1. F200602024 India’s Energy Challenge June 28 & 29, 2006, Hilton Americas, Houston Panel Session 3B LNG/GTL Amos Avidan

2. F200602024 Natural Gas - LNG/GTL Running out of natural gas? –Global supply and demand –India gas market –Sustainable development The Boom in LNG Construction –How long will it Last? –Cost, Schedule, Quality and Certainty of Outcome Will GTL follow LNG?

3. F200602024 World primary energy consumption BP Statistical Survey 2005 Oil Natural Gas Nuclear hydroCoal More of the Same…

4. F200602024 Reserves/Production ratios are steady - The role of technology Natural GasOIL BP Statistical Survey 2005 year R/P years Consumption, m bbl/dConsumption, bcf/d 80 63 140 259

5. F200602024 Natural Gas in India Consumption up 12% to 1.3 Tcf in 2005 –Production from Mumbai High –Reliance discovery of KG in 2002 LNG and pipelines needed to support high growth: –HBJ pipeline capacity and others –LNG terminals at Dahej, Hazira, Dahbol, others –Dahej price is fixed till 2008 ($4.87) –High spot prices curtail shipments to Hazira Import gas pipelines?

6. F200602024 Global Warming Concerns Global climate is complex but there is scientific consensus that human activity is causing global warming – CO 2 increased from 280 to 370 ppm in the past 200 years It’s hard to balance economic growth with CO 2 reduction – new technologies can help Major CO 2 emitters are not bound by Kyoto, but some form of CO 2 controls will likely happen

7. F200602024 The Future 1.Ecological disaster? 2.The Fun Future – techno fix? 3.The Ecotopian Solution? The Future According to Robert Crumb, 1998

8. F200602024 Liquefied Natural Gas High LNG demand to continue –Ample and cost-effective, but remote gas reserves

9. F200602024 0 100 200 300 400 500 600 700 65-7070-7575-8080-8585-9090-95 06-10 95-00 01-05 $US / ton per annum of capacity But LNG Construction Costs are Increasing Range of recent proposals and bids

10. F200602024 Why the increase? High cost escalation in the past 3 years More complex plants in difficult locations Execution problems on some projects Several projects being delayed or questioned

11. F200602024 Cost Escalation Record high prices for commodities, volatility Higher shop loads lead to: –Quality concerns –Higher contingencies –Shorter validity periods Typical Price increases from 2003 to 2006 Compressors:35%Line pipe: 70% Pumps:55%Switchgear: 20% Exchangers:42%Structural steel: 52% Columns 52%

12. F200602024 Shop Loads and Lead Times Early commitment needed Typical Lead times, weeks: 20042005 Air coolers 37 53 Motors 22 45 Columns 38 45 Vessels 40 53 Reactors 38 70 Pumps 25 33

13. F200602024 People Issues Facing the E&C Industry Aging workforce Retaining talent High recruitment Salaries are rising Training is more critical Globalization

14. F200602024 FeasibilityFEEDEPC  Benefits to the owner:  Market advantage  Lock up scarce EPC resources  Highest NPV  Competitive EPC cost  Certainty of Outcome A Negotiated EPC Model  Shorter schedule  Open-book FEED  LSTK or cost plus EPC  Experienced team

15. F200602024 Jamnagar Project Example Phase I: 450 TBPD, Integrated Refinery and Petrochemical plant Over $4 Billion 44 Process Units Bechtel Involvement from Project Conception through Operation Less than 4 Years to “Oil in” Reliance Industries Limited

16. F200602024 What About GTL? Gas-To-Liquids can produce quality fuels, but at a high cost 2006 – Startup of Oryx GTL in Qatar (34 TBD at a cost of over $30,000/bbl) Cost of the proposed 140 TBD Pearl GTL project in Qatar could be over $50,000/bbl Proposed niche GTL projects: –Qatar (resource driven) –Nigeria, Algeria, Russia – stop flaring, enable oil production

17. F200602024 Thank You