LPG REVOLUTION IN BANGLADESH. Mohammed Saidul Islam Director & CEO LAUGFS Gas (Bangladesh) Ltd.

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1 LPG REVOLUTION IN BANGLADESH Mohammed Saidul Islam Director & CEO LAUGFS Gas (Bangladesh) Ltd.

2 Table of Contents - LAUGFS at a Glance in Bangladesh - Country Facts - Overview of Natural Gas in Bangladesh - LPG Scenario of Bangladesh - Developing LPG Market in Bangladesh: Opportunities & Challenges - Recommendations Content Table

3 LAUGFS in Bangladesh

4 LAUGFS Gas (Bangladesh) Limited The company started with the Australian brand Kleenheat Gas and then Petregaz in Bangladesh. Finally, Laugfs Gas took over the business from Petredec Elpiji Limited in Having entered the local LPG downstream industry in 2001, LAUGFS has grown rapidly over the years, establishing an extensive distribution network across the country. LAUGFS operates a world-class LPG import, bottling and distribution facility in Mongla Port with a storage capacity of 1,800 MT with additional 3,200 MT construction work ongoing. It distributes LPG for domestic, commercial and industrial customers with an extensive nationwide cylinder distribution network. Being the first to introduce Autogas to Bangladesh, LAUGFS also supplies LPG to eight automobile service stations in Bangladesh. LAUGFS is also the first LPG operator in Bangladesh bringing in imported LPG directly from the source on its own sea vessel, namely Gas Courage.

5 LAUGFS Gas (Bangladesh) Limited: - Terminal Location: Mongla Port. - Sphere Capacity: Currently 1800 MT. and another 3200 MT. installing. - Only Laugfs owns three pressurized sea going LPG Vessels named Gas Challenger, Gas Success & Gas Courage - 100% Imported Cylinders. - Carousel - 24 head Automated Stations

6 LAUGFS in Autogas sector of Bangladesh

7 Bangladesh: Country Statistics

8 Bangladesh: At a Glance Area: 147,570 sq km Population: 168,957,745 (Estimated) Capital: Dhaka Population in Urban Area: 55 Million Household: 34 million Population In Rural Area: 113 Million Per capita income: USD 1,610 Economy: 44 th largest in the world GDP Growth Rate: 7.2% per year Villages: 87,316 Rivers: 800 Population Growth rate: 1.2% Literacy rate: 59% Source: bangladesh.gov.bd Country Facts

9 Natural Gas in Bangladesh

Natural Gas Outlook: Sector wise Consumption: 2015-2016 Sector

80 Industry 156.00 Fertilizer 52.60 Domestic 141.50 CNG 46.

10 Natural Gas Outlook: Sector wise Consumption: Sector Consumption (BCF) Grid Power Captive Power Industry Fertilizer Domestic CNG Commercial & Tea 9.00 Source: Petrobangla Annual Report 2016 Natural Gas Outlook

11 Natural Gas Outlook: Price Change in Recent Years Year Single Burner/BDT % Increased Double Burner/BDT % Increased CNG/CM (BDT) % Increased % % 35 17% % 650 0% 35 0% % % 38 9% % % 40 5% 1 USD = BDT Natural Gas Outlook

12 Natural Gas Outlook: Supply & Demand NG Demand & Supply Forecast Annual gas consumption may exceed 1.0 Tcf by 2020 as per gas sector master plan The demand for gas will stand at 8,000 MMCFD in 2041 according to an estimate of the energy division. 6,000 5,000 4,000 3,000 2,000 1,000 - Demand/MMCFD Supply/MMCFD Source: JICA Project Team based on the data from Data Collection Survey on Bangladesh NG Sector 2012 Published by: Power Division, 2015 Natural Gas Outlook

13 Natural Gas Outlook: Govt. Future Plan 35 million tonnes or 3,500 MMCFD of LNG supply in 2041 through using the an under construction floating and land based LNG terminals. Another 1,300-2,300 MMCFD would be supplied from local sources. Already stopped permitting new CNG stations in Bangladesh According to the Energy Division of Bangladesh, Govt. wanted to completely stop the use of CNG by 2021 through replacing those with adequate number of LPG Autogas stations across the country. 48 LPG licensees and counting, 43 filling plants are to be constructed, 23 LPG terminals are being built plus 16 more to come. Source: The Daily Star, Energy & Power Magazine Natural Gas Outlook

14 LPG Scenario of Bangladesh

15 Active LPG Players: Current Capacity Sl. No. Company Name Feb-18 Approx. Storage Capacity (MT) 1 LAUGFS Gas 1,800 2 Bashundhara 9,400 3 Jamuna 3,100 4 TotalGaz 2,610 5 Omera 5,500 6 BM 3,150 7 SKS 3,000 8 BPC 1,540 9 Beximco 3, G Gas 3, Orion 3, Navana 5, Universal Bin Habib Padma 80 Approx. Total 44,380 Padma Bin Habib Universal Navana Orion G Gas Beximco BPC SKS BM Omera TotalGaz Jamuna Bashundhara LAUGFS Gas Approx. Storage Capacity (MT) 0 2,000 4,000 6,000 8,000 10,000 LPG Outlook

On Map: LPG Terminals Year LPG Terminal (No) 2012 6 2013 6 2014 6 2015 8

16 On Map: LPG Terminals Year LPG Terminal (No)

17 On Map: Satellite Filling Stations Company Name Satellite Capacity (MT) No. of Satellite Stations Bashundhara 4,400 3 Jamuna TotalGaz Omera 1,000 3 Universal 80 1 Bin Habib Padma 80 1 BM Energy 150 1

18 Use of LPG in Different Sectors Industry 14% Transport (autogas) 1% Large Industry 1% Others 3% Domestic 81% Domestic Industry Transport (autogas) Chemical LPG Outlook

19 MT LPG Growth Forecast: LPG Import Forecast (MT) 3,000,000 2,500,000 2,000, ,500,000 1,000, , Year 0 LPG Import (MT) LPG Terminal (No) LPG Outlook

20 Supply Chain of LPG 12 Companies is current market and more are coming. 650,000+ MT product flow through the channel per year. 20+ million LPG cylinders injected to the market till now. LPG Outlook

21 LPG Suppliers/Traders: Petredec Shell Siam Gas Itochu Corporation LAUGFS Gas Others Serving over 110 customers across six continents Trading over 10 million tonnes of LPG per year Owns over 50 LPG Vessels Currently the 2 nd largest supplier in BD Also operates from Maldives 20 LPG Tanker Vessel with the combined loading capacity of over 110,000 tons. 3 VLGC with combined loading capacity of 106,000 tons. Trading based from Singapore. Active from last 2 years Owns 3 LPG Vessel Hambantota, Sri Lanka pressurized terminal of 30kt to start from Jun 2018 OTI, Petro Vietnam, Petronas Malaysia, BB Energy, Trafigura LPG Outlook

22 Developing LPG Market in Bangladesh: Opportunities & Challenges

23 Opportunities Demand for LPG is increasing, whereas reserves of NG is depleting. Around 2.5 million NG domestic user to be converted in LPG by 2025 Autogas can replace CNG, Petrol/Octane GDP growth crossed 7%; per capita income estimated USD 3,000 which is USD now. Last few years showing 30-50% growth based on various segment on year to year basis Government increased NG price across all user levels More than 1 million illegal NG connections CNG price increased in Provided government promoting Autogas it can be the right substitute for CNG Purchase power increase makes alternate fuel like LPG more attractive

24 Challenges Safety throughout the value chain International Price fluctuation of LPG Insufficient infrastructure causing higher transport cost Influence of Channel Partners Government policy, bureaucracy Sourcing of LPG, lesser draft in rivers Unplanned expansion of city Others.(cost of business, distribution etc.)

25 Challenge: Converting the NG domestic users No of NG customers (approx.) 2,500,000 LPG use/month (kg) Additional Yearly LPG requirement (MT) Additional cylinders required (pcs) approx ,000 1 crore , crore , crore - Another 1 million+ illegal connection of NG exists in the country - Total 3 million+ households using a mixture of NG, LPG, Kerosene, firewood, electricity, bio-fuel etc.

26 Challenge: Decanting/Illegal Filling

27 Recommendations: Favourable Government Policy Minimum bureaucracy: Quick approvals, One point service Favourable import duties, initial VAT & Tax exemption Ensure quality investment (local and foreign) with higher value addition Pricing strategy of NG, Fuel Oil, other alternatives Promote LPG Government and LPG Operators need to promote LPG as the best alternative fuel Change people s perception positively on LPG as safe and efficient Brand awareness, safety campaign

28 Mohammed Saidul Islam Thank You

LPG Markets in the Indian Sub-Continent

LPG Markets in the Indian Sub-Continent WLPGA Indian Sub-Continent Regional Summit Walter M. Hart, Ph.D., P.E. February 15, 2012 Taj Mahal Hotel, New Delhi, India Agenda Population Sub-Continent LPG Demand,