THE ENERGY CHALLENGE

TOTAL COMMERCIAL ENERGY REQUIREMENTS

YEAR TOTAL PRIMARY ENERGY (MMTOE)

7% GDP 8% GDP

2006-07 385 394

2011-12 505 537

2016-17 653 718

2026 - 27 1060 1248

2031-32 1333 1620

- FOUR FOLD GROWTH

DRAFT REPORT - INTEGRATED ENERGY POLICY PLANNING COMMISSION

THE ENERGY CHALLENGE

ELECTRICITY REQUIREMENTS

YEAR INSTALLED CAPACITY - MW

7% GDP 8% GDP

2003-04 131424 131424

2006-07 149806 152610

2011-12 206757 219992

2016-17 276143 305623

2021-22 368592 424744

2026 - 27 480694 574748

2031-32 627088 778095

- FIVE TO SIX FOLD INCREASE

DRAFT REPORT - INTEGRATED ENERGY POLICY PLANNING COMMISSION

THE ENERGY CHALLENGE

REQUIREMENT OF COAL AND GAS – POWER SECTOR

YEAR COAL (MMT) GAS (MMTOE) GAS (MMSCMD)

7% 8% 7% 8% 7% 8%

2003-04 318 318 13 13 39 39

2011-12 366 375 17 18 51 54

2016-17 455 493 36 41 108 124

2021-22 678 814 48 58 145 175

2026-27 885 1133 69 89 208 268

2031-32 1096 1478 100 134 301 404

NON POWER GAS DEMAND = 227 MMSCMD TO 274 MMSCMD

GAS DEMAND OVER NEXT 25 YEARS = 528 MMSCMD TO 678 MMSCMD

0

5

10

15

20

25

30

35

72/7

3

74/7

5

76/7

7

78/7

9

80/8

1

82/8

3

84/8

5

86/8

7

88/8

9

90/9

1

92/9

3

94/9

5

96/9

7

98/9

9

00/0

1

02/0

3

04/0

5

Years

BCM

BOMBAY HIGH

SOUTH BASSEIN

ACCELERATED DEVELOPMENT

OFFSHORE

LNG IMPORTSMAR -- 04

INDIAN GAS SECTOR – MAJOR MILESTONES

KG FINDS

MYANMAR FIND

INDIAN GAS MARKET OVERVIEW

DOMESTIC SUPPLIES - 74 MMSCMD

IMPORTS (LNG) - 18 MMSCMD

DEMAND POTENTIAL - 150 MMSCMD

MAJOR PLAYERS

E&P -

- ONGC, OIL, RELIANCE, BRITISH GAS, CAIRN, NIKO, GSPC

LNG -

- PETRONET LNG LTD (JV OF PSU,s, GDF, ADB)

- SHELL HAZIRA LNG LTD (SHELL, TOTALFINA-ELF)

- RATNAGIRI PROJECT

GAS TRANSMISSION & MARKETING - GAIL (INDIA) LTD

REGIONAL / RETAIL - MGL, IGL, GCC, GSPC, AGC, TNGCL, PLAYERS BGL, GSPL, GGL & OTHERS

92 MMSCMD

GAS END USE PATTERN

42%

31%

4%

13%

10%

POWER FERTILIZER SPONGE IRONOTHERS I.C./SHRINKAGE

CONSUMPTION - 92 MMSCMD

TYPICAL PIPELINE SYSTEMS

MAIN TRANSMISSION SYSTEM

REGIONAL

TRANSMISSION SYSTEM

DISTRIBUTION SYSTEM

Typical Pressure Range (Bar)

40 to 70 15 to 40 10 to 0.025

Diameter 24” to 48” Up to 22” Down to 2”

Material of construction

Steel Steel Steel or HDPE Pipe

Others Supply to regional system or large customer

Supply to medium scale consumers & feed to distribution systems

Supply to small consumers & residential users

CROSS BORDER – GAS PIPELINES

MYANMAR- INDIAGAS PIPELINE

LENGTH: 1500 KM

DIAMETER: 36”

• NO CROSS BORDER AND POLITICAL ISSUES WITH

BANGLADESH GOVERNMENT.

ACCESS TO POTENTIAL CUSTOMERS IN NORTH-EAST INDIA,

NORTH - BENGAL AND BIHAR

OPPORTUNITY OF CONNECTING TRIPURA AND OTHER NE

GAS FIELDS.

LONGEST AMONG ON-LAND PIPELINE OPTIONS.

HILLY TERRAIN.

ON-SHORE PIPELINE : MYANMAR – NE - INDIA

A. Offshore Pipelines

- Shallow water (200~250 m)

- Deep water (1560 m)

- Deep water (2210 m)

B. Onshore Pipelines

- Via Chittagaon - Cox’s Bazaar (Bangladesh)

- Via Tripura (India) - Dhaka (Bangladesh)

- Through North-East Indian territory

C. LNG Marine Route

D. CNG Marine Route

Within EEZ of Bangladesh

Outside EEZ of Bangladesh

OPTIONS OF GAS EVACUATION FROM MYANMAR TO INDIA – 8 NOS.

BLOCK A-1

SITTWE LANDFALL POINT MYANMAR

MYAYNGU KYAN

PARADIP

HALDIA

ALT-I( VIA CHATTGAON/ COX’S BAZAR)

ALT-II VIA TRIPURA

OFF-SHORE SHALLOW WATER

OFF-SHORE DEEP WATER (WITHIN EEZ)

OFF-SHORE DEEP WATER (OUTSIDE EEZ)

ONSHORE ROUTE VIA. BANGLADESH

ONSHORE VIA. N E INDIA

LNG OPTION

CNG OPTION

PROPOSED JAGDISHPUR- HALDIA PIPELINE

Gaya

Jagdishpur

MYANMAR- INDIA GAS PIPELINE

OPTIONS OF GAS EVACUATION FROM MYANMAR TO INDIA

Iran – Pakistan- IndiaGas Pipeline

INDICATIVE IRAN-PAKISTAN- INDIA PIPELINE ROUTE

N

AC-1

JAISALMER

BHONG

ASSALUYAH

Assaluyah – Pakistan Border 1100 KMsPakistan Border – AC1 750 KMsAC1 – India Border 250 KMs

Total Distance 2100KMS

Indicative Pipeline Route

Gas Demand for India: 60-90 MMSCMD Gas Demand for Pakistan:30-60MMSCMD Pipeline size: 56” Pipeline Length: 2100 KMS Capital Cost: Approx.Rs. 29000 Crores. O&M Cost: 2% of Capital Cost Transit Fee: to be decided as per the

Energy Charter Treaty (ECT)

SALIENT FEATURES

CROSS BORDER GAS PIPELINES

TURKMENISTAN - AFGHANISTAN- PAKISTAN GAS PIPELINE

PROPOSED ROUTE OF TAP PIPELINE

SALIENT FEATURES

GAS SUPPLY : 90 MMSCMD

PIPELINE SIZE: 56”

PIPELINE LENGTH: 1700 KMS

CAPITAL COST: APPROX. $ 3.3 bn

TRANSIT FEE: AS PER INTERNATIONAL NORMS

Exploration Status

Poorly Explored

Initiated

Unexplored

Well Explored

• Only 18% of the total 3.14 million sq. km. has

been extensively explored

• < 25% of total prognosticated resources

established

• Reserves estimated only in 15 of the 26 basins

• Low Drilling Density

Exploration Status

• The exploration and production activities were carried out in various sedimentary blocks in India by NOCs on nomination basis till formulation NELP and ML policies

• After formulation of NELP and ML policies the blocks of sedimentary basins were awarded for Exploration and production activities to NOCs as well as Private Oil Companies on competitive bidding.

DelhiDelhi

MumbaiMumbai

ChennaiChennai

An

dam

an- N

icob

ar

Kolkata

Phase-I (93 Blocks)Phase-II (21 Blocks)

Development Phase (4 Blocks)

Wells Drilled (17 Blocks)

Status of

Exploration

NELP - 90 Blocks

Pre-NELP - 28 Blocks

Total 118 Blocks

4

21

93

Dev. Phase

Phase-I

Phase-II

History of Gas Pricing in India• Gas a nuisance during production of Oil in early years difficult to get value for it. In 1960’s sold for a few rupees per MCM.

• In1970’s demand for gas grew in Assam and Gujarat, prices rose. Gas used for applications including as city gas.

• ONGC to get revenue from gas priced it on thermal equivalence of alternate fuel. In one factory two different prices for gas based upon the end use.

• Consumer resistance & disputes were settled only after two decades.

• In 1987 uniform price for all consumers with special concession only for the North East region.

• In 1991 Kelkar committee report & recommendations on gas pricing.

Existing APM Gas Pricing• Kelkar Committee (1991) parity with imported fuel oil, but price fixed on a yearly incremental basis.

• Shankar Committee (1997) basic price of NG to basket of imported fuel oils at 55% in first year 65 % in second year and 75% in third year.

• Gas prices were to reach 100 per cent parity with fuel oil by 2001-02 after which linked to the market, this has not happened.

• Defined fuel oil basket now extremely high. • APM Price eventually revised in 2005 to Rs.

3200/MCM(approx. $2.10 per mmbtu)

Present Prices of Non-APM GasProducing field Quantity Price (in $/mmbtu)

(in mmscmd) Floor CeilingPanna, Mukta & Tapti 5 4.08

6 3.86Ravva PSC 2.96 1.75 3.00

Ravva Satellite 1 2.30 3.30Lakshmi Contract I 3.06 4.46

Contract II 3.68GSPCL 3.76Regassified LNG at Dahej 3.45(Before sales tax)

CNG Pricing

• Maharashtra– Mumbai Rs 20.90 per kg – Mira-Bhayandar Rs 21 per kg– Thane Rs 21.30 per kg

• National Capital Region– Delhi Rs 18 per kg

• Gujarat– Ahmedabad Rs 25.53 per Kg– Baroda Rs 20.92 per Kg– Bharuch– Ankaleshwar– Surat Rs 22.55 per Kg

Some Comments

• Myanmar had offered well-head gas at $2.52/mmbtu– Excluding processing and transportation costs

• India wanted Iran gas landed at $2/mmbtu– All put together, the cost of gas at the Indian border is

expected to be above $5 per mmbtu as Iran wants LNG price for pipeline gas also

• NTPC now willing to buy gas at a premium– as against the current APM gas price of $ 2.1 per

mmbtu which is in short supply

Demand Assessment -Natural Gas

MMSCMD

2007 2010 2012

Power Sector 75 95 110

Fertilizer Sector 50 60 60

Industrial Sector 20 25 30

City Gas Distribution 10 15 15

Total 155 195 215

Demand-Supply Balance

60 60 60

2003-04

2010-11

120mmscmd

75

mmscmd

215mmscmd

180mmscmd Unmet Demand:

35 mmscmd

Unmet Demand:45 mmscmd

Demand Supply existingsources

Supply newdomestic finds

LNG

Window of opportunity of approx 40

mmscmd