The document summarizes the future potential for LNG terminals in the Indian subcontinent. It finds that natural gas demand is expected to outpace domestic production in India, Pakistan, Bangladesh and Sri Lanka. This will create opportunities for LNG imports to meet the increasing gas demand. The document outlines existing and planned LNG import capacity in each country and estimates a total subcontinent shortfall of natural gas that LNG can help address.

1. 3rd Asia Energy Security Summit 2013
Future Potential for LNG Terminals in
the Indian Sub-Continent
Presented by
Proshanto Banerjee
Bangkok
February 28, 2013

2. Presentation Overview
― Why Natural Gas
― Current demand and production of natural gas in the Indian sub-
continent
― Future demand and production of natural gas in the Indian sub-
continent
― LNG and domestic gas pricing
― LNG Import capacity in the Indian sub-continent
― Near to mid term strategy for LNG import

3. Primary energy profile of the Indian sub
continent
600
Oil Natural gas Coal
500
Nuclear energy Hydro electricity Renewables
400
MTOE
300
200
100
0
India Pakistan Bangladesh Sri Lanka
Source : BP Statistical Review 2011

4. Natural gas has emerged as a preferred
source of energy
― Clean fuel with lesser environment impact
― Abundantly available in recoverable form
― Affordable compared to crude oil based products
― Proven technological advancements
― Globalization of trade

5. Consumption of Natural Gas in the Indian
sub continent in 2011
70
61.1
60
50
39.2
40
BCM
30
19.9
20
10
0
0
India Pakistan Bangladesh Sri Lanka
Source : BP Statistical Review 2011

6. Production of Natural Gas in the Indian
sub continent in 2011
80
69.15
70 Domestic Supply Demand
60 54.88
50 46.1
39.2
BCM
40
29.85
30
19.9
20
10
0 1.5
0
India Pakistan Bangladesh Sri Lanka
Source : BP Statistical Review 2011

7. Demand – Supply scenario of Natural Gas in
Bangladesh
90
Demand Production 82 MMSCMD
80
70 Window of
Opportunity for LNG
MMSCMD
Import - 11 MTPA
60
50
49.2 MMSCMD
40
30

8. Demand – Supply scenario of Natural Gas in
Pakistan
300
273 MMSCMD
Demand Production
250
200
Window of Opportunity for
LNG Import - 58 MMTPA
MMSCMD
150
100
50 63 MMSCMD
0

9. Demand – Supply scenario of Natural Gas in
Sri Lanka
16
Production Demand
14 MMSCMD
14
12
MMSCMD
Window of Opportunity
10 for LNG Import - 2.5
MMTPA
8
6
5 MMSCMD
4
2
0

10. Demand – Supply scenario of Natural Gas in
India
600 550 MMSCMD
Demand Production
500
Window of
Opportunity for LNG
400 Import - 80 MMTPA
MMSCMD
300
260 MMSCMD
200
100
0
Note: Planning Commission of India envisage 70 MMTPA LNG imports by 2022

11. Demand of Natural Gas in the Indian sub
continent by 2030
140
120
100
80
BCM
60
40
20
0
India Pakistan Bangladesh Sri Lanka Estimated Sub
Continent
Shortfall
Estimated Gas Demand Anticipated Domestic Production
Source : Various State Agencies

12. Demand of Natural Gas in the Indian sub
continent is unlikely to be fully realized
Lack of adequate reserves
— Lack of a market pricing mechanism
— Lack of market reforms in major end consumer
sector
— Lack of transportation and distribution network
— Uneven policy and taxation structure
LNG appears to be an immediate solution to meet the increasing
gas demand

13. Global LNG liquefaction capacity
Expected to reach a minimum of 70 MMTPA
between 2012-15
400
350
300
250
MTPA
200
150
100
50
0
2000
2001
2002
2003
2004
2005
2009
2010
2011
2012
2013
2014
2006
2007
2008
2015
APAC Africa Middle East America Europe

14. Post 2015 - Large capacity additions expected
from North America subject to export
permission in the next two years
EIA Scenarios for US Gas Exports

15. Proposed and Potential LNG Export Projects in
North America
• Given the number of projects
that are currently applying for
export license, the prospects of
LNG export from North America
appear to be strong
• Export license to non-FTA
countries is critical for viability
of US export projects
• Expected US LNG exports by
2020 are 70 mmtpa, in addition
20-30 mmtpa of LNG exports
could come from Canada

16. Huge arbitrage opportunity exists between
Henry Hub and JCC linked pricing
15
Japan European UK US Canada
12
~ $ 11/MMBtu
9
$/MMBtu
6
3
0
1992
1984
1985
1986
1987
1988
1989
1990
1991
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Source : BP Statistical Review 2012

17. Future Outlook – Gas index/LNG Prices
20
Crude Oil Parity Price (JCC)
18
20 20
20
20
PLL Qatar (12.7 % JCC)
20
16 Crude Oil Parity Price (JCC)
Crude Oil Parity Price (JCC)
18 18 PLL Gorgon(14.5 Price (JCC)
Crude Oil Parity % JCC )
18
18
18
14 PLL Qatar (12.7 % JCC)
20 PLL Qatar (12.7 % JCC)
PLL Qatar (12.7 % JCC)
16 16 Sellerscomfortable(14.85% % JCC)
Willingness (14.85
Seller Oil Parity Price (JCC)
16
16
$/ MMBtu$/ MMBtu MMBtu
16
12 Crude
JCC)Gorgon(14.5 % JCC )
PLL
PLL Gorgon(14.5 % JCC ))
18 PLL Gorgon(14.5 % JCC
Cheniere LNG Deal (Henry Hub
14 14
14
14
14
10 PLL Qatar (12.7 % JCC)
Plus) Willingness (14.85%
Sellers
$/ MMBtu $/
16 Sellers Willingness (14.85% JCC)
JCC) Willingness (14.85%
Sellers
$/ MMBtu
NBP Index (UK)
$/ MMBtu
12 12
$/ MMBtu
12
12
12 JCC)
JCC)
PLL Gorgon(14.5 % JCC )
8 Cheniere LNG Deal (Henry Hub
14 Cheniere LNG Deal (Henry Hub Plus)
10 10 Henry HubLNG Deal (Henry Hub
Cheniere Index
Plus)
10
10
10 Plus) Willingness (14.85%
Plus)
Sellers
6 NBP Index (UK)
12 JCC) Index (UK)
NBP Index (UK)
NBP
8 8
88
8 Cheniere LNG Deal (Henry Hub
4 Henry Hub Index
10 Plus) Hub Index
Henry Hub Index
Henry
6 6
66
6 NBP Index (UK)
2
8
4 4
4 4 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
4 Henry Hub Index
6
2 2
22
2
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2012 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
4 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
2
2012 2013 2014 and other Public Sources 2019 2020 2021 2022 2023 2024 2025
Source: WEO 2011 2015 2016 2017 2018
Long term LNG prices are expected to mostly depend on Oil indexation and HH Prices

18. Current domestic price of Natural Gas in the
Indian sub continent
4.4
4.2
4.2
4
3.8
MMBTU
3.6
3.4
3.2 3.37
3.06
3
India Pakistan Bangladesh

19. Current average delivered LNG Prices to India
21
18 17.01
MMBTU
15
17.77
16.19
12
9.83
9
Australia North America Qatar Russia

20. LNG import scenario in the Indian sub continent
60
50
Capacity (MMTPA)
40
India
30
20
10
0
Existing Under Construction Planned
(3 Terminals) (1 Terminal) ( 15 Terminals)

21. LNG import plan of Bangladesh
• The Government plans to build an LNG
import terminal at Moheshkhali
Island with a capacity of 5 MMTPA
• Signed MoU to import 4 MMTPA from
Qatar Petroleum in January 2011
• Three bidders short listed to develop
an FSRU based import terminal but no
headway so far
• Recently, the government re-
scheduled its target and is in the
process of re-tendering or re-
negotiating with the short-listed firms

22. LNG import plan of Pakistan (1/2)
• Pakistan’s first LNG policy was
introduced in 2006 with private sector
participation and without the
Government’s physical or financial
support
• The Government committed to support
the projects, if needed, to secure long
term LNG supplies but no guarantee
was offered
• However, the private sector showed
little enthusiasm for a highly capital
intensive and risk prone business
• As a result the government initiated its
own parallel LNG import project albeit
through Government entity under the
name Pakistan Mashal LNG Project
(PMLP) in 2005-06

23. LNG import plan of Pakistan (2/2)
• In 2010, the contract for terminal development was awarded
to 4GasAsia whereas GDF-Suez was awarded the LNG supply
contract. However due to various issues, the project came to a
standstill
• Recently, Pakistan has been considering to import LNG from
Qatar via India
• India will receive LNG at one of its west coast terminals and
supply gas through a planned pipeline to Pakistan’s border
• India has offered to supply 200 million cubic feet per day
(mmcfd) of LNG for a period of five years
• India plans to expand its natural gas pipeline network across
the border. It has already laid a 100 km pipeline to Bhatinda,
from where the pipeline will be extended to Wagah bordering
with Pakistan

24. LNG import plan of Sri Lanka
• In response to a call for
proposals in 2001, the
government of Sri Lanka
received several proposals
for the construction of LNG
terminals. However, nothing
was heard of these proposals
thereafter
• The Ministry of Power and
Energy had made a previous
attempt to obtain LNG from
• A terminal of 1.7 MMTPA Iran and an exchange of
capacity was planned to be delegations had also taken
located in Kandana by Lanka place
Transformer Ltd.

25. Conditions evolving for increased near term
availability of LNG for India
• Increasing LNG affordability to create interest amongst
suppliers
– LNG will flow to India where prices are sufficient and
quantities can support the necessary infrastructure
• Indian LNG import depends on the amount of demand that
can accept international market prices
• Three views of LNG import levels
– Assume only current and developing projects
– Assume a substantial expansion of LNG capacity
– Plants operate at 70% load factor

26. Around 21 MMTPA of LNG import capacity is
available by 2013
Capacity
Operating Terminals Location (MMTPA) Start Date
Petronet LNG Dahej I 5 2004
Shell Hazira 3.6 2005
Petronet LNG Dahej II 5 2009
GAIL Dabhol 5 2011
Total Operating Capacity 18.6
Terminals Capacity
Under Construction Location (MMTPA) Start Date
Petronet LNG Kochi 2.5 2012-13
Total Under Construction Capacity 2.5

27. 41 MMTPA of LNG import capacity is in the
planning stage
Capacity
Planned Terminals Location (MMTPA) Start Date
GSPC - Adani Mundra 5 2016-18
Swan Energy Pipavav 3 2016-19
H-Energy Jaigarh 8 2016-17
IOCL Ennore 5 2016-18
Petronet LNG Gangavaram 5 2017-18
GAIL Kakinada 3 2016-18
Shell Kakinada 3 2016-18
IOCL Dhamra 5 2017-18
H- Energy Offshore Digha 4 2016-17
Total Planned Capacity 41
India’s total LNG import capacity by 2019 – 62.1 MMTPA

28. Planned LNG Import Terminals in India
Petronet LNG – Dahej
Shell – Hazira
GAIL – Dabhol
GSPC – Mundra
Swan Energy – Pipavav
H-Energy – Jaigarh
Petronet LNG – Kochi
IOCL – Ennore
Petronet LNG – Gangavaram
GAIL – Kakinada
IOCL - Dhamra
H-Energy – Offshore Digha

29. India can provide an immediate solution to
Pakistan and Bangladesh’s rising gas shortages
• Despite all the hurdles and a multitude of various policy
initiatives, imports of LNG are expected to be the only path
forward for the energy security of Pakistan and Bangladesh in
the near to medium term
• In the next 3 to 4 years, LNG must be available in these
countries to meet the expected gas shortage
• The Indian sub continent could learn a lot from the European
and US - Canada examples of sharing infrastructure,
economics and mitigating risks
• For the short term , India can be treated as an LNG importing
hub and regasified LNG can be supplied to Bangladesh and
Pakistan through onshore pipelines extending across borders

30. The Indian sub continent could emerge as the
next importing hub since………
• Additional gas from domestic supply in near term is unlikely
• There is significant demand to support LNG price
• Increasing demand – supply gap can be compensated only
through LNG imports but:
⁻ Quantum of LNG imports will depend on the volume of demand
that can accept international market prices
⁻ Price should be right (especially from Power and Fertilizer
industries) to attract LNG players
⁻ LNG infrastructure building needs to continue
• An integrated LNG souring approach can put the Indian sub-
continent players in the commanding position while negotiating
the contracts and risks related to market forces

31. Thank You
For any Information please contact
Proshanto Banerjee
at
proshanto.banerjee@gmail.com
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