Satisfying Enormous Growth Potential7th to 9th October-2009, Rio de Janerio, BrazilRural Demand In IndiaPresentation by:Apurva Chandra, Joint Secretary(Marketing)Ministry of Petroleum and Natural Gas, Government of India

LPG Market- Uniqueness of IndiaSecond largest packed LPG market in the world

LPG in cylinders, home delivered to more than 108 million households.

Customer population increasing by 6 million each year.

For better affordability product is subsidized.

For better logistics by packaging near to market, bottling plants even at remotest corners- At Leh highest altitude, At Andamans the island situated in Bay of Bengal.Deployed Latest Technology for Storage- Cavern

LPG- History & BackgroundLPG Marketing Commenced in India in 1955Started by Burmah Shell in MumbaiPublic Sector Oil Company , Indian Oil Commenced Operation of LPG Marketing in 1965 at Kolkatta and Patna

Product availability improved from 1998Customer strength grew from 20M to 100M in a decadeSales jumped from 1241TMT in 1985 to 11400 TMT in 2008Currently catering to more than 50% of Indian population.

Growth poised more towards rural marketsCustomer growth rate(in millions)1985-2009

Sales in TMT1985-2009

Various Products Marketed in LPGDomestic LPGPacked product in 14.2Kg, & 5kg cylinders, home delivered through distributorsNon Domestic LPGPacked product 19Kg and 47.5 kg delivered supply through distributors. Bulk Delivered to Storage Tanks of Customers- Business Associates to garner CustomersAuto LPGThrough Retail Outlets along with MS/Diesel and/or stand alone outletsShare of Products

Chart4

10302

572

258

200

2007-08

PACKED DOMESTIC91%

IND BULK2%

NON DOMESTIC5%

Sheet1

YEARPACKDNDNEIND. BULKAUTO LPGTOTAL

2004-059531118230109889

2005-069447283172779979

2006-07974242522813610531

2007-081030257225820011332

Sheet1

00000

00000

00000

00000

PACKD

NDNE

IND. BULK

AUTO LPG

TOTAL

YEAR

Sheet2

2007-08

PACKED10302

NDNE572

IND BULK258

AUTO LPG200

Sheet2

1110

0

0

0

#REF!

#REF!

#REF!

2007-08

Sheet3

0

0

0

0

2007-08

Domestic LPG Business OverviewTotal Customer Strength : 108 MAverage Enrolment (current) : 6 M YearlyDaily Bottling : 2.4 millionBottling Plants : 190Refineries, Gas Processing Plants & Imports

190 Bottling Plants

9382Distributors

108 million Customers

There is steady growth in LPG consumption in the last 4 years. (Figs. In TMT)

. LPG Marketing Overview Consumption Pattern - LPG

Chart2

10052105311133211778

2005-06

2006-07

2007-08

2008-09

10531(5.5%)

11332(7.6%)

11778(4%)

GROWTH OF LPG - DOMESTIC

YEAR2005-062006-072007-082008-09

Domestic LPG10052105311133211778

GROWTH OF LPG - DOMESTIC

Domestic LPG

GROWTH OF LPG NON DOME

YEAR2004-052005-062006-072007-08

Other than Domestic LPG3585327891030

GROWTH OF LPG NON DOME

0

0

0

0

Other than Domestic LPG

Trend of Other than Domestic LPG

SHARE OF LPG

2007-08

PACKED10302

NDNE572

IND BULK258

AUTO LPG200

SHARE OF LPG

0

0

0

0

2007-08

PACKED91%

NDNE5%

IND BULK2%

AUTO LPG2%

DEMAND

2004-052005-062006-072007-08

Demand10043100521053111333

Production7738764884098868.7

DEMAND

00

00

00

00

Demand

Production

FINANCIAL YEAR

DEMAND IN TMT

MODE TRANSPORT

LPG PIPELINE25

RAILWAY WAGONS12

ROAD MOVEMENTS63

MODE TRANSPORT

0

0

0

MODE OF TRANSPORTATION OF BULK LPG

LPG PIPELINE25%

RAILWAY WAGONS12%

ROAD MOVEMENTS63%

FUTURE PRODN DEMAND

PRODUCTIONDEMAND

2008-09887612078

2009-10867012802

2010-111035713571

2011-121112714385

FUTURE PRODN DEMAND

887612078

867012802

1035713571

1112714385

PRODUCTION

DEMAND

FINANCIAL YEAR

DEMAND IN TMT

Availability shareout

00

00

00

00

PRODUCTION

DEMAND

FINANCIAL YEAR

DEMAND IN TMT

BP CAPACITY

Actual Prodn. In TMT

PSU Refineries3855

Pvt. Refineries2892

Fractionators2122

Import2598

BP CAPACITY

0

0

0

0

Actual Prodn. In TMT

Availability Shareout (2007-08)

Import23%

Fractionators19%

PSU Refineries33%

Pvt. Refineries25%

Sheet5

CAPACITY (in TMTPA)NO. OF BPs

IOC570089

BPC291548

HPC323142

Sheet5

00

00

00

CAPACITY (in TMTPA)

NO. OF BPs

3231

2915

5700

MARKET SHARE

Tankage (TMT)

Prodn. Sources220

BPs266

Import Terminals162

MARKET SHARE

0

0

0

Tankage (TMT)

Import Terminals25%

BPs41%

Prodn. Sources34%

Actual Sale in TMT

IOC5464

BPC2999

HPC2871

0

0

0

Actual Sale in TMT

UrbanRuralPopulation wiseDivision- RuralDomestic LPG PenetrationUrban- Rural Population 14%83%3%

LPG Penetration- Issues in Rural Areas

Most of Rural Households natural biomass or kerosene

Biomass based fuels lead to health hazards and pollution

Use of Kerosene by the households at a subsidised rate.

Per Capita Income of rural areas- affordability

Viability of distribution cost as rural households are scattered.Potential Available in Rural Area- more than 50 million

Chart1

13

13

13

1.2

68

17

1.6

2030

Sheet1

mtoeFirewoodCrop ResidueCowdung CakeCoalKeroseneLPGOthers

20301313131.268171.6

Vision 2015- Govt.s Thrust on LPG in Rural Areas To enroll total of 55 m new LPG connections by 20158.5 million every yearMostly in Rural areasThrough existing distributors and Small Format DistributorsConversion of Kerosene customers

Strategies for Rural Market- PenetrationModels to improve reachThrough existing Distribution network By Expanding Existing model of Distributor Network Low Cost , Self Employment based LPG distributors as a viable modelCommunity Kitchen

Strategies to improve affordability Continue to give Favorable relative price Access Subsidization For economically Backward By State Governments Oil Marketing Companies- Corporate Social ResponsibilityConversion of Kerosene

Model based on Viability

Gramin LPG Vitrak (GLV) meaning Rural LPG Distributor

GLV sustainable for cluster of villages having about 4500 families. 40 % population villagers may go for LPG.

Scheme to improve Viability1800 consumers required for sale of 600 cylinders of 14.2 kg per month.Per Capita 5Kg per month Proprietor himself to operate with the help of 1 staffOption for part time jobSmaller Godown and showroom located close byCylinders will be sold on cash and carry basisDistributorship to those who are in possession of requisite land at advertised location

Low Cost, Self Employment Rural Model

Community KitchenScheme introduced in 2003-04 for Community Kitchens in Hospitals, Mid day meal scheme etc.Model extended to areas below viability of distributorships and for villagers with low purchasing power.

Kitchen to be set up by nearest distributor.Utensils and stoves through Marketing Companies/State Government.Villagers to use facility on user fee basis.Care taker by Village officials/Distributor.

Supply Demand Balance ImportIndigenous ProductionDemand LPG Demand Projections Expected CAGR 8% Asia Pacific CAGR 6% LPG Supply OutlookExisting Refineries being expanded and 3 new Refineries being commissioned. However, dependence on Imports to continue Two import facilities Kochi & Chennai 1400TMTPA HistoricalProjectionImportIndigenous ProductionDemand

Chart3

1005276482453

1053184091982

1133389732598

1177892872592

Demand

Indegenous Production

Import

Year

TMT

Sheet1

2009-102010-112011-122012-132013-142014-15

Demand124851324013940147091547516228

Indegenous Production102501053713612136321363213632

Import22352703328107718432596

2009-102010-112011-122012-132013-142014-15

Demand124851324013940147091547516228

Indegenous Production102501053713612136321363213632

Import22352703328107718432596

2005-062006-072007-082008-09

Demand10052105311133311778

Indegenous Production7648840989739287

Import2453198225982592

Sheet1

000

000

000

000

000

000

Demand

Indegenous Production

Import

Year

TMT

Sheet2

2005-06

2006-07

2007-08

2008-09

Sale/Demand

10052

10531

11333

11778

%age growth

0.09

4.76

7.6

3.9

Indigenous Production

Refineries

3316

3661

3855

3805

Fractionators

2134

2089

2121

2113

RIL

2198

2653

2703

2869

Essar

0

6

294

500

Total Prodn.

7648

8409

8973

9287

Imports

2453

1982

2598

2592

Demand

Indegenous Production

Import

Year

TMT

0

0

0

0

0

0

0

0

0

0

0

0

Sheet3

Chart4

12485102502235

13240105372703

1394013612328

14709136321077

15475136321843

16228136322596

Demand

Indegenous Production

Import

Year

TMT

Sheet1

2009-102010-112011-122012-132013-142014-15

Demand124851324013940147091547516228

Indegenous Production102501053713612136321363213632

Import22352703328107718432596

2009-102010-112011-122012-132013-142014-15

Demand124851324013940147091547516228

Indegenous Production102501053713612136321363213632

Import22352703328107718432596

2005-062006-072007-082008-09

Demand10052105311133311778

Indegenous Production7648840989739287

Import2453198225982592

Sheet1

Demand

Indegenous Production

Import

Year

TMT

Sheet2

2005-06

2006-07

2007-08

2008-09

Sale/Demand

10052

10531

11333

11778

%age growth

0.09

4.76

7.6

3.9

Indigenous Production

Refineries

3316

3661

3855

3805

Fractionators

2134

2089

2121

2113

RIL

2198

2653

2703

2869

Essar

0

6

294

500

Total Prodn.

7648

8409

8973

9287

Imports

2453

1982

2598

2592

Demand

Indegenous Production

Import

Year

TMT

Sheet3

MumbaiVizagPanipatGuwahatiHaldiaVijayawadaKochiBarauniKanpurKandlaJalandharDelhiDigboiChennaiMumbaiHighMangaloreSecunderabadAjmerParadipJamnagarLoniHaziraLPG Infrastructure Existing PipelinesProposed PipelinesBhatindaKolkatta

FacilityExistingPlan/Under ConstructionRefinery193Gas Plants10-Import4(3500TMT)2(1400TMT)Bottling Plants18913Pipelines2182 KM1000 KM

Modes of Transportation :

LPG Infrastructure / Logistics

Pipeline contribution upto 35% by 2015

Chart4

9447283172179

9742425228136

10307573259200

10634713252179

PACKED DOMESTIC

NDNE

BULK

AUTO LPG

ChartMode Transport

30

12

58

Mode Trans

LPG Pipelines30% Volumes

Railway Wagons12% Volumes

Road Movement58% Volumes

LPG Pipelines30

Railway Wagons12

Road Movement58

Chart2

3805

2113

3369

Break up of Indigenous availability - 2008-09

Sheet1

PSU Refineries3805

Fractionators2113

Private Refineries3369

Chart1 -Pron Imp

9287

2592

Ratio of Indigenous availability vis-a-vis Imports - 2008-09

9287 TMT(78%)

2592 TMT(22%)

Prodn - import

Indigenous production9287

Imports2592

SECTOR4YRS (2)

SECTOR WISE SALES 2008 -09

2005-062006-072007-082008-09

PACKED DOMESTIC944797421030710634

NDNE283425573713

BULK172228259252

AUTO LPG179136200179

NON-SUBSIDISED10081105311133911778

PACKED DOMESTIC944797421030710634

NDNE283425573713

BULK172228259252

AUTO LPG77136200179

NON-SUBSIDISED53278910321144

TOTAL9979105311133911778

SUBSIDISED LPG SALES944797421030710634

NON-SUBSIDISED SALES53278910321144

TOTAL9979105311133911778

SECTORCHART

1063490.2869757174

7136.0536593649

2522.139582272

1791.5197826456

SECTOR WISE SALES - 2008-09

SECTOR4YRS

SECTOR WISE SALES 2008 -09

2005-062006-072007-082008-09

PACKED DOMESTIC94479497429310307911063490

NDNE2833425457357136

BULK1722228225922522

AUTO LPG1792136120021792

10081105311133911778

SECTOR

SECTOR WISE SALES 2008 -09

PACKED DOMESTIC1063490

NDNE7136

BULK2522

AUTO LPG1792

11778

MARKETSHAREchart

567048.1406011207

308526.1929020207

302325.6664968585

MARKET SHARE - 2008-09

26%

marketshare

MARKET SHARE

IOCL567048

BPCL308526

HPCL302326

TOTAL11778

PROD.CHART

380532.0313157673

336928.3609731459

211317.7876925667

259221.8200185201

LPG PRODUCTION EX- VARIOUS SOURCES

PRODUCTION

PSU Refineries380532

Pvt. Sector Refineries336928

Fractionators211318

Import259222

11879

IMPORTCHART

865

1491

2217

2453

1981

2583

2592

IMPORT

IMPORT TRENDS

IMPORTS

2002-032003-042004-052005-062006-072007-082008-09

IMPORT865149122172453198125832592

Chart3

9979

10531

11332

11778

LPG CONSUMPTION PATTERN

Sheet2

2005-069979

2006-0710531

2007-0811332

2008-0911778

Investment Planned Till 2015

FacilityNumbers/ CapacityInvestment Million USDImport Facility2 (1400 TMTPA)140Tankage Traditional/Mounded14.3 TMT50 Cavern0.1 MMTPA110PipelinesPlanned1000km515

Investment Planned till 2015

FacilityNumbers / CapacityInvestment Million USDBottling PlantsUnder Construction2 X 44 TMTPA10 Planned6 x 44 TMTPA40 Filing EquipmentsAugmentation900 TMTPA20Equipments ( Cylinders & Regulators)65 million1560Total 2445

ConclusionIn India, LPG is the most sought after fuel for domestic use. Government of India has developed a Vision 2015 document for increasing use of LPG in India.

The Vision 2015 document is focused to improve customer Service and availability of LPG.

Government of India is committed to increase the penetration of LPG in Rural India by providing LPG at affordable price.

As a commitment to Environment, Government of India is also committed to replace kerosene by LPG at the earliest.

Thank You

Domestic LPG PenetrationSource : NCAERHuge Potential Available in Rural Area

UrbanRuralTotalPopulation March 2009 in Million326.2838.81165Households in Million93.1156249LPG connections in Million81.226.8108Penetration85%17%42%Per capita consumption (Kg/year)12883117

Indian LPG ScenarioDemand & Production 2004-09 Sources of Bulk LPGImport Growth (TMT)Source CountriesSource: PPAC/Industry Figures

Chart1

3855

2892

2122

2598

Actual Prodn. In TMT

PSU Refineries33%

Pvt. Refineries25%

Fractionator19%

Import23%

GROWTH OF LPG

YEAR2004-052005-062006-072007-08

Domestic LPG95319447974210302

Non Domestic LPG3585327891030

GROWTH OF LPG

Domestic LPG

Non Domestic LPG

FINANCIAL YEAR

DEMAND IN TMT

SHARE OF LPG

2007-08

PACKED10302

NDNE572

IND BULK258

AUTO LPG200

SHARE OF LPG

2007-08

PACKED91%

NDNE5%

IND BULK2%

AUTO LPG2%

DEMAND

2004-052005-062006-072007-08

Demand10043100521053111333

Production7738764884098868.7

DEMAND

Demand

Production

FINANCIAL YEAR

DEMAND IN TMT

FUTURE PRODN DEMAND

PRODUCTIONDEMAND

2008-09887612078

2009-10867012802

2010-111035713571

2011-121112714385

FUTURE PRODN DEMAND

FINANCIAL YEAR

DEMAND IN TMT

Availability shareout

PRODUCTION

DEMAND

FINANCIAL YEAR

DEMAND IN TMT

MARKET SHARE

Actual Prodn. In TMT

PSU Refineries3855

Pvt. Refineries2892

Fractionators2122

Import2598

MARKET SHARE

Actual Prodn. In TMT

Availability Shareout (2007-08)

PSU Refineries33%

Pvt. Refineries25%

Fractionators19%

Import23%

Actual Sale in TMT

IOC5464

BPC2999

HPC2871

Actual Sale in TMT

Chart4

865

1491

2217

2453

1981

2583

2592

IMPORT

IMPORT

2002-032003-042004-052005-062006-072007-082008-09

IMPORT865149122172453198125832592

IMPORT

0

0

0

0

0

0

0

IMPORT

LPG IMPORT

GROWTH OF LPG - DOMESTIC

YEAR2004-052005-062006-072007-08

Domestic LPG95319447974210302

GROWTH OF LPG - DOMESTIC

0

0

0

0

Domestic LPG

GROWTH OF LPG NON DOME

YEAR2004-052005-062006-072007-08

Other than Domestic LPG3585327891030

GROWTH OF LPG NON DOME

0

0

0

0

Other than Domestic LPG

Trend of Other than Domestic LPG

SHARE OF LPG

2007-08

PACKED10302

NDNE572

IND BULK258

AUTO LPG200

SHARE OF LPG

0

0

0

0

2007-08

PACKED91%

NDNE5%

IND BULK2%

AUTO LPG2%

DEMAND

2004-052005-062006-072007-08

Demand10043100521053111333

Production7738764884098868.7

DEMAND

00

00

00

00

Demand

Production

FINANCIAL YEAR

DEMAND IN TMT

MODE TRANSPORT

LPG PIPELINE25

RAILWAY WAGONS12

ROAD MOVEMENTS63

MODE TRANSPORT

0

0

0

MODE OF TRANSPORTATION OF BULK LPG

LPG PIPELINE25%

RAILWAY WAGONS12%

ROAD MOVEMENTS63%

FUTURE PRODN DEMAND

PRODUCTIONDEMAND

2008-09887612078

2009-10867012802

2010-111035713571

2011-121112714385

FUTURE PRODN DEMAND

00

00

00

00

FINANCIAL YEAR

DEMAND IN TMT

Availability shareout

00

00

00

00

PRODUCTION

DEMAND

FINANCIAL YEAR

DEMAND IN TMT

BP CAPACITY

Actual Prodn. In TMT

PSU Refineries3855

Pvt. Refineries2892

Fractionators2122

Import2598

BP CAPACITY

0

0

0

0

Actual Prodn. In TMT

Availability Shareout (2007-08)

PSU Refineries33%

Pvt. Refineries25%

Fractionators19%

Import23%

Sheet5

CAPACITY (in TMTPA)NO. OF BPs

IOC570089

BPC291548

HPC323142

Sheet5

00

00

00

CAPACITY (in TMTPA)

NO. OF BPs

5700

2915

3231

MARKET SHARE

Tankage (TMT)

Prodn. Sources220

BPs266

Import Terminals162

MARKET SHARE

0

0

0

Tankage (TMT)

Prodn. Sources34%

BPs41%

Import Terminals25%

Actual Sale in TMT

IOC5464

BPC2999

HPC2871

0

0

0

Actual Sale in TMT

Chart1

1143

286

351

432

72

Saudi Arabia50%

Kuwait13%

Abu Dhabi15%

Malaysia 19%

Iran3%

GROWTH OF LPG

YEAR2004-052005-062006-072007-08

Domestic LPG95319447974210302

Non Domestic LPG3585327891030

GROWTH OF LPG

Domestic LPG

Non Domestic LPG

FINANCIAL YEAR

DEMAND IN TMT

SHARE OF LPG

2007-08

PACKED10302

NDNE572

IND BULK258

AUTO LPG200

SHARE OF LPG

2007-08

PACKED91%

NDNE5%

IND BULK2%

AUTO LPG2%

DEMAND

2004-052005-062006-072007-08

Demand10043100521053111333

Production7738764884098868.7

DEMAND

Demand

Production

FINANCIAL YEAR

DEMAND IN TMT

MODE TRANSPORT

LPG PIPELINE25

RAILWAY WAGONS12

ROAD MOVEMENTS63

MODE TRANSPORT

MODE OF TRANSPORTATION OF BULK LPG

LPG PIPELINE25%

RAILWAY WAGONS12%

ROAD MOVEMENTS63%

FUTURE PRODN DEMAND

PRODUCTIONDEMAND

2008-09887612078

2009-10867012802

2010-111035713571

2011-121112714385

FUTURE PRODN DEMAND

FINANCIAL YEAR

DEMAND IN TMT

Availability shareout

PRODUCTION

DEMAND

FINANCIAL YEAR

DEMAND IN TMT

BP CAPACITY

Actual Prodn. In TMT

PSU Refineries3855

Pvt. Refineries2892

Fractionators2122

Import2598

BP CAPACITY

Actual Prodn. In TMT

Availability Shareout (2007-08)

PSU Refineries33%

Pvt. Refineries25%

Fractionators19%

Import23%

TANKAGE

CAPACITY (in TMTPA)NO. OF BPs

IOC570089

BPC291548

HPC323142

TANKAGE

CAPACITY (in TMTPA)

NO. OF BPs

5700

2915

3231

Sheet6

Tankage (TMT)

Prodn. Sources220

BPs266

Import Terminals162

Sheet6

Tankage (TMT)

Prodn. Sources34%

BPs41%

Import Terminals25%

MARKET SHARE

SAUDI ARABIA1143

KUWAIT286

ABU DHABI351

MALAYASIA432

IRAN72

MARKET SHARE

Actual Sale in TMT

IOC5464

BPC2999

HPC2871

Actual Sale in TMT

**India, already has a network of oil pipelines for supplying crude oil to the inland refineries viz. Guwahati, Mathura, Panipat, Barauni, Koyali etc., and for transportation of the petroleum products from the refineries and port terminals to inland depots and bulk consumers. Most of these pipelines are located in Eastern, western and northern parts of the country.At present the country has about 11,500 km of cross-country pipelines for transportation of crude oil and petroleum products. These pipelines are owned and operated by various oil and gas companies viz. Indian Oil Corporation Limited (IOCL), Gas Authority of India Limited (GAIL), Oil India Limited (OIL), Oil & Natural Gas Corporation Limited (ONGCL), Hindustan Petroleum Corporation Limited (HPCL), Bharat Petroleum Corporation Limited (BPCL) and Petronet VK Limited (PVKL). Except PVKL, all other companies are state owned.

Continuous efforts to reduce bulk LPG movement through road is being done so as to optimize on the transportation cost and also considering the safety aspects.

Road transportation during 2007-08 was nearly 63% of the total volume handled which has now been reduced to 58% with the commissioning of Panipat Jalandhar pipeline. ***