IndianLPGMarketProspects

Apurva Chandra Joint Secretary-Marketing MOP&NG Government of India

2010-Madrid World LPG Forum 2010-Madrid

OverviewofPresentation
Indian LPG Scenario LPG Market Prospects
Potential in Rural India-Domestic Sector Industrial Sector Transport Sector

Stimulating Demand Through

Vision 2015 of MOP&NG Government Policies and Schemes

LPG Demand Outlook Way Forward

IndianLPGScenario
Fourth largest consumer of LPG inthe world after USA, China & Japan Third largest consumer in domestic sector in the world afterChina&USA Major market of LPG is DomesticSector Home Delivery of 3 Million LP Gas cylinders per day(i.e 900 Million/year) SteadyGrowth@8%p.a.inLPG ConsumptioninIndia
Top 5 Consumers-Domestic (2008)

LPG Demand (TMT) & Growth

IndianLPGScenario
Gap between demand & supply (indigenousproduction)
Demandin200910standsat 12746TMT IndigenousProductionin0910 was10323TMT Imports@22%oftotalLPG Demand IndigenousLPGproduction throughStateRun,PrivateAnd Fractionators
Demand Vs Supply (TMT)

Indigenous Production

IndianLPGScenario
ConsumptionPattern:
Domestic Commercial Industrial

Transport-Auto LPG

Domestic growth is 89% but overall pie has reducedovertheyears Commercial & Industrial Consumption is increasing. WorldConsumptioninIndustrialSectorisalmost 11%&inTransportis9%

High Growth Expected in Commercial/Industrial & Transport Sector

OverviewofPresentation
Indian LPG Scenario LPG Market Prospects
Potential in Rural India-Domestic Sector Industrial Sector Transport Sector

Stimulating Demand Through

Vision 2015 of MOP&NG Government Policies and Schemes

LPG Demand Outlook Way Forward

LPGMarketProspects
LPGPenetrationinDomesticSector:
Urban PopulationinMillion HouseholdsinMillion LPGConnectionsinMillion PenetrationofLPG 326.2 95 83.8 88% Rural 838.8 159 31.2 19.6% Total 1165 254 115.0 45%

Potential Market: Domestic Segment in Rural Areas

LPGMarketProspects
PotentialinRuralIndia:

72% of Indian Population lives in Ruralareas Population 87% of villages have population <200 lessthan2000
200 499 500 999 1000 1999 2000 5000 5000 9999 >10000 Total

DistributionofVillagesinIndia
Numberof Villages 114267 155123 159400 125758 69135 11618 3064 638365 %ofTotal 18% 24% 25% 20% 11% 2% 0% 100%

EncouragingFactsaboutRuralMarket:

Target Market

IncreaseinPurchasingPower ImprovingLiteracyLevels Imparting Functional Literacy to females Awarenessaboutcleanfuel

LPG can make significant contribution in protecting Environment & Human Health

LPGMarketProspects
IndustrialSector:
Commercial & Industrial Segment growing at 27% CAGR forlast5years AchievingGrowththrough: Conversionsfromconventionalfuels
toLPG
Commercial & Industrial LPG Sales

Creating Awareness about LPG as

cleanerfuel

CapitalInvestmentsinIndustriesfor
LPGInstallations

LPGMarketProspects
TransportSector:
Transport-Auto LPG Consumption per Vehicle: Kg/annum

Source:WLPGA2009

AutoLPGsalesincreasingby30%CAGRbetween200506and200910 With0.5MillionvehiclesrunningonAutoGas,Indiahaspervehicleconsumption of451Kgperannumagainstworldaverageof1428kgperannum.

OverviewofPresentation
Indian LPG Scenario LPG Market Prospects
Potential in Rural India-Domestic Sector Industrial Sector Transport Sector

Stimulating Demand Through

Vision 2015 of MOP&NG Government Policies and Schemes

LPG Demand Outlook Way Forward

StimulatingDemandinDomesticSector
Vision2015ofGovt.ofIndia
1. IncreaseinDomesticLPGConnections: FocusonareaswhereLPGpenetrationislowbygiving incentives Raisepopulationcoveragefrom50%to 75%. IncreasingLPGcustomerfrom107millionsto160 millionsby2015 SwitchOverfromKerosenetoLPG 2. CommonLPGKitchenMakingLPGaffordable: OpeningupcommunityKitchensinallvillageswith population>5000asapartofCorporateSocial Responsibility

Projected Growth in LPG Demand shall be 8-9% year on year till 2015

StimulatingDemandinDomesticSector
Vision2015ofGovt.ofIndia
3.Rajiv GandhiGramin LPGVitaran (LowCostRuralDistributionModel): ShallimprovereachofLPG Alowcostmodelofdistribution sustainableforclusterofvillages havingabout4500families ExpectedRefillSales:600cylinders of14.2kgpermonth
LPG Sales Volume in Domestic Sector shall reach 16MMT by 2015

StimulatingDemandThrough
GovernmentofIndiaPolicies
FocusonRuralAreastoincreasepurchasingpowerofruralfolks

Directsubsidytofarmers ExtensionofDebtwaiver Allocation under NREGA increased (NREGANational Rural

EmploymentGuaranteeAct)

AutomotiveSector:EfficientandCleanerRoadTransport

EuroIVStandards CNGforallpublictransport Auto LPG: Encouraging consumers to switch from conventional

fuelstocleanalternativessuchasLPG

IndustrialSector

Sectoral Initiatives taken by Govt. of India and OMCs for

ConversiontoLPGfromliquidFuels Stricterpollutioncontrolnormspropagatinguseofefficientfuels

OverviewofPresentation
Indian LPG Scenario LPG Market Prospects
Potential in Rural India Transport Sector Industrial Sector

Stimulating Demand Through

Vision 2015 of MOP&NG Government Policies and Schemes

LPG Demand Outlook Way Forward

LPGDemandOutlook
2011-12 LPG Demand Projected growth Refineries Fractionators RIL Essar Total Prodn. Import Required 14920 8% 5963 2112 2500 800 11375 3545 2012-13 16140 8.1% 6903 2112 2000 800 11815 4325 2013-14 17418 7.9% 7033 2112 2000 2000 13145 4273 2014-15 18680 7.3% 7513 2112 2000 2000 13625 5055
AllFiguresinTMT

Indigenous production

OverviewofPresentation
Indian LPG Scenario LPG Market Prospects
Potential in Rural India Industrial Sector Transport Sector

Stimulating Demand Through

Vision 2015 of MOP&NG Government Policies and Schemes

LPG Demand Outlook Way Forward

InfrastructurePlan

S.No

Infrastructure

Capacity in TMT
2009-10 2014-15 6500

Project Investment
USD Million 220 532

1 2 3 4

Import Handling Terminals Pipelines Capacity Tankage (Storage Capacity) Bottling Capacity

4700

685 12097

912 18037

700 450

FocusonInfrastructure
Jalandhar

Bhatinda
Panipat Gurgaon Ajmer Delhi Loni Kanpur Guwahati

ExistingPipelines ProposedPipelines ExistingRefinery ProposedRefinery

Kandla
Jamnagar Hazira Mumbai High

Bina

Barauni Durgapur

Haldia
Mumbai Secunderabad Chakan Paradip

PROPOSEDPIPELINES ProposedPipelines Length NEWIMPORTTERMINALS Cost

USD LOCATION Capacity CostUSD Paradip Haldia Budge 673km 202M Ennore 600TMTPA 90M Budge Kalyani Durgapur Ennore Chenglepet 600TMTPA 382km 70M 115M JNPT Pondy Trichy Kochi 600TMTPA 60m Mangalore Bangalore 376km 110M Mumbai Uran Chakan 166km 105M

JNPT Mangalore

Vizag

Vijayawada Bangalore Chennai

Ennore Kochi
Trichy

NewInitiatives
Commissioned Worlds Largest Flex SpeedCarouselatoneofbottlingplants ofStateownedcompany(HPCL) Use of Anti Pilferage Device in LPG Cylinders Integration of LPG & SKO distribution with Govt. of Indias Unique IdentificationProject(UIDAI) IVRS/SMS based Refill Booking System forLPGCustomers EOIforCompositeCylinders Exploring possibilities of Earning Carbon Credits
ProjectAadhaar UIDAI AntiPilferageDevice

AudioVisual(AV) onVision2015andInitiativestakenbyOMCs

ThankYou