1. GSPC GAS COMPANY LIMITED
Assocham -11th Energy Summit Indian Oil & Gas Sector
City Gas distribution - Opportunities & Challenges
PPG SARMA, CEO
GSPC GAS COMPANY LIMITED
17 th Oct 2008

2. Natural Gas Supply & Demand Outlook MMSCMD
SUPPLY
DEMAND
Domestic Gas 85 74
New local sources
120
R-LNG 32 60
Total (MMSCMD)
117
179
254
288

3. TRANSMISSION INFRASTRUCTURE
Under Operation:
GAIL: HVJ pipeline, Dahej-Vijapur pipeline, Dahej-Uran pipeline.
GSPL: intra-Gujarat transmission network
Under construction: ( Completion in 2008)
Reliance: 48” East-West pipeline
GSPL’s 30 “ Bharuch to Jamnagar pipeline
Under Planning / Approvals:
Kakinada to Tamilnadu,
Kakinada to West Bengal
Dabhol to Bangalore

4. City Gas Infrastructure
Limited development of CGD networks
CGD’s in operation :
- In New Delhi (M/s Indraprastha Gas Ltd)
- Surat, Ankleshwar, Bharuch in Gujarat (M/s Gujarat Gas Co.)
- Mumbai, Maharastra (M./s Mahanagar Gas Limited)
- Upper Assam (M/s Assam Gas Company Ltd.);
- Vadodara, Gujarat (M/s Vadodara Municipal Corporation); etc.
New players like M/s Adani Energy Ltd., M/s Sabarmati Gas Limited & M/s GSPC Gas Company Ltd., and GAIL& OMC JV’s
Daily Sales Volumes: 8.5 MMSCMD +
The combined distribution network length of 8000 Kms.
Domestic customer base 600,000 +
CNG customer base is to the tune of 400,000.( 5th in the world)
CNG Stations: 400+

5. KEY TRENDS Acceptance of NG as a viable alternative to liquid fuels
NG share in the energy basket set to increase (Presently about 8.5%)
CGD players have the market relying heavily on APM gas and support of judiciary
Couple of CGD players relying entirely on market driven gas pricing and still succeeded
Market driven prices and high R-LNG prices finding buyers in the market
CGD sector likely to get some priority in the soon to be announced “ Gas Utilization Policy”

6. OPPORTUNITIES Accelerated development of transmission networks
Improving Gas supply position in Indian markets due to local new finds.
Accelerated development of transmission networks
The enactment of PNGRB ACT 2006 is a welcome sign to look at authorizing the entities to develop city gas networks
Standardization in terms of quality, safety & standards of services.
Huge Potential for employment generation
Industry growth ,development incl. equipment suppliers ,vendors , contractors

7. ISSUES & CHALLENGES CGD Industry: CGD Operator:
Gas sourcing: To compete with bulk consumers power /Fertilizer
Availability of Trained & experienced manpower
Absence of formal certification and licensing of contractors
Low awareness in the general public about Piped Gas
CGD Operator:
Ensuring multiple gas sourcing options for flexibility in supplies / redundancy
Ensuring proper safety distance from the building & premises at all locations in congested cities / towns.
Contd….

8. Awareness creation amongst the customers/ general public
Contd…
Effective coordination with local municipal authorities & utilities
Awareness creation amongst the customers/ general public
Inexperienced contractors/ Unauthorized extension of pipelines
Effective monitoring of emergency control room activities to quickly address any potential damages to the networks & thereby reducing its potential side effects
Use of non standard equipments, cylinders (CNG) by customers

9. Challenges for PNGR Board
Ensure proper facilitation for market creation stage leading to market take off stage and further to market maturity stage
Clear cut policy framework & accelerated approval process for pipeline infrastructure creation .
To ensure formulation of codes/ standards and making use of these standards mandatory for all Pipeline/CGD players.
Put in place a level playing field & robust monitoring mechanism post authorization of entities

10. ROLE for Regional Boards
Adopt a proactive role in coordination with municipal authorities & all utilities
Continuous awareness creation amongst the customers/ general public.
Facilitate setting up Technical institutes/collages for courses in “gas engineering “, training institutes offering certified courses.
Develop framework for contractor certification
Issue of licenses to local contractors and their manpower for undertaking the gas installation related works in the customer premises to ensure consistency of output.

11. Challenges for Local Municipal Corporations
Assessment of Operating company’s Emergency preparedness ( Mock drills offsite/onsite etc)
Oversee safety aspects for operating city gas networks.
Properly planned utility corridors
Strict enforcement of safe distances for networks from the population
Speedy permission/ approval process networks /CNG stations.
RTO’s to enforce surprise checks to identify CNG leakages on the vehicles on roads.

12. CUSTOMER EXPECTATIONS
Comparable/affordable gas prices vis a vis liquid fuels
Stability of Gas Prices
Uninterrupted gas supplies.
Fast response times in case of emergencies
Quality of service

13. NEW PRODUCT TECHNOLOGIES/TRENDS
De-centralized power generation
De- centralized energy consumption.
co-generation,
combined heat& Power (CHP),
combined cooling ,heat& Power (CCHP)
Focus on Maximum use of available Heat of Gas molecules

14. GSPC Group Presence across entire Value chain
Turnover > Rs Cr
Upstream
Downstream
GSPC
GSPL
GSPC Gas/SGL
GSEG
E&P
Trading
Transportation
Marketing
Distribution
Power
Plans for Expansion of downstream interests into other states

15. GSPC Acquiring exploration blocks
Only State PSU in Oil & Gas E&P
Dominant player in E&P sector
Acquiring exploration blocks
Strategic alliances for sourcing of gas
Interests in various National & International exploratory blocks
Andhra Pradesh, Gujarat, Mumbai, Assam, Tamil Nadu
Australia, Egypt and Yemen
Successful bidder in NELP II, III, IV and V
Various discoveries made so far including
One of India’s largest gas discovery in KG Basin
Others : PK – 2, Tarapur, Sanand East Block

16. Pure Transmission Play
GSPL GAS GRID – A growth story
Presence in 12 Districts.
Pure Transmission Play
Handles 20 MMSCMD

17. 23 CNG stations,
Domestic, indl. Customers
1.50 MMSCMD flows

18. FUTURE OUTLOOK
Major transmission projects in execution /on drawing board stage
Huge supply augmentation through KG basin gas and RLNG terminals,
More & more CGD networks through existing as well as new players

19. CONCLUSION
Indian market is a key opportunity for players interested in distribution.
Issues and challenges regards to safe operation needs to be tackled.
Huge employment /Ancillary development opportunity
There is huge business space to accommodate multiple players
GSPC Group would continue to play a very active role in the entire value chain in Gujarat as well as other states in India

20. THANK YOU VERY MUCH FOR YOUR KIND ATTENTION.
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