5645339

+13% p.a.

202520152010

China

India has Large Incremental Demand

Asian Gas Scenario

Natural gas currently ~11% of India’s energy mix; Expected to reach 20% by 2030

25%

20%51%

2%2%

2030Oil

Natural Gas

Coal

Nuclear

Hydro

Evolving Energy Mix – Increasing Share of Gas

12 bcm

58 bcm

26 bcm200 bcm

India Gas Market Scenario

Gap Between Demand and Domestic Supply

60

80 22-26

102-106

120-124

16-20

(BCM)64- 68GAP

(At current coal & fertilizer pricing. Will change as power and fertilizer policy reforms progress)

SOURCE: McKinsey, GAIL


Existing and Projected Re-gas Capacity

Source: MOPNG, GAIL

Existing Re-gas capacity : 14.8 MMTPA

Projected Re-gas capacity: 48.5 MMTPA



TypeResources

In Place Reserves

Conventional Oil & Gas206

Billions bbl

72 Billion bbl

(35%)

Unconventional

CBM 92 TCF 9 TCF (10%)

Gas HydrateUnder evaluation

(~1894 TCM)

Shale GasUnder evaluation

(1000’s TCF)

Oil ShaleUnder evaluation

(~ 3000 MMBBL)

INDIA’S HYDROCARBON RESOURCES


DEMAND-SUPPLY Projection


Total Discoveries : 180

On Production : 22

Under Development : 14

Commerciality Established : 25

Under Evaluation : 48

Other Stages : 71

Reserves accretion from new Discoveries (as on 01.04.12) :737 MMT (Considering Commercial Discoveries) (O+OEG)

Development of Discoveries

158

Open

Acreage

Licensing

Policy

•Crude Oil Pricing :

International price for Crude Oil

Actual Crude Oil price realization by NOCs under Nomination regime is less due to subsidy sharing

•Gas Pricing and Utilization :

APM/Non-APM Price for Gas produced by ONGC & OIL

Gas Pricing Formula is approved by GoI under PSC /CBM Contract regime

Allocation of Gas as per Gas Utilization Policy of Government

ALLOCATION AND PRICING

• Gas should be supplied in the following orders of priority :Gas –Based Urea Fertilizer Plants

LPG Plants

Power Plants supplying power to the Grid/State utilities at regulated rates under PPA

City Gas Distribution (CGD) Systems for Domestic and Transport Sectors

Steels/Refineries/Petrochemicals for feedstock purposes

CGD for Industrial and Commercial use

Any other customers for captive and merchant power, feedstock or fuel purposes

Guidelines introduced for selection of customers for domestic gas available from small/ isolated fields under NOCs

GAS UTILIZATION POLICY

Dr. Rangarajan Committee’s recommendations on pricing of domestically produced gas:

• Competitive domestic gas price currently does not exist in India

• The recommended domestic gas price in India will be arrived at by averaging the following:

- Henry Hub price in the US ( for North America)

- National Balancing Point price in UK ( for Europe)

- Netback price at the sources of supply for Japan

- Netback price of Indian LNG import at the wellhead of the exporting countries

The proposed formula to be applied prospectively across all sectors.

Proposed Contractual Reforms

IEA estimates that India would need a total investment of USD 2306 billion on overall energy supply infrastructure from 2011- 2035 ( avg USD 92 billion p.a.)

Investment OpportunitiesRequired energy investment, 2011-35 (USD billion)

Value through Partnerships

Day2: Mr. Rk sinha dgh presentation ippai goa

Business

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