1. Natural Gas Business Line 1

2. Strategies- NG Business Line Consolidation of CNG Marketing through our existing Retail network HPCL’s Participation in CGD Network bidding process instituted by PNGRB Strengthening of existing CNG business of AGL, BGL and conversion to CGD network in Hyderabad, Vijayawada, Indore and Gwalior 2

3. CNG Marketing through Retail Network CNG Sales FY 08-09 (PSU)-IPR HPCLBPCLIOCLIndustry Vol (TMT)122151100373 Historical11613981335 % Growth5.78.624.111.3 % Mkt Share32.7340.4426.83 Hist34.4841.4524.08 CNG Sales- Mumbai Retail Region FY 08-09 HPCLBPCLIOCLMGLIndustry Vol (TMT)88764146251 Historical90764137243 % Growth-2.10024.22.9 % Mkt Share35.130.316.318.3 Hist37.230.417.115.3 3

4. CNG Marketing through Retail Network In IPR CNG sales for private operators like IGL,MGL,MNGL, GGL, GSPC Gas, AEL etc do not appear. Mumbai Retail RO is following the practice of sending MIS report to Retail SBU,HQO highlighting CNG sales for both PSU and private operators. Delhi, Ahmedabad, Vadodara, Lucknow, Pune, Hyderabad, Vijayawada Retail ROs to start similar exercise for generating monthly MIS on CNG sales. 4

5. CNG Marketing through Retail Network As of 31/03/09 no of CNG Stations HPC BPC IOC 101 107 90 As of 31/05/09 no of CNG Stations HPC BPC IOC 112 122 91 Addition of CNG Station for HPCL during April-May 09 Ahmedabad RO 5 Vadodara RO 4 All 10 Nos. with GSPC Gas. Rajkot RO 1 5

6. CNG Marketing through Retail Network Most of the CGD companies not having retail network infrastructure. Dependency of CGD companies on PSU’s retail network. Maximize CNG addition at our retail outlets to capitalize revenue earning from other CGD companies. CGD companies offer different margin ranging from Rs 1.00/kg to Rs 1.40/kg. 6 MGLGSPC Gas HPCLRs 0.57/KgRs 0.47/Kg DealerRs 0.83/KgRs 0.53/Kg TotalRs 1.40/KgRs 1.00/Kg

7. CNG Marketing through Retail Network In addition CGD companies bear electricity charges for gas compression on actual basis. Installation of Compressor, Dispenser, Cascade by CGD companies. Civil work for foundations for compressor, dispenser, cascade and tube trench etc by HPCL. Depending up on the layout of retail outlet our cost involvement is limited to only Rs 5-8lacs/outlet. 7

8. CNG Marketing through Retail Network HPC to ensure identification of outlet suitable for CNG addition and applying for explosive license. Target for CNG addition in FY 09-10 – 100 more outlets To achieve 40% market share amongst PSUs. 8

9. Plan for CGD Network City Gas Distribution Network (CGD) implies supply of :- PNG to domestic sector CNG to transportation sector PNG to commercial sector Industrial gas to Industries 9

10. Background As per GOI notification of Petroleum and Natural Gas Regulatory Board Act, 2006 ( 19 of 2006) PNGRB came into existence w.e.f 01.10.07 PNGRB authorization is mandatory for any corporate body to Lay, build, operate or to expand any City Gas Distribution (CGD) Network. CGD network shall be designed as per PNGRB technical standard and specifications, safety standards for supplying natural gas on a sustained basis. 10

11. Background Till date Petroleum Natural Gas Regulatory Board (PNGRB) has received approximately 75 EOI s from different entities for 69 geographical locations. 6 cities have been awarded in1 st round of bidding in March 2009. 11 Name of CitySuccessful Bidder MathuraDSM Infrastructure KakinadaBhagyanagar Gas Limited KotaGAIL Gas Limited MeerutGAIL Gas Limited SonepatGAIL Gas Limited DewasGAIL Gas Limited

12. Road Map for HPCL HPCL participated in 2 nd round of bidding followed by upcoming rounds also. In 2 nd round HPCL has submitted bid for Chandigarh Ghaziabad BGL has submitted bid for Rajahmundry 12

13. CGD Scenario in India No of CGD Companies : 18 No of towns : 40 Volume being handled : 12.93 MMSCMD or 9.1 TMT/Day Major Entities : IGL, MGL, Gujarat Gas, GSPC Gas, Adani Energy Limited, BGL, AGL 13

14. CGD Scenario in India CGD OperatorLocationCGD OperatorLocation Assam Gas Company LtdDuliajanBhagyanagar Gas LtdVijayada, Kakinada Tripura Natural Gas CompanyAgartalaGreen Gas Ltd, Lucknow Gujarat Gas Company LtdSuratCentral UP Gas LtdKanpur Baroda Municipal Corporation Ltd BarodaAvantika Gas LtdIndore Charotar Gas Sehkari Mandali Limited GujaratGujarat Gas Co LtdGujarat Great Eastern Energy Corporation Ltd AsansolAdani Energy LtdAhmedabad Mahanagar Gas Ltd (MGL)MumbaiSabarmati Gas LtdGandhinagr Maharashtra Natural Gas Company Ltd PuneGreater Gas Supply Corporation Ltd (Coal Gas) Kolkata Indraprastha Gas Ltd (IGL)DelhiHaryana City Gas LimitedGurgaon 14

15. Economics of CGD Project Economic life of each CGD project : 25 Years Expenditure for each CGD Project : 100 Cr to 500 Cr depending upon size of city Expenditure profile : 70% by first 5 years 30% after 5 th year IRR for Project : 14% 15

16. Challenges in CGD Bidding Process is highly confidential & dynamic in nature Time bound decision is required. Bidding Strategy can vary from city to city. Intense competition is expected for high potential cities. 16

17. Range of Bid Parameters Basis of PNGRB evaluation of bid parameters 1.Lowness of NPV of Transmission Tariff (TT) for 25 years 2.Lowness of NPV of Compression Charges (CC)for 25 years 3.Highness of NPV of Inch-Dia Kms of steel pipeline in 1 st 5 years 4. Highness of NPV of domestic connection in 1 st 5 years

18. Internal Process for Bid Submission Identify potential city basis demand assessment Preparation of DFR and Bid Strategy Obtain CFD clearance for submission of proposal to Investment Committee for its review of capex, opex and IRR. To obtain Board approval basis clearance of Investment Committee for capex, opex, IRR and range of bid parameters. Internal approval of Dir (M), Dir (F) and C&MD for final bids to be submitted to PNGRB 18

19. CGD bid submission by HPCL Complying with all internal process, Technical and Financial Bid submitted for Ghaziabad and Chandigarh to PNGRB on 25 th Jun 2009 Technical bids were opened on 25/06/09 itself. 19

20. CGD Network- Chandigarh Area : 727 Sq Kms Population: 10 Lacs Spread Area : Chandigarh UT, Mohali(P), Panchkulla (Ha), Solan (Hi) Major Domestic area: Chadigarh, Mohali, Panchkula, Zirakpur Major Industrial area: Baddi, Barotiwala, Nalagarh, Parwanoo, Mohali, Derabassi, Chandigarh I,II CGS: 1 st Dappar, 2 nd Bharatgarh. HVJ pipeline extension (Dadri-Bawana-Nangal segment) CNG Mother Stn : 2 + 1 Online Stn : 6 + 9 Online Bus Depot : 5 Daughter Booster Stn : 6 + 9 Length of Pipe Line : 151 km (14”, 12”, 10”, 8”, 6”, 4”) Inch Dia Kms : 1376.42

21. CGD Network- Ghaziabad Area : 217 Sq Kms Population: 10Lacs Spread Area: Ghaziabad Town Major Domestic area: Kaushambi, Vasundhara, Indirapuram, Rajendranagar Major Industrial area: Shahibabad, Mohan Nagar, Kavinagar, Bulandshahar Road Meerut Road CGS : Dasna HVJ pipeline Vijapur-Dadri-Bawana segment CNG Mother Stn :2 Online Stn : 10+1 Online Bus Depot : 2 Daughter Booster Stn : 2+4 Pipe Line Length :60Kms (18”, 12”, 8”, 6”) Inch Dia Kms : 632

22. Realizable Demand & Expenditure Profile 22 Realizable Estimated Demand in MMSCMD Capital Expenditure Profile-Cumu (in Rs Crores) Operating Expenditure Profile-Cumu (in Rs Crores) Year1 st 5 th 10 th 15 th 20 th 25 th Chandigarh0.27280.99601.35971.77102.31813.0487 Ghaziabad0.24971.08091.55442.05642.73113.5600 Year20142019202420292034 Chandigarh259.92346.55393.02433.01466.93 Ghaziabad169.30222.01240.28275.64293.71 Year20142019202420292034 Chandigarh80.5188.16322.97477.19656.00 Ghaziabad48.01118.61211.09318.79443.89

23. Status of 2 nd Round CGD Bidding 6 bids for Ghaziabad GAIL, IOC-Adani, HPC, GSPL, IGL & Siti Energy are the eligible bidders 4 bids for Chandigarh GAIL, IOC-Adani, HPC, GSPL are the eligible bidders Financial Bid will be opened within 30 days from opening of technical bid. 23

24. Thanks 24