2. GAS IN INDIA

3. Contents Overview of Energy Scenario E&P sector in India Indian Natural Gas Industry Demand and Supply Impact of price Infrastructure development Regulatory issues

4. Overview of Energy Scenario Energy mix – India and Global Natural Gas accounts for only 8% of current energy consumption against 24% global consumption

5. Overview of Energy Scenario Annual consumption, Barrels per person Country Population (Million)Per Capita Energy use U.S28560.0 Canada3169.0 Australia2042.2 Japan13028.4 Spain 40 25.8 Mexico10010.1 Brazil1757.6 China13006.6 India10502.4 Bangladesh1400.8 Per capita energy consumption in India is bound to increase many fold due to robust GDP growth Asymmetric Energy Use

6. Indian Natural Gas Industry Proved Gas reserves: India - 30.1 TCF, World- 5501.4 TCF Proved World Natural Gas reserves as on 1 Jan 2003

7. U.S Natural Gas Production, Consumption, and Imports,2025 (TCF) 15% 28% Net imports Consumption Production Overview of Energy Scenario

8. U.S. Natural Gas imports break up till 2025 - (TCF) HistoryProjections Canada Liquefied Natural Gas Mexico Source: Annual Energy Outlook 2005 Overview of Energy Scenario

9. Country20012010201520202025 India226590114143 China285474102142 Japan799199108119 South Korea2028374351 Other Asia139153173198230 Total288391473565685 (In BCM) Future Natural Gas requirement of Asian countries

10. Overview of Energy Scenario  Mining Projects under Implementation in India

11. SEDIMENTARY BASINS OF INDIA CAT. I (PROVEN COMMERCIAL PRODUCTIVITY) CAT. II (IDENTIFIED PROSPECTIVITY) CAT. III (PROSPECTIVE BASINS) CAT. IV (POTENTIALLY PROSPECTIVE) DEEP WATER AREAS WITHIN EEZ PRE-CAMBRIAN BASEMENT / TECTONISED SEDIMENTS E&P sector in India

12. SEDIMENTARY AREA Shallow Offshore 0.40 MM.Km 2 Onland 1.39 MM.Km 2 Deep Water 1.35 MM.Km 2 Total Sedimentary Area 3.14 MM.Km 2 Total Area Under License 0.99 MM.Km 2. Shallow Offshore 0.270 MM.Km 2 Onland 0.213 MM.Km 2 Deep Water 0.514 MM.Km 2 DistributionUnder Exploration E&P sector in India

13. OIL & GAS PRODUCTION IN JV AND PRIVATE SECTOR In MMT/BCM JV/Pvt. Share almost 13% of Oil & 21% Gas of National production Year E&P sector in India

14. OIL & GAS PRODUCTION IN INDIA - 2004 E&P sector in India

15. EXPECTED Vs ACTUAL INVESTMENTS In MMUS$ Committed Actual E&P sector in India

16. Oil Gas K m 0400200 KANAKDURGA PADMAVATI ANNAPURNA DHIRUBHAI – 1, 2, 3, 4, 5, 6, 7, 8, 16 BHEEMA, NS Delhi Mumbai Chennai Kolkata D-5 D-6 Rajasthan Basin CB-OS/2 RJ-ON-90/1 KG-DWN-98/3 KG-DWN-98/2 BAY OF BENGAL TOTAL - 34 LAKSHMI PRE-NELP15 ANNAPURNA NELP19 I N D I A DHIRUBHAI – 9, 10, 11 & 15 CB-ONN-2000/1 CB-ONN-2000/2 PK-2 SARASWATI RAAGESHWARI GR-F KAMESHWARI MANGALA, AISHWARIYA SHAKTI, BHAGYAM, VIJAYA, VANDANA LAKSHMI AMBE GAURI PARVATI CBX-1 E&P sector in India NEW SIGNIFICANT DISCOVERIES

17. 26 sedimentary basins  Total area of 3.2mm sq. km  Only 18% moderate-to-well explored Current proved reserves  5.6bn bbl of oil (R/P ratio: 19.3)  30.1 tcf of gas (R/P ratio: 28.3) Concerns of limited discoveries in the past, offset by  Limited drilling in offshore areas, believed to be more prolific  Reliance gas discovery, estimated up to 7 tcf  Cairn ’ s discovery in Rajasthan with oil reserves in excess of 1500 MMBOE 1 2003 Proved reserves as per BP Statistical Review, 2004 5 E&P sector in India To Summarize..

18. Indian Natural Gas Industry Paradigm shift - clean energy and reducing emissions Primary energy demand in India expected to grow strongly with robust GDP growth coupled with rising per capita income Infrastructure development Positive outlook to use gas Demand for natural gas driven by the power and fertilizer sectors Power and fertilizer account for 37% and 35% of natural gas demand respectively Power sector projected to witness high growth to achieve Govt. plans Natural gas has an important role to play in India’s energy needs

19. Indian Natural Gas Industry Increase in share of Gas 2003 2025 Natural Gas accounts for 8% of current energy consumption which is expected to grow to 20% by 2025 Natural Gas allocation to consumers is more than current level of Production

20. Ever Expanding Market… Year Demand and Supply - Natural Gas (MMSCFD)

21. Indian Natural Gas Industry Fertiliser Replacing naphtha/FO Existing gas based plants Maximum volume tied up by Fertilizer units Power Competitive with coal at certain locations Peaking capacities Excellent response in use of LNG Sectorial consumption of Natural gas in India

22. Demand and Supply LNG TerminalCapacity (MMTPA) Dahej5 Dahej Exp5 Kochi2.5 Shell Hazira2.5 Dabhol2.5 Mangalore5 Kakinada2.5 Total25 Bridging the gap - Import of LNG (MMTPA)

23. Demand and Supply Bridging the gap - Increase in indigenous production

24. Demand and Supply Bridging the gap - Cross border natural gas pipelines  Iran-Pakistan-India  Myanmar-Bangladesh-India

25. Impact of price Cost built up of Natural gas in U.S

26. Impact of price Cost built up of Natural gas in U.S

27. 19952025 HistoryProjections Source: Annual Energy Outlook 2005 Reference case $4.79 Rapid technology $4.35 Slow technology $5.18 Expected Natural Gas Wellhead Prices in U.S by 2025 ($ per MSCF) Impact of price INDIA - APM; 1.85 $/MSCF, JV: 3.1 – 4.2 $/MSCF

28. Impact of price World wide Natural Gas Prices ($ per MSCF)

29. Impact of price Higher price of natural gas may trigger fuel switching by consumers

30. Infrastructure development A substantial boost in supplies from production or imports will take time and will require additional infrastructure Establishment of a national Gas Transmission system Moving gas from newly emerging supply centres to demand centres Addition of LNG infrastructure Bringing in Gas Distribution and Marketing system

31. Delhi Mumbai Chennai Andaman - Nicobar A 1 BLOCK, MYANMAR EXISTING PROPOSED National Gas Grid National Gas Grid GAIL Kolkata Product Pipelines in India PRODUCT PIPELINE Infrastructure development

32. Types of Underground Natural Gas storage Facilities

33. Infrastructure development U.S & Canada Distribution of Storage Facilities and Working Gas Capacity

34. Infrastructure development U.S & Canada Projected Storage Capacity Additions and Costs

35. Regulatory issues Regulation in the Indian Natural Gas sector is in a state of transition Natural gas industry in India is evolving : Moving from a centralised, Govt controlled business to a more market responsive, market driven environment DGH is the effective regulatory body for the upstream hydrocarbon sector in India Determination of Wellhead price for the purpose of payment of royalty is under discussion Policy of taking Profit gas in cash or kind by Government is under consideration Implementation of Open Acreage Licensing policy to intensify the Exploration in India

36. Regulatory issues Transparent regulatory framework is desired to ensure that sectoral targets for growth are met Achieve Government's long-term plans for development of gas sector, including establishment of National Gas Grid Promoting investment in the development of gas infrastructure (pipelines, storage facilities) Promoting competition among entities, ensuring reasonable tariffs and protecting interests of consumers Promoting optimal utilization of resources invested in the sector and ensuring safe operations

37. Regulatory issues Natural Gas Pipeline Policy is in the draft stage which aims to develop pipeline infrastructure and standards for interconnectivity  Common Carriage  Standards for interconnectivity  Capacity for transmission pipelines  Regulation of Tariffs Petroleum and Natural Gas Regulatory Board Bill 2004 is also in the draft stage

38. Thank you