Emergence of Natural Gas in India

Gail(India)Limited 16,bhikaji camaplace R.K. Puram,NE !EL"I

Industry mentor Lokesh Gairola Chief Manager(Marketing) GAIL

Submitted byAshish Tahiliani Amity Uni ersity !oida

Project Report Approval Sheet

This is to "ertified that the #ro$e"t entitled% & 'mergen"e of !atural Gas in India( )as "om#leted by Mr*Ashish Tahiliani under my guidan"e during the #eriod )*e*f +,th May -../ to +,th 0uly -../* The same is hereby a##ro ed*

Lokesh Gairola Chief anager ! arketing" #$% &hikaji cama place R'k'Puram% Ne( )elhi

AC*N+,LE)GE ENI e1#ress my sin"ere gratitude to my industry guide Mr* L23'S4 GAI52LA% Chief Manager (marketing)% GAIL% for his able guidan"e% "ontinuous su##ort and "oo#eration throughout my #ro$e"t% )ithout )hi"h the #resent )ork )ould not ha e been #ossible* I )ould also like to thank the entire team of GAIL% for the "onstant su##ort and hel# in the su""essful "om#letion of my #ro$e"t* Also% I am thankful to my fa"ulty guide Mr* 6I6'3 3UMA5 of my institute% for his "ontinued guidan"e and in aluable en"ouragement*

Ashish Tahiliani

A&stract
Gas o""u#ies about /7 of the total energy basket of the "ountry* 4o)e er% the s"enario is fast "hanging in the "ountry% largely be"ause of the e1#e"ted in"rease in the a ailability of natural gas in the "ountry* 8resently% fertili9ers and #o)er se"tors "ontinue to be the ma$or "onsumers of natural gas at ,,7 and :;7 res#e"ti ely* 8M2 has dire"ted that the fertili9ers se"tor should get the highest #riority in allo"ation of natural gas* It has also been dire"ted that the #o)er se"tor should be en"ouraged to rely more on natural gas for ne) "a#a"ities* At #resent% there is an a"ute shortage of natural gas in the "ountry* As against the "urrent estimated demand of about +<. MMSCM=% the a ailability is around +-. MMSCM=* 8resently gas su##ly is being made from the domesti" fields of 2!GC% 2IL% 8ri ate 06 o#erators and from the im#ort of L!G* Go ernment of India has ado#ted a multi-#ronged strategy to augment gas su##lies and bridge the ga# bet)een su##ly and demand for the domesti" market these "o er>+* -* ,* :* Intensifi"ation of domesti" '?8 a"ti ities* '1#loitation of un"on entional sour"es like Coal @ed Methane(C@M) Underground "oal gasifi"ation Im#lementation of !atural Gas 4ydrates 8rogramme (!G48) for e aluation of hydrate resour"es and their #ossible "ommer"ial e1#loitation ;* L!G Im#orts A* Gas sour"ing through transnational gas #i#elines* )emand.Suppl/ Gap for Natural Gas The ga# in demand and su##ly of natural gas% under normal s"enario% for a year as a #er"entage of total su##ly ranges from A:7 to +;<7 of total su##ly for that year refle"ting the s"o#e of im#orts in the "ountry* The shortfall of domesti" su##lies )ill #rimarily be met )ith L!G im#orts* The total L!G im#orts in the "ountry are #ro$e"ted to in"rease from ,.*:; mms"md in -..B to <,*+- mms"md in -.+-* The im#ort of L!G as #er"entage of total demand in the "ountry ranges from +B7 in -..< to around ,.7 in -.+-* Thus des#ite im#orts of L!G India )ill still fa"e short su##ly of gas to meet its demand* The in"reased a ailability of natural gas )ill ha e a #ositi e im#a"t on the e"onomi" gro)th of the "ountry* !atural gas is a relati ely "lean fuel and has ad antages o er other fuels* Additionally a ailability of this resour"e should be used in a $udi"ious manner* The ne"essary infrastru"ture for trans#ortation of gas from #rodu"tion "enters to different "onsum#tion "enters is also being #ut in #la"e by different agen"ies* There is a need to "losely monitor the firming u# of demand estimates by arious se"tors so that the a ailable gas is used as #er the #rodu"tion #lan in a timely manner*

-a&le of content
Cha#ter + , : ; A B Content Abstra"t About the "om#any 0oint entures and Subsidiaries Cuture #lans of Gail )*r*t !atural Gas 5eforms of !atural Gas Industry 2b$e"ti e of the #ro$e"t Introdu"tion of the #ro$e"t IndiaDs energy mi1 Introdu"tion of !atural gas 'n ironmental s"anning of natural gas se"tor !atural gas outlook 5esear"h Methodology =ata analysis and Inter#retation Cindings 5e"ommendation and "on"lusion S"o#e of Curther study Anne1ure Euestionnaire 8ersonal inter ie) Con ersion table 8ro$e"tions by different agen"ies 5eferen"e 8age no*

<

A0+1- -2E C+ PAN3

GAIL (India) Ltd*is one of the outstanding #ubli" enter#rises in the "ountry today* It is one of the &!A65AT!A '!T'585IS'S( and ranks among the to# fi e "om#anies in India* It is IndiaDs flagshi# natural gas "om#any% integrated all as#e"ts of the natural gas alue "hain (in"luding '1#loration and 8rodu"tion% 8ro"essing% Transmission% =istribution and Marketing) and its related ser i"es* In a ra#idly "hanging s"enario% GAIL (India) is s#earheading the mo e to a ne) era of "lean fuel industriali9ation% "reating a Fuadrilateral of green energy "orridors that "onne"t ma$or "onsum#tion "enters in India )ith ma$or gas fields% L!G terminals and other "ross border gas sour"ing #oints* GAIL is Also e1#anding its business ton be"ome a #layer in International market GAIL has "om#leted nearly t)o and half de"ades of a e entful $ourney* Starting )ith a natural gas transmission "om#any% it is today an integrated energy "om#any along the natural gas alue "hain )ith global foot#rints* ha ing started as a gas transmission "om#any during the late eighties% it gre) organi"ally o er the years by building a large net)ork of natural gas trunk #i#elines "o ering a length of around B... 3m* Today % Gail has interests in the business of natural gas% L8G% liFuid hydro"arbons and #etro"hemi"als% the latter being alue added #rodu"ts* The "om#any has also entered in tele"om se"tor by leasing band)idth a ailable through the 2CC )hi"h is laid along the gas #i#elines for their o#erations and maintenan"e* GAIL has also di ersified into e1#loration and #rodu"tion% "ity gas distribution and is steadily de elo#ing an o erseas #resen"e et"*GAIL is one of the leading #ubli" enter#rises )ith a "onsistently e1"ellent finan"ial tra"k re"ord* Turno er during the last ten years has sho)n a "om#ounded annual gro)th rate of +, #er"ent* The "om#any re"orded a turno er of rs*+<.*.< billion and a #rofit after ta1 of 5s*-A*.+ billion in CG -..B-.<*The Com#any has also re"ei ed authori9ation from the Ministry of 8etroleum and !atural gas to lay ; ne) #i#elines and in addition% augmentation of , e1isting #i#elines is also being taken u#* This )ill lead to doubling of #i#elines length and transmission "a#a"ity in the ne1t : to ; years 4ISI+N- @e a leading "om#any in natural gas and beyond% )ith global fo"us% "ommitted to "ustomer "are% alue "reation for all stakeholders and en ironmental res#onsibility* ISSI+N. A""elerating and o#timi9ing the effe"ti e and e"onomi" use of natural gas and its fra"tions to the benefit of national e"onomy*

A5+R 01SINESS SEG EN-S

!atural gas 8etro"hemi"als '1#loration and #rodu"tion L8G and other LiFuid hydro"arbons Tele"ommuni"ation

2IS-+R3 +6 -2E +RGANISA-I+N GAIL (India)Ltd*(erst)hile Gas Authority of India Ltd)%IndiaDs #rin"i#al gas transmission and marketing "om#any% )as set u# by the Go ernment 2f India in August +/<: to "reate gas se"tor infrastru"ture for sustained de elo#ment of the natural gas se"tor in the "ountry* The -<.. 3ms 4a9ira-6i$ai#ur (460) #i#eline be"ame o#erational in +//+*=uring +//++//,% three L8G #lants )ere "onstru"ted and some regional #i#elines a"Fuired% enabling GAIL to begin its regional gas distribution in arious #arts of India* GAIL began its "ity gas distribution in =elhi in +//B by setting u# nine C!G stations% "atering to the "ityDs ast #ubli" trans#ort fleet* In +///% GAIL set u# northern IndiaDs only #etro"hemi"al #lant in 8ata* GAIL be"ame the first infrastru"tural #ro ider "ategory II Li"ensee and signed the "ountryDs first ser i"e le el agreement for leasing band)idth in the =elhi-6i$ai#ur in -..+%through its tele"om business GAILT'L*In -..+%GAIL "ommissioned )orlds longest and India first "ross "ountry L8G Transmission 8i#eline from 0amnagar to Loni

GAIL today has rea"hed ne) milestone )ith its strategi" di ersifi"ation into 8etro"hemi"als% Tele"om and LiFuid hydro"arbons besides gas infrastru"ture* The "om#any has also e1tended its #resen"e in 8o)er% LiFuefied !atural Gas re-gasifi"ation% "ity gas distribution and e1#loration ? 8rodu"tion through eFuity and $oint entures #arti"i#ations* In"or#orating the ne) found energy into its "or#orate identity% Gas Authority of India )as renamed GAIL (India) Limited on !o ember --% -..-*

GR+,-2 +//.-/+ -<..3ms 4a9ira-6i$ai#ur 0agdish#ur (460) #i#eline be"omes o#erational in +//+* L8G #hase-I #lant at 6i$ai#ur "ommissioned in Cebruary +//+*

+//+-/ 8hase-- at L8G 6i$ai#ur #lant "ommissioned in Ceb +//-*

+//--/, L8G #ro$e"t at 6aghodia "ommissioned in Ceb +.., +//:-/; 0oint enture Agreement signed )ith @ritish Gas on =e"ember A% +//:*Mahanagar Gas Limited In"or#orated to im#lement @ombay City Gas =istribution #ro$e"t*

+//B-/< Go ernment of India grants !a ratna status to Gail% herby entrusting greater autonomy to Gail after restru"turing of the @oard*

 Gas #ro"essing units (G8U)% offsite utilities of the #etro"hemi"al #lant at 8ata% "ommissioned*

+///-.. GAIL #arti"i#ates in !'L8 bidding by submitting offer for B blo"ks in asso"iation )ith 2!GC ? I2C and 5ussian "om#any Ga9#rom*Go ernment of India a##ro ed a)ard of - blo"ks to GAIL% 2ne )ith 2!GC in 2rissa offshore and another )ith Ga9#rom in @engal 2ffshore* L8G #lant at 8ata )ith a designed "a#a"ity of -*;< la"s T8A of L8G "ommissioned for "ommer"ial #rodu"tion in Mar"h -...*

-...-.+ GAIL "on"e#tuali9es a !ational Gas Grid to "onne"t the su##ly and demand "entres in the "ountry )ith high #ressure "ross "ountry #i#elines net)orks* The gas #ro"essing "om#le1% Gandhar begins #rodu"tion in Mar"h -..+*The #ro"ess L8G% .*:, La"s MT of 8entane and S@8 sol ent* 0amnagar-Loni L8G 8i#eline #ro$e"t% the )orlds longest and IndiaDs first "ross "ountry L8G +-/A 3m long #i#eline% )hi"h #asses through Gu$rat%5a$asthan%4aryana and =elhi is "om#leted* The "a#a"ity of the #i#elines in its first #hase is +*B million T8A% to be u#graded to -*; million T8A in the se"ond #hase*

-..+-. GAIL #i"ks u# +-7 eFuity in GS'GDs +;A MH #o)er #ro$e"t in Gu$arat as a strategi" in estment* Marketing fun"tions is restru"tured and de"entrali9e at 9onal le els* GAILT'L #hase-I "ommissioned% "reating an 2CC based =H=M net)ork "onne"ting =elhi-Mumbai% =elhi-0ai#ur% =elhi-Ahmmdabad% =elhi-6i$ai#ur% Meerat-Agra* -..,-.:

 GAIL has an initial su""ess in the form of signifi"ant gas find in the blo"k A-+ in Myanmar and dis"o ery of oil and gas in the Cambay blo"k* GAIL su""essfully se"ures #arti"i#ation in - retail gas "om#anies in 'gy#t% Cayum Gas Com#any and Shell C!G* 8latts de"lares GAIL as the first among Global Gas Utilities based on return on in estment "a#ital (52IC) in its )orld)ide sur ey of To# -;. energy "om#anies in -..:* 6i9ag I Se"undrabad L8G #i#eline* the ;<. km #i#eline )ith the ma1imum through#ut of +*+A MM8T8A "om#leted in 0une -.., @hagyanagar Gas Limited% a $oint enture of GAIL and 48CL% in"or#orated in August -..,%in the field of distribution and marketing of auto L8G%C!G for ehi"les and retailing of natural gas in the "ities of Andhra 8radesh* 8hase I and II of <... km net)ork GAILT'L #ro$e"ts "onne"ting =elhi% Mumbai and B+ other "ities% "om#leted* This net)ork #ro ides a national "ommuni"ation ba"kbone*

-..:-.; In"or#oration of GAIL Global Singa#ore 86T*LT= A"Fuisition of +; 7 eFuity stake in !atural Gas% 'gy#t* Agreement signed for a"Fuisition of / 7 eFuity stake in China Gas 4olding LT=% a $oint enture for "ity gas #ro$e"ts in :- "ities of China* Tri#ura !atural gas Co*Ltd% a $oint in"or#orated enture for "ity gas #ro$e"t in Tri#ura%

U8 "entral gas Ltd% a $oint enture for "ity gas #ro$e"t )ith @8CL in 3an#ur% in"or#orated =e-bottlene"king of LL=8' s)ing unit from +;.... MT to -+.... MT at GAIL 8ata*

 Gas management system "ommissioned for 460% =68L and SG8L* Commissioning of South Gu$arat #i#eline net)ork* Commissioning of 6i9ag-Se"undrabad L8G #i#eline*

-..;-.A GAIL% ile1 Australia% 6ideo"on% 48CL and @8CL "onsortium a)arded @lo"ks no ;A in 2man*

GAIL )as ranked ++th among to# +; of the )orlds largest listed gas utilities firms in the oil and gas industry %in terms of market "a#itali9ation %for the year -..;* GAIL gets Golden I"on a)ard for e-go ernan"e Inauguration of the !ational gas management "entre (!GMC) of GAIL at !2I=A* GAIL bagged t)o a)ards for e1"ellen"e in "ost management from the Institute of Cost and Horks A""ounts of India (ICHAI)* -..A-.B Me"hani"al "om#letion of ne) 4=8' (4igh =ensity 8olyethylene) #lant )ith a "a#a"ity of +..%... T8A at 8etro"hemi"al "om#le1 at 8ATA* Commissioning of =aha$-8an el #i#eline @rahma#utra "ra"ker and #olymer Limited-0oint enture "om#any led by GAIL% formed for im#lementing Assam gas "ra"ker #ro$e"ts GAIL a"Fuires stake in AB Myanmar blo"k GAILDs 6i$ai#ur- 3ota #i#eline "ommissioned GAILDs 3ailaras- Malan#ur #i#eline "ommissioned GAILDs "onsortium )ins , C@M blo"ks in Jrd round of bidding GAIL 48CL $oint enture-A antika gas limited in"or#orated GAIL 2!GC ink gas su##ly agreement

 GAIL brings IndiaDs first s#ot L!G "argo at =ahe$

GAIL -+)A3

GAIL (India) Limited% is IndiaDs flagshi# natural gas "om#any% integrating all as#e"ts of the natural gas alue "hain (in"luding '1#loration and 8rodu"tion% 8ro"essing% Transmission% =istribution and Marketing) and its related ser i"es* Gas transmission and distribution forms the bulk of GAILDs business today follo)ed by gas #ro"essing for L8G #rodu"tion and #rodu"tion of #etro"hemi"als* )I4ERSI6ICA-I+N

Today GAIL has e1#anded into Gas #ro"essing% 8etro"hemi"als% LiFuefied 8etroleum Gas Transmission and Tele"ommuni"ations* The "om#any has also e1tended its #resen"e in #o)er% LiFuefied natural gas re-gasifi"ation% "ity gas distribution and e1#loration and #rodu"tion through eFuity and $oint entures #arti"i#ations* GAIL (India) Ltd has the largest high #ressure #i#eline in India*

2IG2LIG2-S !788$.7889" Constru"tion of A.. 3ms of #i#eline '1#anding its #etro"hemi"al "a#a"ity at 8ata #lant from ,+.... to :+.... In "onsortium )ith se eral national and international "om#anies GAIL )as a)arded +; blo"ks under !'L8 Gailtel a"hie ed the #rofit of .*/B"r

2IG2LIG2-S !7889.788:" Go t a)arded marketing rights of 8MT gas to GAIL as Go t of India nominee Transmission of gas to Goda ari from 3rishna as done by the agreement bet)een GAIL and 5LTIL M2U )ith 5elian"e for $oint "oo#eration in #etro"hemi"als '1#ansion of 8ATA #lant 0oint enture )ith China(China gas global energy) M2U )ith IT'5Aoil and gas "om#any of 5ussia 0oint enture for "ity gas #ro$e"ts in 5a$asthan(GAIL A!= 48LL) City gas distribution in Hest @engal(GAIL and Indian oil)

S10SI)IARIES ; 5+IN-4EN-1RES of GAIL

Gail(India) Ltd has been the #ioneer for City Gas 8ro$e"ts in India* Hith natural gas emerging as the fuel of "hoi"e in the "ountry% Gail (India) Ltd belie es that the ne1t de"ade )ill belong to the "ity gas* Gail (India) Ltd )as the first Com#any to introdu"e City Gas 8ro$e"ts in India for su##lies to households% "ommer"ial user and for the trans#ort se"tor by forming 0oint 6enture Com#anies* Su&sidiaries GAIL Gas Limited Gail (India) Ltd has formed a )holly o)ned subsidiary named KGAIL Gas LimitedD for im#lementing City Gas 8ro$e"ts and C!G "orridor in the "ountry* The subsidiary "om#any )ill a"t as a ehi"le for bidding for laying of #i#eline infrastru"ture in the "ountry* GAIL Glo&al !Singapore" Pte' Limited Gail (India) Ltd has a )holly o)ned subsidiary% namely% GAIL Global (Singa#ore) 8te Ltd* to manage in estments abroad* Gail (India) Ltd is looking for further business o##ortunities through this subsidiary "om#any* 0rahmaputra Cracker and Pol/mer Limited Gail (India) Ltd has B.7 eFuity share )ith 2il India Limited (2IL)% !umaligarh 5efinery Limited (!5L)% Go t* of Assam% ea"h ha ing +.7 eFuity share* The authori9ed "a#ital of the "om#any is 5s* +%-.. Crores* A Ceedsto"k Su##ly Agreement has been signed bet)een @rahma#utra Cra"ker and 8olymer Limited (@C8L)% and all the three su##liers i9*% 2il and !atural Gas Com#any Limited% 2il India Limited and !umaligarh 5efinery Limited* Cinan"ial "losure for the #ro$e"t is likely to be "om#leted during the year -..<./*

5oint 4entures
Aavantika Gas Limited !AGL"< AGL is a 0oint 6enture of Gail (India) Ltd and 4industan 8etroleum Cor#oration Limited (48CL) for im#lementation of City Gas 8ro$e"ts in the "ities of Madhya 8radesh* AGL has started #ro$e"t im#lementation a"ti ities in the "ity of Indore* Gail (India) Ltd has --*;7 stake in the Com#any along )ith 48CL as eFual #artner* 0hag/anagar Gas Limited !0GL"< @GL is "urrently o#erating three Auto L8G stations in 4yderabad and one Auto L8G station in Tiru#athi* It is "urrently o#erating si1 C!G stations in 6i$aya)ada andthree C!G stations in 4yderabad* Gail (India) Ltd has --*;7 stake in the "om#any along )ith 48CL as eFual #artner* Central 1'P' Gas Limited !C1GL"< CUGL is "urrently o#erating fi e C!G stations in 3an#ur% one C!G station in @areily and one C!G station in 3an#ur is under "ommissioning* CUGL is building M=8' net)ork for su##ly of 8!G to domesti"% "ommer"ial and industrial se"tors in the "ity of 3an#ur* Gail (India) Ltd has --*;7 stake in the "om#any along )ith @8CL as eFual #artner* Green Gas Limited !GGL"< GGL is "urrently o#erating four C!G stations in Lu"kno) and three C!G stations in Agra* GGL )ill also take u# #ro$e"t im#lementation in other "ities of Hestern U8 on the basis of gas a ailability and #ro$e"t iability* Gail (India) Ltd has --*;7 stake in the "om#any along )ith I2C as eFual #artner* Indraprastha Gas Limited !IGL"< IGL is su##lying #i#ed gas to around + La" domesti"% -BA "ommer"ial% +A small industrial "onsumers and C!G to o er +*,; La"s ehi"les through +;, C!G stations* IGL is "atering to )orldDs largest C!G bus fleet of o er ++%... buses in =elhi* Gail (India) Ltd has --*;7 stake in the "om#any along )ith @8CL as eFual #artner*

ahanagar Gas Limited ! GL"< MGL has set u# +-< C!G stations "atering to o er +*<; La"s ehi"les s#read o er Mumbai% Thane% Mira- @hayandar and !a i-Mumbai areas besides su##lying 8!G to o er ,*:. La"s domesti"% /.B "ommer"ial and ,A small industrial "onsumers* Gail (India) Ltd has :/*B;7 stake in the "om#any along )ith @ritish Gas as eFual #artner* aharashtra Natural Gas Limited ! NGL"< M!GL is a 0oint 6enture of Gail (India) Ltd and @harat 8etroleum Cor#oration Limited (@8CL) for im#lementation of City Gas 8ro$e"ts in 8une "ity* M!GL is de elo#ing ne"essary infrastru"ture for su##ly of C!G and 8!G in the "ity* Gail (India) Ltd has --*;7 stake in the "om#any along )ith @8CL as eFual #artner* Petronet LNG Limited !PLL"< 8LL )as formed for setting u# of L!G im#ort and regasifi"ation fa"ilities* 8LL has a long term L!G su##ly "ontra"t )ith 5as Gas% Eatar for im#ort of B*; MMT8A* 8LL =ahe$ terminal is being e1#anded to +. MMT8A "a#a"ity* Gail (India) Ltd has +-*;.7 stake in the "om#any along )ith @8CL% I2C and 2!GC as eFual #artners* Ratnagiri Gas and Po(er Private Limited !RGPPL"< 5G88L is a 0oint 6enture Com#any bet)een Gail (India) Ltd% !T8C% Cinan"ial Institutions and MS'@* Gail (India) Ltd has -<*,,7 stake in the "om#any along )ith !T8C as eFual #artner* The "a#a"ity of the 5atnagiri Gas ? 8o)er Station is -%+;. MH* Gail (India) Ltd has made an in estment of 5s* ;.. Crores and has a##ro ed additional eFuity of 5s* :B; Crores to 5G88L% out of the 5s* :B; Crores% an amount of 5s* /-*/. Crores has been #aid during the month of May% -..<* -ripura Natural Gas Compan/ Limited !-NGCL"< T!GCL is #resently su##lying gas to AA.. domesti"% +.: "ommer"ial% -+ industrial "onsumers and has set u# one C!G station in Agartala "ity* Gail (India) Ltd has -/7 stake in the "om#any* Gail (India) Ltd has a##ro ed formation of 06 for City Gas 8ro$e"ts in 6adodara )ith 6adodara Mahanagar Se a Sadan (6MSS) )ith -A #er"ent eFuity% )hile 6MSS )ill ha e -: #er "ent eFuity* The balan"e ;. #er "ent eFuity )ill be held by strategi" in estors and #ubli"* A 06 agreement has also been signed )ith 48CL for "ity gas #ro$e"ts in 5a$asthan*

6uture Plans of Gail ('r't Natural Gas

Ph/sical Gro(th Strateg/ and ,a/ 6or(ard< #' )omestic Gas Sourcing ; arketing

Strateg/ Target transmission of -:A MMSCM= and marketing of +;< MMSCM= gas out of total estimated gas a ailability of -/. MMSCM= by -.++-+ =e elo# ne) markets 2ffer fle1ibility in "ontra"t terms 2#timal utili9ation of net)ork through s)a##ingLsharing Segregation of ri"h and lean gas on 460L=68L for #ro"essing #lants 5ationali9ation of transmission tariff for s#ur-lines Action Plan Aggressi e tie-u# )ith #rodu"ersLsu##liers and linkage )ith u#"oming sour"es Gas Transmission Gas Marketing Timeline (MMSCM=) (MMSCM=) <, B. -..B-.< +-/ <, -..<-./ +<++-../-+. -.; +-A -.+.-++ -:A +;< -.++-+ Ad an"e a"tion on finali9ation of GSAs and GTAs for ne) #i#elines Le erage transmission "a#ability to se"ure more gas from ne) gas finds 2##ortunisti"ally o#erate #i#elines on "ommon "arrier #rin"i#le to bring additional re enue in terms of transmission tariff Ste# u# efforts to sour"e dire"tly from international marketsM utili9e "onne"ti ity bet)een 460 and Shell 4a9ira terminal 'fforts to retain e1isting "ustomers and ensure that future "ustomers "hoose GAIL o er "om#etitors*

7' Gas -ransmission Strateg/ 8roa"ti ely e1#and #i#eline infrastru"ture from A+.. km to ++... km by -.++-+- to meet the transmission target of -:A MMSCM=* Le erage e1isting "a#a"ities in trunk lines ? regional net)orksM fo"us on o#timi9ation of #i#eline "a#a"ity* 5edu"e #ro$e"t "ost and e1e"ution time* Create s#urlines for #ros#e"ti e City Gas =istribution #ro$e"ts Action Plan '1e"ution of Se en 8i#eline #ro$e"ts by -.++-+- > Pipeline -imeline # Ca#a"ity augmentation of =68LLG5'8 I 8hase-+> !e) Com#ressor Station in =68L ? Loo#-line in -../ G5'8 Ii 8hase-II> Loo#line in =68L? Com#ressor station in G5'8 -.++ 7 Chainsa-Gurgaon-4issar 8LL I 8hase II > u# to 0ha$$ar -../ Ii 8hase I II> u# to 4issar -.++ = =adri-@a)ana-!angal 8LL I 8hase II > u# to @a)ana -../ Ii 8hase I II> u# to !angal -.++ > =abhol-@angalore 8LL -.++ ? 3o"hi-Mangalore-@angalore 8LL -.++ $ 0agdish#ur-4aldia 8LL -.++ 9 3o"hi-3ayamkulam 8LL -.+ 8re#are a #a#er on &Corridor of ri"h gas and lean gas #i#elines se#arately( for fa"ilitating o#erations of Gas 8ro"essing Units ? 8etro"hemi"al 8lant* Strengthen #ro$e"t management skills Sin"e future #i#eline #ro$e"ts )ill be allotted based on "om#etiti e bidding #ro"edure by regulator% ensure "om#etiti eness in terms of "ost effi"ien"y% e1e"ution timelines et"*

='

Cit/ Gas

Strateg/
Aggressi ely #ursue City Gas o##ortunities in =omesti" "ities Immediate #riority of rolling out "ity gas in more "ities > I -. "ities by -..<-./ I ;: "ities by -.+.-++ I +,. "ities by -.+--+, (GAIL has a##lied to Mo8?!G for authori9ation for City Gas =istribution in -,. "ities "ontiguous to e1istingL#ro#osed #i#elines in arious states of India) =e elo# C!G "orridors along high)ays "ontiguous to our !et)orks

>' E;P

Action Plan
Allo"ate gas for "ity gas #ro$e"ts on #riority out of the ne) se"ured sour"es (2!GC% 5IL% 5L!G% et"*) Corm 06s )ith 2MCs and arious gas #rodu"ers to e1#loit "ir"umstantial ad antages* '1#lore #ossibility of "ity gas #ro$e"ts inde#endently or through )holly o)ned subsidiaries* 8rioriti9e net)ork to be de elo#ed for the industry "lusters =etailed re#ort on de elo#ment of one C!G "orridor for trans#ort se"tor on #ilot basis

Strateg/
Target to be self-sustainable by -.++-+Se"ure gas sour"es through '?8 route to strengthen mid stream ? do)nstream business 8arti"i#ation as sole L $oint o#erator in =omesti" '?8 L C@M @idding rounds @alan"ed #ortfolio of e1#loration ? de elo#ment assets* 8ursue international '?8 o##ortunities as non-o#erator A"Fuisition of small '?8 "om#any in India or abroad

Action Plan
Commer"iali9e #rodu"tion from ; blo"ks by -.++-+Identify farm-in and farm-out o##ortunities for balan"ing the #ortfolio =e elo# and strengthen '?8 "a#ability and resour"es for o#eratorshi# ensure reFuisite man#o)er strength by time bound re"ruitment #lan @alan"ed a##roa"h in '?8 - #arti"i#ation as ma$or #artner L o#erator in =omesti" '?8 @idding rounds '1amine the a##roa"h taken by other '?8 "om#anies*

Reforms of Natural Gas Industr/

#'# Gas market reform

A "entral issue for gas market reform in many e"onomies has been ho) to "reate more "om#etiti e and fle1ible markets in the #resen"e of natural mono#olies in transmission and distribution* 8i#elines% the only e"onomi" o#tion for trans#orting gas a"ross land% in ol e large fi1ed "osts and lo) marginal "osts of o#eration su"h that a gi en le el of demand "an usually be met at lo)er "ost by using one #i#eline intensi ely rather than building a se"ond #i#eline* ' en )hen a market gro)s beyond the initial design "a#a"ity of a #i#eline% "a#a"ity "an usually be e1#anded by adding "om#ressors at "onsiderably lo)er "ost than building a ne) #i#eline* 2ne of the #ur#oses of gas market reform is to se#arate the market for the gas "ommodity from the market for gas trans#ort ser i"es* In the traditional model for gas su##ly in many e"onomies% in"luding India% "onsumers ha e only been able to #ur"hase deli ered gas from a single #i#eline o)ner at a bundled #ri"e in"or#orating the "ost of the gas #lus the "ost of trans#orting it* Unbundling and o#en a""ess to #i#elines "reates the o##ortunity for gas "onsumers and #rodu"ers to negotiate dire"tly for the sale of gas% and then se#arately arrange for its trans#ort* In re"ent years% the Indian Go ernment has made signifi"ant #rogress in establishing a regulatory frame)ork for #i#eline a""ess and #ri"ing% seeking to #romote do)nstream "om#etition and in"reased #ubli" and #ri ate in estment in natural gas #i#eline infrastru"ture* In early -..A% the Indian 8arliament #assed the Petroleum and Natural Gas Regulator/ 0oard Act% )hi"h en isaged setting u# an inde#endent regulator to monitor #ost #rodu"tion a"ti ities* The Petroleum and Natural Gas Regulator/ 0oard% )hi"h is "urrently being established% )ill regulate> @uilding% laying% o#erating and e1#anding natural gas #i#elines* City or lo"al gas distribution net)orks% and A""ess% tariffs and te"hni"al standards*

The ob$e"ti e of the board is>-

to #rote"t "onsumer interests by fostering fair trade and "om#etition among entities engaged in s#e"ified a"ti ities relating to natural gas% and to ensure uninterru#ted and adeFuate su##ly of natural gas in all #arts of the "ountry and to #romote "om#etiti e markets in India*

To under#in the Petroleum and Natural Gas Regulator/ 0oard Act, the Go ernment has formulated the Gas 8i#eline 8oli"y for the de elo#ment of natural gas #i#elines and "ity or lo"al gas distribution net)orks% )hi"h "ame into effe"t at the end of -..A* The ob$e"ti e of the #oli"y is> to #romote #ubli" and #ri ate in estment in natural gas #i#elines and "ity or lo"al gas distribution net)orks% to fa"ilitate o#en a""ess for all #layers to the #i#eline net)ork on a nondis"riminatory basis% to en"ourage "om#etition among entities% and to #rote"t "onsumer interests in terms of gas a ailability and reasonable gas trans#ort tariffs*

A Gas Advisor/ 0oard (ill also &e set up to promote and develop the gas pipeline net(ork in India' Currently% o#en a""ess to the transmission net)ork is allo)ed on a limited s"ale* Cor e1am#le% 8etronet L!G $oint enture #artners use 4a9iraI6i$ai#urI0agdish#ur and =ahe$I6i$ai#ur net)orks to sell regasified L!G* !e) regulations are e1#e"ted to #ermit o#en a""ess on a larger s"ale and in a trans#arent manner% thus enabling #ri ate #rodu"ers and L!G terminal o#erators to sell gas dire"tly to their "ustomers* State go ernments are e1#e"ted to #lay a key role in fa"ilitating timely "om#letion and o#eration of #i#elines and "ity or lo"al natural gas distribution net)orks by ensuring statutory and other "learan"es are gi en )ithout delay* As the natural gas market in India matures% the #oli"y en isages the unbundling of gas transmission and marketing a"ti ities to a oid "onfli"ts of interest and to ensure that #i#eline o)nershi# does not #ro ide "om#etiti e ad antage to any gas seller% and all #layers ha e o#en a""ess to the gas grid on a nondis"riminatory basis* Im#ortantly% the #oli"y #ermits +.. #er "ent foreign dire"t in estment in laying natural gas #i#elines under the automati" a##ro al route% seeking to boost in estment in natural gas infrastru"ture de elo#ment and to su##lement domesti" sour"es of finan"e* Some of the "ontentious issues raised by the industry in relation to the ne) natural gas regulations "on"ern the #o)er of the board to regulate "ontra"t "arriers% )here #i#elines are laid e1"lusi ely for "onsumers% and the de"ision on the #i#eline is made bet)een the net)ork o#erator and a s#e"ifi" "onsumer* The board also has

the #o)er to determine a #eriod of e1"lusi ity for "ity or lo"al gas distribution net)orks% a #o)er that is su##orted by net)ork o#erators and "ontested by #ros#e"ti e ne) entrants (IC5A -..A)* =e elo#ment of a national gas #i#eline net)ork )ill be a key dri er of gro)th in IndiaDs natural gas market* 8assage of the Petroleum and Natural Gas Regulator/ 0oard Act and release of the asso"iated Gas 8i#eline 8oli"y is a signifi"ant ste# for)ard in "reating a robust regulatory frame)ork for do)nstream natural gas a"ti ities* The a##ointment of members of the #ro#osed regulatory board and finalisation of further #oli"y dire"ti es go erning the gas market are e1#e"ted to trigger mu"h needed in estment in the e1#ansion of gas transmission and distribution infrastru"ture* The Indian Go ernment estimates that in estment by #ubli" and #ri ate entities "ould rea"h almost :.. billion Indian ru#ees (around USN/ billion) o er the fi e years to -.++-+-* Gas transmission #i#elines a""ount for more than half of the e1#e"ted in estment% follo)ed by L!G terminals and "ity gas distribution net)orks at nearly one Fuarter (Mo8!G -..Aa)* 4o)e er% "larity on unresol ed or "ontentious issues is "riti"al for in estment to start flo)ing into the gas infrastru"ture se"tor and for a "om#etiti e gas market to emerge* If in estment in "oming years is less than o#timal% it )ill ha e a dam#ening effe"t on gas demand* Recent polic/ initiatives In re"ognition of the key role of ele"tri"ity in dri ing ra#id e"onomi" gro)th and #o erty alle iation% India has set the target of #ro iding a""ess to ele"tri"ity to all households by -.+- and in"reasing a ailability of ele"tri"ity to more than +... kilo)att hours #er #erson by -.+-* The latter target )ould reFuire an estimated "a#a"ity addition of more than +..%... mega)atts by -.+-* The go ernment has identified further ele"tri"ity se"tor reform that in"ludes> #romoting "om#etition in interstate transmission% setting u# an inde#endent go ernment authority to ensure nondis"riminatory grid a""ess for "om#eting generators% laun"hing a #rogram for "a#a"ity additions% redu"ing transmission and distribution losses% and attra"ting #ri ate in estment*

To meet the abo e ob$e"ti es% a ne) #oli"y and regulatory frame)ork is being #ut in #la"e% The 'le"tri"ity (Amendment) A"t -..B* -he Electricit/ !Amendment" Act 7889 #ro ides an enabling en ironment for a""elerated and more effi"ient de elo#ment of the #o)er se"tor% seeking to en"ourage "om#etition )ith a##ro#riate regulatory inter ention* There is no li"ensing reFuirement for ele"tri"ity generation and "a#ti e generation has been freed from all "ontrols under the A"t* The national ele"tri"ity #oli"y sets out guidelines for the a""elerated de elo#ment of the #o)er se"tor% #ro iding su##ly of ele"tri"ity to all areas and #rote"ting the

interests of "onsumers and other stakeholders% kee#ing in ie) the a ailability of energy resour"es% a ailable te"hnologies% e"onomi"s of ele"tri"ity generation% and energy se"urity issues* 2ther key initiati es in the se"tor in"lude the rural ele"trifi"ation #oli"y% and Mega #o)er #ro$e"ts (thermal generation #ro$e"ts of at least B.. mega)att "a#a"ity and hydro#o)er #lants of at least ,;. mega)att "a#a"ity that su##ly ele"tri"ity to more than one state)* +&jective of the stud/@project #"-o understand the consumption pattern of natural gas in India 7"-o anal/sis the gro(ing need of the natural gas in India' ="-o anal/sis factors constraining the development of gas market >"-o estimate the future demand for natural gas in India'

IndiaAs Energ/

iB

India% )ith a #o#ulation base of o er +*+ billion% is the fifth largest energy "onsumer in the )orld* Hith "onsum#tion at :;. Mtoe of #rimary energy in -..B India a""ounts for ,*B #er"ent of the total )orld #rimary energy "onsum#tion* The #er "a#ita energy "onsum#tion of less than -*. Mtoe #er "a#ita% ho)e er% is at the lo)er end of the s#e"trum% "om#ared to other "ountries su"h as China and USA* 4istori"ally% the "ountryDs energy "onsum#tion trend has sho)n a "om#ounded annual gro)th rate (CAG5) of A #er"ent*

In order to sustain su"h high #ro$e"ted e"onomi" gro)th rates India is fa"ed )ith the "hallenge of not only se"uring long term energy su##lies at reasonable "osts but also ensuring that su"h energy sour"es are "lean% "on enient and reliable* Today% India uses different forms of energy sour"es to fuel its e"onomy* These in"lude "oal% oil% natural gas% hydel and nu"lear besides other rene)able energy sour"es su"h as )ind% solar% biomass et"* Coal "ontributes a ma$or "hunk% about ;; #er"ent% to IndiaDs #rimary energy basket )ith oil and natural gas "ontributing ,. #er"ent and / #er"ent res#e"ti ely* The share of natural gas at < #er"ent% as against the )orld a erage of -: #er"ent% s#eaks of the #otential for de elo#ment of natural gas market in India* The Go ernment% as stated in the 4ydro"arbon 6ision -.-;% also #ro$e"ts the share of natural gas in IndiaDs energy basket to gro) from the "urrent < #er"ent to +; #er"ent by the end of the Tenth 8lan #eriod (-..A-.B) and to -. #er"ent by -.-:--;* The energy "onsum#tion matri1 of India is dominated by fossil fuels i9* "oal ? lignite% 2il? !atural gas* Total "ommer"ial energy "onsum#tion till -..B-.< has gro)n at CAG5 ofA #er "ent o er +/<.-<+ )hile natural gas "onsum#tion has gro)n at a CAG5 of +, #er"ent o er the same #eriod*

Sector (ise cosumption of Natural Gas in India'

Gas demand in India continues to &e influenced &/ the cost economics vis.C.vis alternative fuels pertaining to each of the end use sectors% primaril/ po(er and fertiliDer% as also the d/namics of these sectors' -he natural gas consumption in India in 7889 (as as follo(s<.

4arious agencies have made assessments in the past regarding natural gas demand and suppl/' -he same is given in the appendiB'

Introduction of Natural Gas

!atural gas is "lean fossil fuel )ith many uses* Its key "onstituent is methane-the sim#lest form of hydro"arbon mole"ule% "om#rising one "arbon atom atta"hed to form a hydrogen atom-)hi"h "ombines )ith o1ygen )hen burnt to form "arbon dio1ide and )ater* Methane is a "olorless% odorless gas )hi"h usually burns )ith a blue flame% but if there is not enough o1ygen #resent for "om#lete "ombustion the flame turns yello) indi"ating the #resen"e of soot (#ure "arbon) and the #oisonous by-#rodu"t% "arbon mono1ide* The "hara"teristi" smell of natural gas as sold to the "onsumer is added% either by the #i#eline transmission "om#any or by the lo"al distribution "om#any to make it easier to identify leaks 8i#eline gas is not a uniform #rodu"t sin"e the heat released by burning (its "alorifi" alue) de#ends on the #ro#ortions of its other "onstituents mainly "arbon dio1ide% nitrogen and hydrogen )hi"h de#end on )here the gas "omes from* In"rease amounts of "arbon dio1ide and nitrogen that dilute natural gas redu"e its "onstraint for entry to gas #i#eline net)orks and #rodu"ers must be able to su##ly natural gas )hi"h meets the relati ely narro) Fuality s#e"ifi"ations laid do)n by #i#eline o#erators*

!atural Gas "ome !atural gas is a "ombustible mi1ture of hydro"arbon gases* Hhile natural gas is formed #rimarily of methane% it "an also in"lude ethane% #ro#ane% butane and #entane* The "om#osition of natural gas "an ary )idely% but belo) is a "hart outlining the ty#i"al makeu# of natural gas before it is refined* -/pical Composition of Natural Gas Methane 'thane 8ro#ane @utane Carbon =io1ide 21ygen !itrogen 4ydrogen sul#hide C4: C-4A C,4< C:4+. C22!4-S B.-/.7 .--.7

.-<7 .-.*-7 .-;7 .-;7

5are gases

A% 4e% !e% Oe

Tra"e

In its #urest form% su"h as the natural gas that is deli ered to your home% it is almost #ure methane* Methane is a mole"ule made u# of one "arbon atom and four hydrogen atoms% and is referred to as C4:*

Natural Gas in > &asic forms<

LiFuified !atural Gas% L!G - !atural Gas )hi"h has been liFuefied at -+A. !atural Gas is liFuefied to fa"ilitate trans#ortation in "ryogeni" tankers a"ross sea 5egasified LiFuefied !atural Gas% 5L!G Com#ressed !atural gas% C!G - !atural Gas "om#ressed to a #ressure of -..--;. kgL"m- used as fuel for trans#ortation% C!G de"reases ehi"ular #ollution 8i#ed !atural gas% 8!G - !atural Gas distributed through a #i#eline net)ork that has safety al es to maintain the #ressure assuring safe% uninterru#ted su##ly to the domesti" se"tor

Sector.(ise use of natural gas

Se"tor

!atural Gas is used As fuel for base load #o)er #lants Generation of ele"tri"ity In "ombined "y"leL"o-generation by utilities #o)er #lants As feed sto"k in the #rodu"tion of Certili9er Industry ammonia and urea As an under boiler fuel for raising steam Industrial As fuel in furna"es and heating a##li"ations =omesti" and Cor heating of s#a"es and )ater "ommer"ial Cor "ooking Automoti e As a non-#olluting fuel As the ra) material from )hi"h a 8etro"hemi"als ariety of "hemi"al #rodu"ts e*g* methanol% are deri ed

Environmental Scanning of Natural Gas Sector

The natural gas market in India is #assing through a transition #hase )here ne) #aradigm is re#la"ing the e1isting frame)ork of "onsumer markets% su##liers% go t* #oli"ies et"* The dri ers of "hange "an be tra"ed to the emerging en ironment as follo)s> Political Environment I The Go t* is under an obligation to #ro ide adeFuate resour"es to its "iti9en for meeting their energy reFuirements* As #er 'le enth Ci e Gear 8lan o er half of the "ountryDs #o#ulation does not ha e a""ess to ele"tri"ity or any other form of "ommer"ial energy* The es"alating oil #ri"es ha e further made it diffi"ult for the Go t* to maintain its subsidi9ed fuel #oli"y* Therefore it needs to find out alternati e% e"onomi"ally iable fuels* !atural Gas emerges as the front runner among all other alternati e sour"es like hydro% )ind% solar and nu"lear energy* Economic Environment I The de elo#ment of Indian e"onomy reFuires suffi"ient su##ly of energy resour"es* In order to meet the a""elerating #a"e of e"onomi" gro)th% di ersifi"ation of energy resour"es is ine itable as oil im#orts are not de#endable )ith es"alating "rude #ri"es* The energy su##ly basket must "ontain a #ro#er mi1 of "on entional and non "on entional resour"es )ith a balan"ed a##roa"h to im#orts and domesti" #rodu"tion* @esides% #ri"es of alternati e fuels also influen"e the "onsum#tion #attern of energy resour"es* !atural Gas is "om#arati ely ery "ost effe"ti e for end users like #o)er% fertili9er et"* resulting into higher demand* Su"h "on"erns resulted into fo"us being shift to de elo#ment of alternati e fuel sour"es like natural gas% liFuefied natural gas (L!G)% "oal bed methane% gas hydrates et"* Social Environment I The in"reasing a)areness among #eo#le for en ironment #reser ation influen"ed their fuel "onsum#tion habits* 8ubli" Interest Litigations (8IL) L media sensiti9e #eo#le to)ards #reser ation of natureDs heritage for the

benefit of future generations and highlighted the degradation of en ironment due to arious kinds of #ollution* -echnological Environment I !e) '1#loration and Li"ensing 8oli"y (!'L8) initiated the #ri ate se"tor #arti"i#ation in oil and gas se"tor* The e1#loration and #rodu"tion a"ti ities ste##ed u# )ith use of ne) te"hnologies like high resolution , = seismi" sur ey et"* 8ri ate #layers sho)ed "om#arati ely higher e1#loration effi"ien"y and re#orted ne) oil and gas finds like 5ILDs 3G @asin find )hi"h en"ouraged all the #arti"i#ants in oil and gas market* This has made #ossible the utili9ation of ne) im#ro ed L latest te"hnologies in the "ountry*

Natural Gas . +utlook

Most agen"ies ha e #ro$e"ted IndiaDs demand of natural gas to gro) at a rate higher than other fuels su"h as oil and "oal* The future demand for natural gas in India )ill be dri en mainly by t)o fa"tors> the need for ne) sour"es of energy to fuel e"onomi" gro)th and im#ro e li ing "onditionsM and the desire to redu"e the "onsum#tion of "oal and liFuid fuels and thus the le el of #ollution* These dri ers are% ho)e er% sub$e"t to a number of "onstraints in determining the a"tual le el of gas demand> the #ri"e of gas and its "om#etiti eness vis--vis other fuels and the rate at )hi"h the do)nstream market is de elo#ed in both #o)er and non-#o)er se"tors* Many un"ertainties )ill affe"t the future gas demand le el% #arti"ularly )ith res#e"t to the "ost of su##ly and IndiaDs ability to "reate an integrated national trans#ortation and distribution net)ork* Com#etiti eness of natural gas against "oal in #o)er generation )ill also be a key determinant of gas-demand gro)th* IndiaDs demand #ro$e"tions ha e been made at different #oints in time using different assum#tions and for different #eriods* summarises the #ro$e"tions made by different agen"ies for the same milestone years o er res#e"ti e fore"ast #eriod by ado#ting the #ro"ess of inter#olation and e1tra#olation*

IN)IAN PLANNING C+

ISSI+N

Cor arri ing at the future demand for natural gas% se"tor)ise analysis has been "arried out as under>

Po(er Sector Anal/sis

The #o)er se"tor )ould "ontinue to be one of the ma$or "onsumers for natural gas* The Ministry of 8o)er has set a target of B.%... MH generation for the ; year #eriod ending -.+-* The "urrent thermal #o)er generation is about /.%<.. MH% of )hi"h +- #er"ent (+.%/.. MH) is gas based* The gas-based #o)er #lants% )hi"h are gaining e eryoneDs attention in the #o)er se"tor% )ould definitely be the main sour"e of energy in the future* Gas based #o)er #lants ha e a "a#a"ity of +%<</*- MH and the reFuirement of gas for the same is likely to be B*; MMSCM=* =e#artment of 8o)er has made a #ro$e"tion of additional ,,%A;; MH of gas based #o)er #ro$e"ts% )hi"h may "ome u# by -.+-* 2n an o#timisti" note% :. #er"ent of these #lants ha e been assumed to "ome u# by -.+-* This )ould translate into roughly +-%B.. MH of #o)er generation% reFuiring around ;.*<- MMSCM= gas* The #resent reFuirement of gas for the e1isting gas-based #o)er #lants is A<*+/ MMSCM=* Adding gas reFuirement of B*;. MMSCM= and ;.*<- MMSCM=% as e1#lained in the abo e 8ara% the total gas reFuirement by the end of -.++-+- is likely to be +-A*;B MMSCM=* Assuming that the gas reFuirement in"reases in the same #ro#ortion e ery year% the #ro$e"ted gas demand for the #o)er se"tor by -.++-+- )ould be as under>

Certili9er Se"tor Analysis> It has been )ell established that natural gas is the most "ost effe"ti e fuel is-P- is other liFuid fuels for fertili9er #lants* =uring the year -..:-.;% gas based fertili9er (urea) #rodu"tion a""ounted for AA #er"ent of the total fertili9er #rodu"tion* !a#htha and C2LLS4S based #rodu"tion a""ounts for the balan"e ,: #er"ent* 5eFuirement of gas for fertili9er se"tor is e1#e"ted to in"rease in the years to "ome% not only for meeting the "urrent shortfall being fa"ed by the e1isting gas based urea units but also on a""ount of>"on ersion of !a#htha and C2LLS4S based units to !GLL!G% de-bottlene"king of e1isting urea units% setting u# of ne) and e1#ansion of e1isting urea units and re i al of "losed urea units of 4industan Certili9ers Cor#oration Ltd (4CCL) and Certili9er Cor#oration of India (CCI)* All non gas based urea units )ill be "on erted to gas )ithin the ne1t three years* Under the abo e s"enario% the total reFuirement of gas for the fertili9er se"tor by the -.++-+- is e1#e"ted to be BA*-A MMSCM=* The break-u# of gas reFuirement year )ise and the "orres#onding #rodu"tion "a#a"ity of urea are>-

Cit/ Gas )istri&ution This is another se"tor )hi"h has a high gro)th #otential* Horld-)ide% "ity gas distribution has gro)n hand in hand )ith the gas se"tor de elo#ment in terms of su##ly infrastru"ture and transmission infrastru"ture* Hith the e1#e"ted gro)th in the gas su##ly and the simultaneous "reation of gas inter-state transmission infrastru"ture in India% this se"tor is bound to gro) in the "oming years* Hith the em#hasis on "lean en ironment% this se"tor )ould get the ne"essary thrust in the "oming years* In line )ith this% arious #layers% #rimarily led by GAIL% ha e dra)n u# ambitious #lans to roll out "ity gas infrastru"ture a"ross a number of "ities in the "ountry* Crom the e1isting "o erage of +. "ities% the "o erage is e1#e"ted to gro) to :. "ities in the ne1t ;-B years* This se"tor "an be e1#e"ted to gro) at double digit rates after -.+.* The demand in this se"tor )as about ++ MMSCM= in -..A-.B and +-*.< MMSCM= in -..B-.<* Assuming a "onser ati e annual gro)th of < #er"ent% the demand )ould be>-

Petrochemicals@Refineries@Internal Consumption and Sponge Iron@Steel and other Industries -he demand as per the industr/ estimates in the Petrochemicals@Refineries and Internal Consumption !of Gas Industries" sectors (as a&out 7='9# SC ) in 788$.89' -hese industries are estimated to gro( in line (ith countr/As projected economic gro(th' 2ence an annual gro(th rate of a&out 9 percent is assumed for the neBt ? /ear period% (hich (ould result in a demand of =='7? SC ) &/ the 78##.#7' Similarl/% the sponge iron@steel sector is also eBpected to gro( at the same rate of 9 percent from the current level of $ SC )% reaching a level of 9':$ SC ) &/ the 78##.#7'

INDIAN GAS SECTOR: CONSUMPTION PATTERN

10900 MW
12#

12 MMTPA "8#
FERTILISER (21 MMTPA)

POWER (90800 MW)

1 MMTPA $!#

2 " MMTPA !1#

PETROCHEMICALS (2 ! MMTPA)

LPG + LIQUID HYDROCARBON (8 MMTPA)

N%& '() *()+, -&./)

+B

SIGNIFICANT POTENTIAL FOR GAS IN ALL END USE SEGMENTS

0ased on the a&ove anal/sis% the consolidated demand estimate is presented as<.
Sector ,ise Gas )emand Projections !7889.78#7" 7889.8: 8o)er Certili9er City gas Industrial 8etro"hemi"alsL 5efineriesLIntern al Consum#tion S#onge ironLSteel Total B/*B. :+*.+-*.< +;*.. -;*,B 788:.8E /+*-. :-*</ +-*/, +A*.; -B*+; 788E.#8 +.-*B. ;;*/. +,*<, +B*+B -/*.; 78#8.## ++:*-. BA*-A +:*<. +<*,< ,+*.< 78##.#7 +-A*;B BA*-A +;*<, +/*AA ,,*-;

A*.. +B/*+B

A*:+/A*A:

A*<B --;*;-

B*,; -A-*.B

B*<A -B/*:,

Natural Gas Suppl/ Considerations

Meeting the signifi"ant #otential for gro)th in natural gas demand in India )ill reFuire a substantial in"rease in gas su##lies* This "ould be a"hie ed through a number of a enues% in"luding an in"rease in domesti" gas #rodu"tion% the "onstru"tion of natural gas #i#elines from international sour"es of su##ly% and the e1#ansion of L!G im#orts* 'a"h of these o#tions has different "ost #rofiles% energy se"urity im#li"ations and other "hara"teristi"s that )ill affe"t its "ontribution to IndiaDs gro)ing natural gas reFuirements o er the medium to longer term*

=omesti" natural gas #rodu"tion

As dis"ussed earlier% a number of domesti" gas fields "urrently su##ly IndiaDs gas reFuirements* 2ffshore fields% mainly the Mumbai 4igh field% #rodu"ed around --*A billion "ubi" metres of gas (eFui alent to +A*; million tonnes of L!G) in -..;-.A% around B. #er "ent of IndiaDs total gas #rodu"tion (Mo8!G -..Ab)* 2nshore fields% #arti"ularly in Gu$arat% Assam and Andhra 8radesh% #rodu"ed /*A billion "ubi" metres of gas (eFui alent to B*. million tonnes of L!G) in -..;-.A* Hhile there has been some gro)th in natural gas #rodu"tion from onshore fields o er the #ast de"ade% #rodu"tion from offshore fields #eaked in -..,-.: and has sin"e de"lined as resour"es in the Mumbai 4igh gas field are de#leted* A number of offshore natural gas dis"o eries in India o er the #ast se eral years ha e in"reased the "ountryDs gas reser es* The most notable re"ent finds ha e o""urred in the 3rishna Goda ari (3G) basin lo"ated in the @ay of @engal off IndiaDs east "oast* IndiaDs total #ro ed gas reser es are +*+ trillion "ubi" metres and at "urrent #rodu"tion rates )ill last for ,: years (@8 -..B)* This does not in"lude many of the re"ent 3G basin finds% )hi"h are yet to be #ro en* The first gas from the 3G basin is due to be deli ered onshore by the end of -../% initially #rodu"ing around +:*A billion "ubi" metres of gas a year (eFui alent to +.*B million tonnes of L!G)* In early -..B% a gas trans#ort and gas sale and #ur"hase agreement )as signed bet)een 5elian"e Industries Limited (5IL) and GAIL* The agreement )ill enable 5IL to use GAILDs #i#eline net)ork in Andhra 8radesh% Madhya 8radesh and other states% and entitle GAIL to sell a share of 5ILDs gas from the 3G basin* The "a#ital "osts of 5ILDs 3G basin #ro$e"t are estimated to be USN;*- billion (5IL -..B)*

2ffi"ial Indian Go ernment natural gas #rodu"tion #ro$e"tions for the ++th fi e year #lan sho) a signifi"ant in"rease in #rodu"tion from -../% )hen the 3G basin is due to "ommen"e #rodu"tion* 4o)e er% this is balan"ed against falls in su##lies from e1isting gas fields o er the life of the #lan* T)o s"enarios are #resented by the Indian Go ernment% )ith natural gas #rodu"tion #ro$e"ted to range bet)een ,/*; and B,*< billion "ubi" metres in -.++ in the normal and o#timisti" s"enarios res#e"ti ely* The Indian Go ernment has stated that there are a number of un"ertainties surrounding the "ommen"ement of su##lies in the o#timisti" s"enario*

Gas Suppl/ +utlook

2n the gas su##ly side% the domesti" su##lies )ould be #rimarily dri en by the e1#e"ted su##ly from the 3G basin by 5IL in -..<-./* The su##ly #ro$e"ted by 2!GC in the 8lan #eriod is e1#e"ted to fall from :B*-< MMSCM= in -..B-.< to ,- MMSCM= in -.++-+- and Su##ly from 8ri ate #layersL06s is e1#e"ted to in"rease from -,*-A MMSCM= to about ;B*-- MMSCM= in -.++-+-* This in"rease from #ri ate #layers is #rimarily due to the :. MMSCM= gas su##ly addition from 5IL from -../-+. on)ards* =G4 has #ro$e"ted e1#e"ted additional su##lies of -.% ,. and :. MMSCM= from 5IL fields in -../-+.% -.+.++ and -.++-+- res#e"ti ely and ;: MMSCM= from GS8C in ea"h of the abo e years* 4o) mu"h of these additional su##lies )ould a"tually fru"tify )ould a"tually determine the #ros#e"ts of the domesti" su##ly s"enario and )ould ha e a #rofound influen"e on the o erall demand-su##ly balan"e* These additional su##lies ha e been "onsidered under s"enario II% an o#timisti" s"enario* 3ee#ing the abo e as#e"ts in ie)% the total #ro$e"ted gas su##lies )ould be <.*;: MMSCM= in -..B-.< e1#e"ted to gro) to +.<*, MMSCM= in -.++-+- under s"enario I (!ormal S"enario)* In S"enario II (2#timisti" S"enario)% the su##lies )ould gro) from <.*;: MMSCM= in -..B-.< to -.-*,. MMSCM= in -..+-+-* The detailed su##ly #ro$e"tions under the t)o s"enarios are>

Gas suppl/ projections ! Sources 2!GC Q 2IL (A) 8 t*L 06s (As 8er =G4) (@)

SC )" 7889. 8: ;B*-< -,*-A 788:.8E ;<*:A+*;A ++/*/< 788E. #8 ;;*A/ A.*-< ++;*/B 78#8. ## ;:*AB ;<*:++,*./ 78##. #7 ;+*.< ;B*-+.<*,.

8ro$e"ted =omesti" Su##ly <.*;:

Gas suppl/ projections ! Sources (AQ@) Additional Gas Anti"i#ated (C) Total 8ro$e"ted S"enario + (AQ@) Su##ly

SC )" 7889. 8: 788:.8E 788E. #8 78#8. ## 78##. #7

B: <.*;: ++/*/< ++/*/< ++;*/B +</*/B

<: ++,*./ +/B*./

/: +.<*,. -.-*,.

Total 8ro$e"ted Su##ly <.*;: S"enario - (AQ@QC)

The estimated ga# bet)een domesti" gas #rodu"tion and su##ly is mainly on a""ount of internal use by the #rodu"ers themsel es% te"hni"al flaring and gas shrinkages* Looking at the o erall demand #ro$e"tions and e en the most o#timisti" s"enario of e1#e"ted domesti" su##lies% it is ery "lear that there )ould be a su##ly shortfall* Therefore% there is a need to ste# u# im#orts in the "oming ; years* There is already an im#ort of L!G to the tune of +< MMSCM= by 8LL at =ahe$* This is being su##orted by the "ommen"ement of L!G su##ly from the 4a9ira Terminal of Shell )hi"h is% ho)e er% yet to stabili9e* To augment the shortfall% the "ountry is already #ursuing im#orts% both through the L!G route and the transnational #i#eline route*
LNG@Supplies through -ransnational Pipelines L!G is already an a""e#ted resour"e in the "ountry* India is lo"ated in a region )ith signifi"ant reser es of natural gas* India "urrently has one long term L!G su##ly "ontra"t bet)een 8etronet and EatarDs 5as Laffan L!G "om#any for the #hased su##ly of B*; million tonnes a year% )ith ;*. million tonnes "ontra"ted from -..: to -../ and the full olume from -../ to -.-/* Hhile other long term agreements ha e also been signed% in"luding )ith Iran% these agreements ha e not been finali9ed and ha e not been in"luded in the study* Some of the main features of IndiaDs L!G su##lies are>-

The ; MMT8A =ahe$ terminal of 8LL is o#erating at full "a#a"ity* The 4a9ira terminal of Shell )ith a "a#a"ity of -*; MMT8A is o#erational but is yet to stabili9e* Gi en the non-stabilisation of Shell 4a9ira terminal% it has been assumed that Shell terminal )ould o#erate at -*; MMT8A "a#a"ity during ne1t ; years* The =ahe$ terminal is set to e1#and to +. MMT8A by -.+.-++* @esides% the #lanned 3o"hi terminal of 8LL )ith a "a#a"ity of -*; MMT8A (e1#andable to ; MMT8A) is e1#e"ted by -.+.-++* The ; MMT8A =abhol terminal is #ro$e"ted to be fully o#erational by -../-+.*To begin )ith the su##lies )ould be +*- MMT8A% )hi"h )ould in"rease to -*+ MMT8A in -..<-./ to "ater to the =abhol 8o)er #lant* This terminal )ould also thro) u# a mer"hant sale olume of -*/ MMT8A in -../-+. )hen long term L!G is "ontra"ted* The "onfirmation of Mangalore L!G terminal "ould be a #ossibility and +*-; MMT8A im#orts "ould #erha#s be e1#e"ted at this terminal by -.++-+-* Gi en this s"enario% the L!G su##ly is #ro$e"ted to rea"h a le el of -,*B; MMT8A by the year -.++-+- (8otentially it "an add u# <,*+- MMSCM= su##lies at full "a#a"ity)* Though there is a #ossibility of su##ly of about +< MMSCM= of gas from the Myanmar through the #ro#osed MyanmarIIndia 8i#eline in -.+.-++L-.++-+-% this has not been "onsidered for analysis #ur#ose due to the un"ertainties in ol ed* Gi en the #resent le el of inter-Go ernmental dis"ussions on the other t)o #i#elines% i9*% Iran-8akistan-India #i#eline and Turkmenistan-Afghanistan8akistan-India Gas 8i#eline% no gas su##lies ha e been #ro$e"ted through these #i#elines in this study* The o erall L!G su##ly #ro$e"tions are gi en as>LNG suppl/ projections L!G Su##ly Sour"e =ahe$ 4a9ira =abhol 3o"hi Mangalore Total L!G Su##ly (MMT8A) Total L!G (MMSCM=) .B-.< ;*.. -*;. +*-. <*B. Su##ly ,.*:; .<-./ ;*.. -*;. -*+. /*A. ,,*A. ./-+. B*; -*;. ;*.. +;*.. ;-*;. +.-++ +.*.. -*;. ;*.. -*;. -.*.. B.*.. ++-++.*.. -*;. ;*.. ;*.. +*-; -,*B; <,*+-

Assum#tions> +) 4a9ira e1#ansion to ;*. MMT8A is not "onsidered in the study* -) Mangalore terminal is e1#e"ted to be #artially "ommissioned in -.++-+-*

The im#ort #lans of arious "om#anies )ould to a great e1tent augment the su##lies to meet the demand shortfall* Gi en the t)o s"enarios of su##ly% the total su##ly in"luding L!G is e1#e"ted to in"rease from +..*// MMSCM= in -..B-.< to a le el of +<+*:- MMSCM= in -.++-+- under S"enario I (!ormal S"enario)* Under 2#timisti" S"enario II% the total gas su##ly is e1#e"ted to in"rease from +..*// MMSCM= in -..B-.< to -B;*:- MMSCM= in -.++-+-% es#e"ially dri en by the additional su##ly of 5IL and GS8C from -../-+. on)ards* =emand I Su##ly Ga# for !atural Gas It is e1#e"ted that there )ould be a demandIsu##ly ga# (shortfall in su##ly) to the e1tent of AB*/< MMSCM= in -..B-.< )hi"h )ould fall to :-*<+ MMSCM= in -..<-./ in both the s"enarios* Crom this le el% the ga# )ould in"rease steadily to /+*+, MMSCM= by -.++-+- in S"enario I% )hereas under S"enario II% the ga# )ould by and large be bridged from -../-+. on)ards and there is e1#e"ted to be a demandIsu##ly balan"e during the last , years of the OI 8lan #eriod* The o erall demandIsu##ly balan"e is #resented belo)>

+verall Gas )emand Suppl/ projections Suppl/ 8ro$e"ted =omesti" (2!GC L06L 86T) (A) L!G (C) Total Su##ly (AQC) S"enario + Su##ly 89.8: <.*;: 8:.8E ++/*/< 8E.#8 ++;*/B B: ,.*:; ++.*// ,,*A. +;,*;< +;,*;< ;-*;. +A<*:B -:-*:B #8.## ++,*./ <: B.*.. +<,*./ -AB*./ ##.#7 +.<*,. /: <,*++/+*:-<;*:-

Additional anti"i#ated su##ly (@)

Total Su##ly (AQ@QC) S"enario ++.*// =emand (MMSCM=) =emand Su##ly Ga# I =emand Su##ly Ga# II +B/*+B A<*+< A<*+<

+/A*A: :,*.; :,*.;

--;*;;B*.; -+A*/;

-A-*.B B<*/B -;*.,

-B/*:, <<*., -;*/B

CRISIL Research

)emand to gro( at a CAGR of #7 F over neBt ? /ears

4istori"ally% demand for natural gas has al)ays been higher as "om#ared )ith su##ly* 4o)e er% due to the global slo)do)n% the Indian e"onomy has also started sho)ing signs of "ooling demand gro)th* In su"h a s"enario% the demand su##ly gas is e1#e"ted to shrink o er the ne1t ; years* Though natural gas su##ly (domesti" su##ly and firm L!G im#orts) is e1#e"ted to in"rease at a CAG5 of +:*. #er"ent% it may not be suffi"ient to ser i"e the demand* C5ISIL e1#e"ts this defi"it to be ser i"ed by the s#ot L!G "argoes* Lo)er #ro$e"ted demand is an out"ome of C5ISIL outlook on #o)er and fertili9er #ro$e"ts* Hith Greenfield #o)er #ro$e"ts getting least #riority in the gas utili9ation #oli"y% some of the #ro$e"ts "onsidered may not materialise% and therefore% the demand su##ly ga# )ould not arise* Going for)ard% C5ISIL e1#e"t demand to be dri en by gro)th in "a#ti e #o)er #lants and gro)ing "ity gas distribution% mainly "om#rising C!G* Also% )ith fertili9ers getting the highest #riority in gas utili9ation #oli"y% C5ISIL e1#e"t at least some of the "losed units to reo#en o#erations% thus in"reasing the gas demand* In"rease in "a#ti e #o)er #lants and "ity gas distribution )ill "hange the "onsum#tion mi1 "onsiderably* Share of #etro"hemi"als% refineries and s#onge iron #lants is e1#e"ted to de"rease substantially% as there arenDt many #lanned additions in these se"tors*

Natural gas demand &reak up

Mms"md 8o)er Ca#ti e #o)er #lant Certiliser 8etro"hemi"als S#onge iron 5efinery use City gas distribution Total -..B.< ::*. ++*< ,-*B A*, :*< /*, ;*, ++:*-..<./(#) ;A*A +-*: ,,*, A*: :*/ /*< B*: +,.*/ -../+.(#) A.*< +<*, ,B*< A*B :*/ +.*: +.*, +:/*+ -.+.++(#) A.*< +/*B :<*B A*B :*/ +.*A +,*B +A;*+ -.+++-(#) AA*< -+*A ;A*/ A*B ;*. +.*/ +B*A +<;*A -.+-+,(#) B:*A -,*+ ;<*A*B ;*. ++*, --*+ -.+*. CAG5( 7) ++*+:*, +-*, +*+*. ,*< ,-*< +-*.

8 R #ro$e"ted !ote =emand #ro$e"tions do not in"lude the unmet demand that may materialise )ith gas a ailability Sour"e> C5ISIL 5esear"h

city gas distri ution, !.3 refinery use, 9.3 sponge iron, 4.8 petrochemicals , 6.3

200012008

power, 44

fertilisers, 32.7

captive power plants, 11.8

power captive power plants fertilisers petrochemicals sponge iron refinery use city gas distri ution

20121201! 1P

power, 11.2 city gas distri ution, 32.8 refinery use, 3.8 sponge iron, 1 captive power plants, 14.3 c fertilisers, 12.3 petrochemicals , 1.2

power captive power plants fertilisers petrochemicals sponge iron refinery use city gas distri ution

8R 8ro$e"ted Sour"eR C5ISIL 5esear"h

City gas distribution to be the main dri er for demand gro)th =emand from "ity gas distribution% )hi"h in"ludes the "om#ressed natural gas (C!G) stations% #i#ed natural gas(8!G) to industries for heating% and domesti" and "ommer"ial 8!G% a""ount for ; #er"ent of total natural gas demand* Gas as a heating fuel is used in many industries su"h as "erami"s% #a#er% metals% automobile "om#onents% "hemi"als% te1tiles% food #ro"essing and tea* City gas distribution is e1#e"ted to boost the demand for natural gas* It is e1#e"ted to re"ord a CAG5 of o er ,-*; #er"ent as many "om#anies ha e been aggressi ely announ"ing #lans for "ity gas distribution* City gas distribution is also getting a boost from the go ernment* City gas distribution #lans getting higher #riority than the green field #o)er #lants #ro es the fa"t that go ernment as liFuefied #etroleum gas (L8G) and su#erior kerosene oil(S32) "onsum#tion )ould redu"e* C!G is e1#e"ted to gro) at a rate lo)er than the o erall "ity gas distribution gro)th rate* Currently C!G demand is around ,*< mms"md and a""ounts for o er B+ #er"ent of the "ity gas distribution demand* 8!G is still to #i"k u# #a"e and hen"e going for)ard 8!G and industrial usage are e1#e"ted to gro) faster as "om#ared to the C!G*

ost of the industries mentioned earlier% use the costlier fuel oil or naphtha either for heating purposes% or as a ra( material or feedstock' -his fuel% feedstock or ra( material can &e easil/ su&stituted (ith natural gas' Even spot LNG is priced lo(er than naphtha or fuel oil' 2ence% an/ gas availa&ilit/ (ill prove to &e &eneficial for these industries' ,ith gas suppl/ situation poised to change from 788E.#8% the industries% currentl/ operating on naphtha or fuel oil% are eBpected to s(itch to gas'

F-+2 P3.4+ C%56(3.)%&

(7 6+3 55*/-) 2! 2" 1! 1" ! " +oal (imported* +oa (domestic* #$% () 1" mm tu* $aphtha #$%& 'ooled indigenous natural gas ,uel oil -eries1

!ote>+* 8ri"es are e1"lusi ely of trans#ortation "ost and sales ta1* -* '1"hange rate at 5s:-*; #er dollar* ,* =omesti" natural gas #ri"e is landfall #ri"e in"lusi e of royalty* :* L!G #ri"e has been "al"ulated on the basis of N:*/, #er mmbtu and /;.. k"alLs"m ;* =omesti" "oal #ri"es are for K'D grade at #ithead and in"ludes royalty A* Coal(im#orted)#ri"es are landed "ost of "oal("?f Australia)%for -..B-.< B* !a#htha ? C2 #ri"es are a erage #ri"es during CG-..B-.< SourceGCRISIL Research In -..B-.<% shellDs 4a9ira terminal o#erated at o er <. #er"ent e en )hen some s#ot L!G "argoes fet"hed #ri"es as high as N -. #er mmbtu* Also% during the same #eriod% na#htha "onsum#tion de"lined* This #ro es that industries are fa ouring L!G o er na#htha e en at su"h high rates* In the first Fuarter of -..<-./% #ri"e of fuel oil and na#htha ha e s#ot u# e en higher% thereby in"reasing the demand for L!G* As the #o)er and fertili9ers se"tor reFuire large Fuantities of gas% they #refer long term gas "ontra"ts* 4en"e% the most of these s#ot "argoes )ould ha e been sold to other industries* At a erage #ri"e of o er N+,Lmmbtu for L!G% though fuel oil )ill be"ome "om#etiti e )ith L!G% na#htha )ill "ontinue to be the "ostliest energy sour"e and gas )ill be #referred% instead*

The heating reFuirement of industries is e1#e"ted to in"rease at a CAG5 of o er ,; #er"ent% )hile the 8!G demand(domesti" and "ommer"ial) is e1#e"ted to gro) the fastest at a CAG5 of o er :/ #er"ent* Po(er and fertiliDers.(ill continue to &e major consumers The #o)er and fertiliser se"tors ha e histori"ally been the ma$or "onsumers of gas% and are e1#e"ted to retain their share in the demand for natural gas* In -..B--..<% the t)o se"tors together a""ounted for around AB #er"ent of the total demand* 4o)e er% they a""ounted for A; #er"ent of the total off take of gas in -..B-.<* histori"ally also% the demand from these t)o se"tors has al)ays a""ounted for more than A; #er"ent of the total demand* Going for)ard as )ell% )e e1#e"t most of the demand to "ome from these t)o se"tors* In -..B-.<% demand from the #o)er and fertili9ers se"tors together )as BA*A mms"md% )hi"h is e1#e"ted to in"rease to around +,, mms"md in -.+--+, and is e1#e"ted to ha e a AA #er"ent share of demand* =emand from the #o)er and fertilisers se"tors is e1#e"ted to gro) at around ++*A #er"ent% )hile the total demand is e1#e"ted to gro) at around +- #er"ent% hen"e% both the se"tors together )ill be able to maintain their share of demand* =emand has been estimated% based on the gas utili9ation #oli"y% a ailability of gas su##ly in the area% e1#e"ted ne) "a#a"ities% as )ell as s)it"h in fuel by e1isting "a#a"ities* Currently% #o)er a""ounts for around ,< #er"ent and fertilisers for -/ #er"ent of the total demand for gas% in -.+--+,% )e e1#e"t #o)er to "ontinue to a""ount for ,B #er"ent of total natural gas demand% and fertilisers for around -/ #er"ent*

Po(er
8o)er% "a#a"ities using natural gas as fuel %a""ounts for almost +.*- #er"ent of the total #o)er generation "a#a"ities* 2ur "ountry has been fa"ing huge #o)er defi"it situation and this situation is e1#e"ted to "ontinue till -.+--+,* 4en"e% the go ernment is taking initiati es to in"rease #o)er generation and is en"ouraging thermal as )ell as hydel #o)er "a#a"ities* As a result% demand from the #o)er se"tor is e1#e"ted to gro) at a healthy rate* C5ISIL resear"h has assumed a realisti" outlook on gas-based #o)er #lant additions% based on "urrent #ro$e"t status and gas a ailability* The rising demand for natural gas from the #o)er se"tor is attributed to the e1#e"ted "a#a"ity s)it"hes% as )ell as ne) e1#e"ted additions* C5ISIL e1#e"t gas demand from around B/..MH of "a#a"ities o er the ne1t ; years* 2f this% around :++. MH )ould be s)it"h "a#a"ities )hile ,<<.MH )ould be "ontributed by ne) additions* Some of the ma$or #ro$e"ts not "onsidered by us during the #ro$e"tion hori9on are> relian"e #o)er limitedDs =adri #o)er #ro$e"t(,;A. MH)%!ational Thermal 8o)er Cor#orationDs 8ro$e"ts at 3a)as and Gandhar(-A..MH)%

Maharashtra State 'le"tri"ity @oardDs +.:.MH #lant in Uran and 3arnataka 8o)er Cor#oration LimitedDs #ro$e"t at @idadi%3arnataka(B..MH)* These #ro$e"ts ha e not been "onsidered as fuel su##ly agreement(CSA) has not yet been signed% nor has land been a"Fuired* 4en"e% C5ISIL do not e1#e"t these #ro$e"ts to be ready for "ommissioning before the end of -.+,* Also% )e ha e not in"luded go ernment #ro$e"ts of o er +.%...MH in our #ro$e"tions be"ause of our outlook on "a#a"ity additions in the #o)er se"tor* @y -.+--+,% the share of natural gas in the #o)er se"tor is e1#e"ted to de"rease from the "urrent +.*- #er"ent as )e e1#e"t lo)er additions in #o)er #lants using natural gas as fuel* Hith green field #o)er #lants getting last #riority in gas utili9ation #oli"y% C5ISIL 5esear"h e1#e"ts that some of the gas based #o)er #lants #lanned may not materialise )hile "oal based #o)er #lants )ould get en"ouragement* !atural Gas-=emand fore"ast for #o)er generation ! ," 788$. 89 7889. 8:E ++::A ,B. +%::; #$%8>= 7?>> 788:. 8EP +:B,. ++/: ,%/.A 78$>$ >$8> 788E. #8P +;<-: +;B. :A-: 77#9E #?== 78#8. ##P +;<-: +;B. :A-: 77#9E 8 78##. #7P +B:./ ---. ;;;< 7>>88 777# 78#7. #=P +/:,; :-:B ;;;< 797># 7:>8

Gas-based "a#a"ity '1isting "a#a"ity /A,+ Cumulati e additions Cumulati e s)it"h Gas reHuirement !mcm" Incremental demand !a#htha-based "a#a"ity !a#htha reFuirement (K... t#a) In"remental demand '> 'stimatedM 8> 8ro$e"ted Assum#tions

:+;/ .

-++A --.:,

+,/. -B-A

+,,-;<

<:. -:/,

-+. -A,.

+) 8LC of <.7 has been assumed% e1"e#t for kayamkulam and ko"hi )hi"h are assumed to ha e a 8LC of B.7* -) Calorifi" alue of natural gas has been assumed at /... 3"alLs"m* ,) Calorifi" alue of na#htha has been assumed at +.;.. 3"alLkg* :) 4eat rate of #o)er #lants has been assumed at +<.. 3"alL k)h* ;) Con ersion from MH to m"m R MHS+...S,A;S-:S.*<S(+<..L/...)L+.TA*

Source< CRISIL Research 6ertiliDers

=emand for natural gas from the fertilisers se"tor is based on our outlook for the fertilisers se"tor* The go ernment has em#hasised that fertilisers #lants based on na#hthaLfuel oilLLS4S should "on ert to natural gas by mar"h -.+.% failing )hi"h the higher #rodu"tion "osts )ould not be reimbursed* As a result% fertiliser #layers ha e been under #ressure to "on ert to natural gas* Also% the high "osts of na#htha and fuel oil ha e been instrumental in a""elerating the s)it"h* The go ernment has "ome out )ith gas utilisation #oli"y )hi"h gi es the #riority list for su##ly of gas from the ne) finds* As #er this #oli"y% e1isting fertiliser units get the to# #riority for gas su##ly amongst the e1isting #lants* Also the green field fertiliser #lants ha e got the to# #riority in the green filed #ro$e"ts #riority list* @ased on the a ailability of gas% fertiliser #lants )ill either s)it"h to gas or "lose do)n o#erations till gas be"omes a ailable* 2 er the ne1t ; yars% )e e1#e"t gas demand from o er than +,*, mt#a of fertiliser "a#a"ities% of )hi"h almost ;*B mt#a )ill "ome through s)it"hes*

(K... t#a) Gas based "a#a"ity '1isting "a#a"ity Cumulati e additions Cumulati e s)it"h Gas reFuirement (m"m) In"remental demand !a#htha based "a#a"ity !a#htha reFuirement

-..A.B +,+.-

-..B.< ' +B.B. . ,/AB ++/+/ +B<+//++/; +;.<:+

-..<./ 8 +B:-. -:: :.B: +-+A: -:; +<<; ++,+ +;.<:+

-../+. 8 +/B,A -;A. :.B: +,B<+ +A+B +<<; ++,+ +;.<:+

-.+.++ 8 -;::. ;,-A B.++BBA: ,/<, BB/ :AB . .

-.+++- 8 -/B,BA,A <//: -.BA+ -//B ,<. --< . .

-.+-+, 8 ,.::BA,A /B.: -+-;A :/A . . . .

C2LLS4S-based "a#a"ity C2LLS4S reFuirement '> 'stimatedM 8> 8ro$e"ted Assum#tins +* o#erating rates !a#htha Gas C2LLS4S

+.. 7 +.;7 +..7

-* Calorifi" alue Gas !a#htha C2LLS4S

/... k"alLs"m +.;.. k"alLkg /A.. k"alLkg

,* In#ut norms GasR.*AA; s"m #er tonne of urea* 'nergy reFt for urea has assumed at A million k"alLtonne !a#hthaR .*A tonnes #er tonne of urea C2LLS4S R .*;A tonne #er tonne of urea :* !e) "a#a"ities )ould be "ommissioned based on gas a ailability* Source< CRISIL Research

Re#earch $eth%d%l%&'
sample
Cor the #ur#ose of "om#letion of this #ro$e"t em#loyees )ere inter ie)ed* The sam#le si9e of ,. em#loyees )ere taken in order to "ome u# )ith the result

Sample techniHue
Sam#ling te"hniFue> "on enien"e sam#ling* -ools ; techniHues for data collection Tools ? te"hniFues for data "olle"tion as follo)s Statisti"al Tool> 5anking S"ale 5esear"h =esign> =es"ri#ti e Study Primar/ data collection< Euestionnaires )ere being filled u# by the 'm#loyees* Inter ie) )ere gi en by Mr* Shantanu @asu(Manager%Gas Marketing) Secondar/ source of data collection< 6arious internet sites%books% arious re#orts )ere sear"hed in order to find information useful for "om#letion of this #ro$e"t*

)ata Anal/sis and Interpretation

#' >8F emplo/ees think that reason for gro(ing demand in natural gas in india is its lo(er cost ' 7' =8F emplo/ees think that reason for gro(ing demand in natural gas in india is Govt'regulations =' 78F emplo/ees think that reason for gro(ing demand in natural gas in india is its eco friendl/ Hualities' >' #8F emplo/ees think that reason for gro(ing demand in natural gas in india is its efficienc/ in comparison of other fuels'

#' ??F emplo/ees think that the o&stacles for demand for natural gas as a fuel in India is its non availa&ilit/ of natural gas' 7' 78F emplo/ees think that the o&stacles for demand for natural gas as a fuel in India is its poor infrastructure' =' #?Femplo/ees think that the o&stacles for demand for natural gas as a fuel in India is its improper suppl/ management >' #8Femplo/ees think that the o&stacles for demand for natural gas as a fuel in India is its high cost'

+) :;7 em#loyees think that #o)er se"tor is the key demand dri er for natural gas* -) ,.7 em#loyees think that fertili9er se"tor is the key demand dri er for natural gas ,) +;7 em#loyees think that trans#ortation se"tor is a key demand dri er for natural gas* :) ++7 em#loyees think that "ity gas distribution se"tor is a key demand dri er for natural gas ;)/7 em#loyees think that other se"tor like s#onge iron% refinery et" are the key dri ers for natural gas*

+) :;7 em#loyees think that in )estern region%the "onsum#tion of natural gas is more* -) ,;7 em#loyees think that in northern region%the "onsum#tion of natural gas is more* ,) +;7 em#loyees think that in southern region%the "onsum#tion of natural gas is more* :) ;7 em#loyees think that in eastern region%the "onsum#tion of natural gas is more*

+) A;7 em#loyees think that Gail generated a ma1imum demand for natural gas )ith Indra#rastha Gas Limited(IGL) -) +;7 em#loyees think that Gail generated a ma1imum demand for natural gas )ith Mahanagar Gas Limited(MGL) ,) +.7 em#loyees think that Gail generated a ma1imum demand for natural gas )ith @hagyanagar Gas Limited(@GL) :) A7 em#loyees think that Gail generated a ma1imum demand for natural gas )ith Green Gas Limited(GGL) ;) :7 em#loyees think that Gail generated a ma1imum demand for natural gas )ith Aa antika Gas Limited(AGL)

+) :.7 em#loyees think that #eo#le are still not ready to a""e#t natural gas be"ause of la"k of a)areness -) -;7 em#loyees think that #eo#le are still not ready to a""e#t natural gas be"ause it is not easily a ailable near home* ,) -.7 em#loyees think that #eo#le are still not ready to a""e#t natural gas be"ause of its high "ost :) +;7 em#loyees think that #eo#le are still not ready to a""e#t natural gas be"ause of fear of using natural gas

+) <.7 em#loyees think that 5elian"e Industry Limited(5IL) is a "lose "om#etitor of Gail -) -.7 em#loyees think that Gu$arat State 8etroleum Cor#oration(GS8C) is a "lose "om#etitor of Gail

+) ;;7 em#loyees think that% by -.++-+- natural gas may a""om#lish +.7 market share in total fuel market in India -) ,.7 em#loyees think that% by -.+.-++ natural gas may a""om#lish +.7 market share in total fuel market in India ,) +;7 em#loyees think that% by -.+,-+: natural gas may a""om#lish +.7 market share in total fuel market in India

+) AA7 em#loyees think that India may not be"ome a self suffi"ient )*r*t !atural gas -) ,:7 em#loyees think that India may be"ome a self suffi"ient )*r*t !atural gas

*E3 6IN)INGS
The main reason for gro)ing demand for natural gas in India is its less "ost as "om#ared to other fuel* The obsta"les for demand for natural gas as a fuel in India are>- non a ailability of natural gas and #oor infrastru"ture* 8o)er and fertili9er se"tor are the key demand dri er for natural gas* !orthern and Hestern region ha e more demand for natural gas as "om#ared to Southern and 'astern region be"ause of Industrialisation in these region* Gail generated a ma1imum demand for natural gas )ith Indra#rastha Gas Limited(IGL) 5elian"e Industry Limited(5IL) is a "lose "om#etitor of Gail* 8ri"e and Go ernment regulation affe"ts the demand of natural gas* Gail has a different 06Ds to deal )ith #eo#le * they donDt )ant to do dire"tly be"ause it in"ludes high "ost for setting u# their o)n ser i"e stations* Gail is going to do "ollaboration )ith 5elian"e Industry Limited(5IL)*

=emand #ro$e"tions indi"ate robust gro)th in gas demand o er the ele enth #lan #eriod* =emand is #ro$e"ted to rise from +B/ mms"md in -..B-.< to -<+ mms"md by the year -.++-+-*

 The domesti" su##ly of gas% during the ele enth #lan #eriod is e1#e"ted to rise shar#ly mainly on a""ount of the re"ent dis"o eries in the 3*G*@asin* The domesti" gas su##ly figure estimates are <+ mms"md in -..B-.< going u# to -.mms"md by -.++-+- in o#timisti" s"enario* The "ontinuous shortfall of natural gas su##ly led to im#ort of L!G )hi"h lead to IndiaDs re"ognition as a serious #layer in international gas market* Im#ort of L!G )hi"h "ommen"ed in -..: for the first time is #ro$e"ted to in"rease to -,*B; mmt#a (<,*+- mms"md) during the ele enth #lan #eriod )ith ne) L!G regasifi"ation terminals being set u# in the "ountry* Gas Se"tor reFuires large in estments in setting u# of terminals% #i#eline

infrastru"ture% #ro"essing fa"ilities% "ity gas net)orks* It has been #ro$e"ted that around US N +. bn* )ould be reFuired by the natural gas se"tor during the ne1t -, years to meet the reFuirements in India

REC+
Energ/ )iversification

EN)A-I+N

=i ersifi"ation of Indian energy su##ly sour"es is essential #re "ondition for energy se"urity* !atural gas from )ells ("on entional sour"es) alone )ill not be suffi"ient to meet the gro)ing reFuirement of the e1#anding e"onomy* There is a need to #ursue )ith all earnest iable alternati es like gas hydrates% "oal bed methane% gas from dee#-sea% underground "oal gasifi"ation (UCG)% and gas storage in the u#stream side% C!G by shi#s and on-board L!G re-gasifi"ation in the midstream side et"* Su"h di ersifi"ation )ill hel# us in managing the imbalan"e in the #rodu"tion and "onsum#tion of gas in the "ountry* Infrastructure Support The de elo#ment of sound gas se"tor in India reFuires robust infrastru"ture su##ort in terms of #hysi"al fa"ilities like #i#elines% L!G terminals% rigs% turbines% C!G kits% "om#ressors% gas based automobiles et"* The finan"ial infrastru"ture "an be in terms of #ro ision of "om#etiti e "redit fa"ilities% ta1 "on"essions% ta1 holidays et"* In addition to this% de elo#ment of a #ool of skilled human resour"es is a sine Fua non for su##orting the likely gro)th in the se"tor Spread a(areness

The emergen"e of #ri ate initiati e )ill further in"rease the a)areness among #eo#le about the likely benefi"ial uses of natural gas and "onseFuently demand for a "leaner green fuel es"alates to ne) highs*

Pricing mechanism There is a need to re ie) #ri"ing me"hanism for natural gas both for domesti"ally #rodu"ed gas as )ell as L!G* Let the #ri"e be determined by free #lay of market for"es of demand and su##ly*

Government regulation 8!G5@ is e ol ing in their fun"tions as se"tor regulators* Go t* should enlarge their role as inde#endent and trans#arent regulator*

ore 5oint ventures Gail should e1#loit the northern belt and tie u# )ith "om#anies lo"ated near the belt* In gas marketing% the eastern belt(@ihar% )est @engal) should be ta##ed as there is tremendous #otential as )ell as o##ortunity )hi"h "an be harnessed* Retain their customers The emergen"e of ne) #layers and e1tent of market liberali9ation may #ose a threat to Gail and the essen"e to "ombat the "ree#ing "om#etition is by retaining the e1isting "ustomers and "reating sound #ros#e"ts* This "an be done by "reating both tangible and intangible benefits*

Conclusion
In Tenth Ci e Gear 8lan (-..--.B) Indian e"onomy gre) at a healthy rate of B*B7 #er year )hile during the same #eriod total #rimary energy "onsum#tion in India has in"reased from ,.B*< million tones of oil eFui alent (mtoe) in year -..- to :.:*: mtoe in year -..B sho)ing a CAG5 of ;*A+7* The demand for energy has been gro)ing ra#idly )ith the gro)th of the e"onomy% "hanges in the demogra#hi" stru"ture% rising urbani9ation and so"io-e"onomi" de elo#ment* In this #ers#e"ti e% the #rogress is ery en"ouraging ho)e er the resulting fall out in the form of in"reasing demand for energy resour"es is a "om#li"ated task to manage* A look at the Indian energy "onsum#tion by fuel ty#e refle"ts that "oal and oil are #redominant sour"es of energy follo)ed by natural gas* In -..B natural gas a""ounted for around /7 of the total #rimary energy "onsum#tion* In India the demand for natural gas is traditionally being dri en by #o)er and fertili9er se"tors )ith "ity gas distribution (CG=) and industrial se"tors emerging as gro)ing markets for utili9ation of natural gas* In -..B #o)er and fertili9er se"tors together "onstitute around A,7 of the total natural gas "onsum#tion in the "ountry*

IndiaDs integrated energy #oli"y en isages fulfilling energy demand of all se"tors a"ross "ountry )ith safe and "on enient energy at the least "ost in a te"hni"ally effi"ient% e"onomi"ally iable and en ironmentally sustainable manner* !atural gas is relati ely an e"o-friendly% "lean% safe fuel )ith higher thermal effi"ien"y and easy trans#ortability* The merits of natural gas o er alternate hydro"arbon fuels unders"ore its in"reasing signifi"an"e in the energy #oli"y of India and are #ushing it to fo"us of all the stakeholders in the alue "hain*

Gas )emand The Indian e"onomy is #ro$e"ted to gro) at /7 on an a erage during the OIth Ci e Gear 8lan #eriod from -..B to -.+-* This ambitious e"onomi" gro)th )ill dri e the demand for natural gas in the "ountry* The demand for natural gas )ill be +/A*A: million standard "ubi" meter #er day (mms"md) during -..<-./ )hi"h )ill es"alate to -B/*:, MMSCM= at the end of -.++-+-* The share of different se"tors in the total demand is #ro$e"ted to be "hanging during the entire ele enth #lan #eriod* The share of #o)er se"tor in total demand is #resumed to be in"reasing from :A*:7 in -..< to :;*,7 in -.+-* Similarly the fertili9er se"torDs share )ill in"rease from -+*<7 (in -..<) to -B*,7 (in -.+-)* It "an be seen that $ust like #resent demand s"enario in future also% the demand for natural gas in India )ill be #rimarily dri en by #o)er and fertili9er se"tor* The share of City Gas se"tor% Industrial se"tor% 8etro"hemi"als L 5efineries L Internal Consum#tion (like L8G) se"tor and S#onge Iron L Steel se"tor )ill be de"reasing in the o erall demand* The share of "ity gas se"tor )ill de"rease from A*A7 (in -..<) to ;*B7 (in -.+-)* Industrial se"tor )ill ha e a share of <*-7 in -..< )hi"h )ill "ome do)n to B7 in -.+-* 8etro"hemi"als L 5efineries L Internal Consum#tion se"tor )ill share +,*<7 of total natural gas demand in -..< )hi"h )ill go do)n to ++*/7 in -.+-* S#onge Iron L Steel se"tor )ill see its share in total demand de"reasing from ,*,7 in -..< to -*<7 in -.+-*

The s"o#e of demand )ithin a #arti"ular se"tor "an be better understood by the usage #attern of gas and other alternati e fuelsLfeedsto"k in its units* Cor instan"e% in the 8o)er Se"tor% only ++7 of total #o)er generation "a#a"ity is based on gas )hereas in the Certili9er se"tor% about ;<7 of #rodu"tion is based on gas* The "orres#onding figures of gas based units in the 8etro"hemi"als and L8GLLiFuid 4ydro"arbon se"tors are :,7 and ,+7 res#e"ti ely* The demand for natural gas during the #eriod -..B-+- )ill be gro)ing )ith a "om#ounded annual gro)th rate (CAG5) of /*-/7 (+B/*+B in -..B to -B/*:, mms"md in -.+-) to mat"h the #ro$e"ted gro)th rate of /7 for the e"onomy* 4o)e er to meet su"h a huge demand )ill be a "om#li"ated task*

Gas Suppl/
India remains a gas defi"it "ountry as its domesti" gas resour"es are yet to be fully e1#loited for #rodu"tion* The !'L8 has #ushed for)ard the e1#loration and #rodu"tion a"ti ities but the desired results are yet to be a"hie ed* The Oth 8lan #eriod (-..--.B) )itnessed some signifi"ant de elo#ments in the gas su##ly side s"enario* 5elian"e announ"ed gas dis"o ery of around+: trillion "ubi" feet (t"f) in -..- in the 3G basin on the east "oast of India* In -..:% first bat"h of im#orted LiFuefied !atural Gas (L!G) arri ed on Indian shores )hen 8etronet L!G Ltd* (8LL) started "ommer"ial su##lies of L!G from its ; million tonnes #er annum (mt#a) =ahe$ terminal* In -..;% Shell (India) Ltd*Ds -*; mt#a L!G terminal be"ame o#erational* This )as the first #ri ate se"tor firm to enter the gas su##ly segment* In -..A% Ministry of 8etroleum and !atural Gas (Mo8!G) re ise the #ri"es of A8M gas to make it in syn"hroni9ation )ith o#en market #ri"es of gas* The abo e e ents ha e influen"ed the su##ly s"enario in the "ountry* The su##ly #ro$e"tions for OIth Ci e Gear 8lan indi"ate su##ly to be in"reasing from <.*;:

MMSCM= in -..B-.< to +.<*, MMSCM= in -.++-+- )ith a CAG5 of A*+7 under normal scenario' The CAG5 of natural gas su##ly at A*+7 is lesser than the CAG5 of its demand at /*-/7 during the #lan #eriod of -..B-+- indi"ating the reFuirement of im#orts* In optimistic scenario the su##lies )ould gro) from <.*;: MMSCM= in -..B-.< to -.-*,. MMSCM= in -.++-+-* The o#timism is due to likelihood of additional gas finds in the "ountry in"luding 5elian"e 3G @asin gas find* The ga# in demand and su##ly of natural gas% under normal s"enario% for a year as a #er"entage of total su##ly ranges from A:7 to +;<7 of total su##ly for that year refle"ting the s"o#e of im#orts in the "ountry* The shortfall of domesti" su##lies )ill #rimarily be met )ith L!G im#orts* The total L!G im#orts in the "ountry are #ro$e"ted to in"rease from ,.*:; mms"md in -..B to <,*+- mms"md in -.+-* The im#ort of L!G as #er"entage of total demand in the "ountry ranges from +B7 in -..< to around ,.7 in -.+-* Thus des#ite im#orts of L!G India )ill still fa"e short su##ly of gas to meet its demand* 2ne of means to "alibrate the shortfall of gas is to allo) #ri"e determination of natural gas by the free for"es of demand and su##ly*

Scope of further stud/

#" -o stud/ the Impact of *rishna.Godaviri!*'G"0asin on Natural Gas market 7" Gail is going to do colla&oration (ith Reliance Industr/ Limited!RIL"' -o stud/ the paradigms for that colla&oration'

AnneBure

Euestionnaire
NA E< )esignation> -his surve/ has &een designed to &etter understand the different prospects of natural gas in India' 3our feed&ack is of high importance to m/ project' I hum&l/ reHuest /ou to give /our feed&ack as per /our convenience*

8l9*#rioriti9e on a s"ale of + to ;U**+ for the minimumUUU**; for the ma1imum (E+ toB)
E (+) )hat are the reason for gro)ing demand of natural gas in IndiaV
a) Less "ost as "om#ared to other fuel( ) (b) More effi"ient than other fuel( ) ") '"o friendly( ) (d) Go t* regulation( ) e) 2therU* (#l9 s#e"ify) E (-) )hat are the obsta"les for demand for natural gas as a fuel in indiaV a) non a ailability of natural gas( ) b) high "ost( ) ") #oor infrastru"ture( ) d) im#ro#er su##ly management( ) E (,) )hi"h se"tor is the key demand dri er for natural gasV a) #o)er se"tor( ) b) fertili9er se"tor( ) ")"ity gas se"tor( ) d) trans#ortation se"tor( ) e) otherUUUUUU(#l9 s#e"ify) E (:) In )hi"h region% the "onsum#tion of natural gas is ma1imumV a) northern region( ) b) )estern region( ) ") southern region( ) d) eastern region( ) E (;) In )hi"h region% the "onsum#tion of natural gas is minimumV a) northern region( ) b) )estern region( )

") southern region ( )

d) eastern region( )

E(A) )hy #eo#le are still not ready to a""e#t natural gas instead of other fuelsV a) la"k of a)areness( ) b) non a ailability easilyLnear home( ) ") fear ( ) d)high "ost as "om#ared to other fuel( ) E(B) )ho is your "lose "om#etitorV a) 5IL(5elian"e Gas Limited) ") 2thersUUUUUUUUU**#l9 s#e"ify b) GS8C( Gu$arat state #etroleum "or#oration)

E(<) by )hat time natural gas may a""om#lish +.7 market share in total fuel market in indiaV a) -../- -.+. b) -.+. I -.++ ") -.++ I -.+- d) -.+- I -.+, e) -.+,--.+: E(/) )hat do you think )heather% India may be"ome self suffi"ient in natural gasV a) if yesUU*by )hat time b) if noUU*)hy so

Personal intervie(
E+) =oes the #ri"e affe"t the demand of natural gasV E-) Are you targeting any other se"tor than the e1isting se"tors for in"reasing the demand of natural gas E,) Gail estimated the future demand a""ording to the different s"enario(#ri"eLmmbtu)* )hat are the "riteria to sele"t su"h s"enario* E:) GAIL is a market leader in this se"tor but no) #ri ate "om#anies su"h as 5elian"e Industry Limited entered in to this business* Hhat do you think% ho) it )ill affe"t the demand or market share of GAIL* E;) Crom the data% it sho)s that you ha e a less demand in southern and eastern region of India as "om#ared to northern and )estern region of India* Hhat are the reasons behind it* EA) =oes Gail #ro ide any subsidiary to those "ustomer )ho are demanding more Fuantity of natural gas EB) 4o) the go t* inter entionLregulations affe"t the demand of natural gasV E<) =onDt you think% if GAIL su##lies dire"tly to the "ustomer s#e"ially in "ity gas and trans#ortation se"tor then the "ost is redu"ed and the #rofit and the demand may in"reaseV E/) GAIL estimated the demand of natural gas before also% so did you a"hie e that #ro$e"ted demandV Hhat )as the result at that timeV

E+.) Hhat are GailDs future #lans for in"reasing the business )*r*t natural gasV

Conversion -a&le
+ @"m + year of gasR -*< MMSCM= + TCC of gas reser eR : MMSCM= + MMT8A of L!GR: MMSCM= + MT of L!GR+,.. SCM GC6R+...k"alLs"m !C6R/.7of GC6 + mmbtuR-;*- smd + kilolitreRA*-</< @arrels +kilo"alori"(k"al)R:*+<Bk$R,*/A<btu +kilo$oule(k$)R.*-,/k"alR.*/:< btu + btu(british thermal unit)R.*-;-k"alR+*.;;k$ Gas reFuired for + MH of #o)er GenerationR:;.. s"md 8o)er generation from + mms"md gasR--. MU Hhere% SCM=> Standard Cubi" meters #er day

MM@TU> Million Metri" @ritish Thermal unit Mmbt#aRmillion metri" british thermal #er annum GC6RGross Calorifi" 6alue

!C6R !et Calorifi" 6alue MuRmetri" units S"mRstandard "ubi" meter MT2'R million ton of oil eFui alent

)emand Projections 0/ 4arious Agencies for Natural Gas

Energy and Tourism, with assistance from BHP Billiton Petroleum Pty Ltd and Santos Ltd. to find out the prospects for LNG imports found the following demand and supply gap for ndia!"

P%tential &a# demand and #uppl' balance ( India

References
@ooks Gail infraline--..A 'n"y"lo#edia of #etroleum 5e#orts Credit 5ating Information Ser i"es of India Limited(C5ISIL 5esear"h) Marketing ? de elo#ment 5esear"h Asso"iates(M=5A) 'le enth fi e year #lan re#ort GAIL annual re#ort--..B-.< Hebsites )))*gailonline*"om )))*mo#ng*"om )))*#o)erin*ni"*in )))*#etroleum*ni"*in )))*teriin*org

 )))*iea*org )))*b#*"om )))*google*"o*in )))*)iki#edia*"om