Annual Report - 2005-06 - GAIL (India)

ENERGY SECURITY
The Government of India, as part of
its policy initiatives, has taken several
measures to boost the Indian economy. The
GDP is poised to grow at around 8%, which
is expected to increase the demand for
energy to attain higher levels of industrial
activities. Oil and gas would continue to
play an important role in the development
of Indian economy. Towards this end, the
Government of India is working on an
“Energy Security” plan to meet the long
term energy requirements of the nation.
In order to achieve energy security,
MoP&NG has worked out a long term
strategy in the petroleum sector, on the
following lines:
• accelerated E&P activities within the
country under NELP policy, to attract
investment and latest technology from
global and local E&P players
• participation by Indian Companies in
the E&P activities of other countries
• enter into long term contract for
gas supplies from Iran, Oman, Qatar,
Myanmar through cross-border
pipeline or LNG imports
• deregulation and opening up of the oil
and gas sector.
The global crude oil markets remained highly
volatile throughout the year, with prices ranging
from 48 to 67 US$/barrel. Further the crude price
has gone beyond US$70/barrel in the month
April 2006. The gas price also moved to new
highs, in tandem with the oil price, setting higher
benchmarks.
However, the news on domestic gas front was
encouraging as more E&P players have struck rich
gas reserves in KG Basin (AP). The oil and gas finds
in Mahanadi-NEC, Rajasthan, Tripura and Myanmar
were of significant importance. The gas is likely to
be available from the new finds after another 2-3
years time.
JAMNAGAR
HAZIRA
MUMBAI
DABHOL
MATHANIA
DAHEJ
BHATINDA
PUNE
INTER-STATE GAS GRID DEVELOPMENT PLAN
KOTA
DELHI
AURAIYA
VIJAIPUR
HYDERABAD
RAICHUR
BAREILLY
NEPAL
JAGDISHPUR
PHOOLPUR
BOKARO
VIZAG
KAKINADA
OPPORTUNITIES IN NATURAL
GAS TRANSMISSION
Your Company is the market leader in
the field of transmission, distributing
~80% of the entire gas available
and owning a pipeline network
of about 5600 Kms. To expand its
infrastructure, your Company has
already conceptualized the blue print
of an Inter-State Gas Grid to provide
connectivity to various gas sources and
geographically dispersed markets.
The Grid has been conceptualized to
enable gas shippers to pump gas at
any point in the main grid and take
delivery from any point in the grid,
thereby providing an optimal and
economical solution for cross country
transportation in India.
GAYA
GANGTOK
KOLKATA
HALDIA
BHUBANESHAR
BHUTAN
BANGLADESH
AGARTALA
ITANAGAR
DISPUR
SHILLONG
MYANMAR
WEST BENGAL
OFFSHORE
AIZWAL
A1 BLOCK,
MYANMAR
(Million tonnes)
Your Company is also actively focusing
on innovative gas transportation
technologies such as CNG by ships for
bulk transportation and modular LNG
and CNG transportation technologies
by trucks and transportation of gas as
natural gas hydrates, particularly from
stranded sources to gas consumers.
LPG – DOMESTIC MARKET OVERVIEW
LPG currently commands a significant
position amongst all fuels for domestic
consumption in the country. Due to
this primacy the industry has been
regulated in terms of retail prices.
12
10
8
6
4
2
0
3.5
2.9
3.9
3.3
1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
Source : Oil Industry
For the next few years LPG Demand is
expected to be driven by increasing
penetration in rural market and
substitution of SKO as domestic fuel.
PSU refineries and fractionators
account for almost 69% of LPG
production and LPG marketing is
entirely dominated by PSU Companies
with almost 96% of the total market
share.
4.3
3.4
Production- Consumption Trends of LPG in India
4.8
3.5
5.4
3.7
There is a substantial gap in the LPG Demand
– Supply in the country. The gap in consumption
and domestic production is currently being met by
imports.
Domestic use of LPG accounts for 92% of total
consumption while remaining 8% is accounted for
by commercial and industrial uses. Currently, there
are ~85 million customers for LPG, of which ~70
million are urban customers, thus rural area poses
as a lucrative market for LPG penetration.
6.4
4.7
7.0
6.3
7.7
7.2
Consumption
8.5
7.5
Production
PETROCHEMICALS INDUSTRY – AN OVERVIEW
Domestic Polyethylene Production Capacity
GAIL
18%
9.5
7.9
10.3
8.0
Domestic Market Share Polyethylene
GAIL
19%
GADAG
NELLORE
MANGLORE
HASAN
BANGLORE
CHENNAI
Existing Lines
COIMBATORE
Proposed Gas Grid Pipelines
KOCHI
TUTICORIN
* Map not to scale
Others
82%
Others
81%
42 Winning Momentum 43