April 28, 2006 Gas-Demand & Supply, Market & Infrastructure

Agenda Hydrocarbon Demand Demand Projections through 2030 Supply Projections Issues for discussion

April 28, 2006 Page 3 PetroFed : Gas Demand & Supply, Market and Infrastructure PricewaterhouseCoopers Coal was the primary source of commercial energy and diesel was the highest consumed refined fuel in % 8% 46% 3% 4% CoalPoL (Incl RBF) Lignite Natural Gas Others Hydrocarbon Demand % 7% 6% 9% 2% 9% 2% 7% 6% 18% HSD & LDO LPG Kerosene Petrol Naphtha ATF LSHS &FO Bitumen Others RBF NG Commercial Energy (333 MMTOE) POL and Gas (158 MMTOE) Source : MoPNG, PwC Analysis

CAGR (%)4%4.5%5%5.5%6%6.5%7%7.5%8%8.5%9% Multiple April 28, 2006 Page 4 PetroFed : Gas Demand & Supply, Market and Infrastructure PricewaterhouseCoopers Natural Gas consumption is expected to grow by 6.9 per cent and POL* demand by 4.5 per cent in 2030 under 6% economic growth scenario 9.1% 6.0% 6.9% 4.5% 0%1%2%3%4%5%6%7%8%9%10% NG + NG equivalent of Naphtha POL excl. Naphtha CAGR 6%CAGR 8% Demand Projections through 2030 * Excluding Naphtha

AnalysisBasisGas, in BCM (mmscmd) PetroFed (PwC- IRADe) GDP Growth : BAU – 6%, HOG 8%BAUHOGBAUHOG 130 (356)243 (665)181 (496)406 (1,112) India Vision 2020 POL Growth 5% - BAU Gas – as per sectoral growth BAUBCS 71 (195)65 (178) Hydrocarbon Vision 2025 GDP : Base Case 6.5%, High Growth Case 7.7% in X Plan & 8.1% thereafter, Pessimistic 5%. All cases weighted averaged on probability. Oil elasticity (392) IEA WEO 2002GDP Growth – 4.6%83 (227)108 (296) April 28, 2006 Page 5 PetroFed : Gas Demand & Supply, Market and Infrastructure PricewaterhouseCoopers India has proven market for gas. The demand is expected to be growing almost 10 times in next 2 ½ decades. Demand Projections through 2030 Demand projections are based on different assumptions meant to build scenarios and deploy different methodologies.

RIL Gas Availability (out of 40 MMSCMD) ConsumerQuantityStatus NTPC Kawas/Gandhar 12 mmscmdYet to Contract Dadri13.5 mmscmdYet to Contract KRIBHCO2.5 mmscmdYet to Contract Balance …12 mmscmd LNG Projects Status ProjectCapacityStatus PLL Dahej5 MTPAGas Supply started Apr ’04 Shell/Total2.5 MTPACommissioned Apr ‘05 PLL Dahej (Exp’n)7.5 MTPABy PLL Kochi2.5 MTPAExpected by Dabhol2.9 MTPABeing revived IOC Ennore5 MTPAUnder planning Transnational Pipelines SourceStatus/Constraints Myanmar Tripartite agreement (Bangladesh, Myanmar & India) signed Access rights to Nepal an issue Sub-sea or overland pipeline options Economic viability to be ascertained Iran India-Pak signed agreement in June 2005 Tech & Financial consultants appointed by India Iran & Libya Act of 1996 (ILSA) – USA China – no concrete exchanges LNG Sources Secured ProjectQuantityMethodSource PLL Dahej7.5 MTPA25 Year ContractQatar (Price renegotiation 2009) IOC5 MTPALong TermIran Shell/Total2.5 MTPASpot MarketSubject to price and availability April 28, 2006 Page 6 PetroFed : Gas Demand & Supply, Market and Infrastructure PricewaterhouseCoopers The current envisaged sources of supply fail to meet the burgeoning gas demand. Supply Projections

April 28, 2006 Page 7 PetroFed : Gas Demand & Supply, Market and Infrastructure PricewaterhouseCoopers Supply Projections Source : CRIS INFAC, Natural Gas Annual Review 2005 Sources fell short of demand forcing users to resort to liquid and solid fuels. Supply plans are getting deferred DemandSupply

April 28, 2006 Page 8 PetroFed : Gas Demand & Supply, Market and Infrastructure PricewaterhouseCoopers This roundtable would address to finer industry issues Issues Exclusivity to Markets for Developers? Exclusivity for Marketing gas in a geographical limit? Gas as Essential Commodity? Rules and Policies before Regulator is appointed? How does industry bridge gap of price and ability to pay? ……………………………………… Experience of Japan, South Korea, Thailand, and Malaysia shows that gas use thrives where governments pursue active, credible, and market-oriented policies to promote development. Gas is a very infrastructure intensive business with high transportation costs which makes government policies extremely important in getting gas markets established and growing. Moreover, promoting natural gas use in power generation requires domestic electricity prices that justify long-term natural gas purchase contracts. Reasonably transparent and flexible regulatory systems are also extremely important.