India's No. 1 Gas Company

India's No. 1 Gas Company

GAIL growth over the years GAIL has completed two-and-half decades of an eventful journey. Starting with a natural gas transmission company, it is today an integrated energy company along the Natural Gas value chain with global footprints. Having started as a gas transmission company during the late eighties, it grew organically over the years by building a large network of Natural Gas trunk pipelines covering a length of over 7,800 km. Today, GAIL has interests in the business of Natural Gas, LPG, Liquid Hydrocarbons and Petrochemicals, the latter being value-added products. The Company has also entered in telecom sector by leasing bandwidth available through the OFC which is laid along the gas pipelines for their operation and maintenance. GAIL has also diversified into Exploration & Production, City Gas Distribution and is steadily developing an overseas presence etc. These are exciting times for GAIL with the Company recording a revenue of Rs. 249.96 billion and a PAT of Rs. 31.40 billion in FY 2009-10. The Company's market capitalization on 31st March, 2010 was Rs. 520 billion. The Company is also implementing 5 new pipelines and in addition, augmenting capacity of two existing pipelines. This will lead to doubling of pipeline length and transmission capacity in the next 3 to 4 years. GAIL's Vision Be the Leading Company in Natural Gas and Beyond, with Global Focus, Committed to Customer Care, Value Creation for all Stakeholders and Environmental Responsibility Natural Gas GAIL owns and operates a network of over 7,800 km of Natural Gas high pressure trunk pipeline with a capacity to carry 157 MMSCMD of natural gas across the country. It supplies natural gas as fuel to power plants, as feedstock for gas based fertilizer plants and to over 500 other small, medium and large industrial units to meet their energy and process requirements. Natural Gas continues to constitute the core business of GAIL. During the year 2009-10, Natural Gas Sales have increased to 81.43 MMSCMD and the Gas Transmission has increased to 106.74 MMSCMD. Today, the major focus for GAIL is to maintain its dominant position in the gas business, especially the transmission segment and continue the relationship

Major Business Segments of GAIL th with existing customers and also add more customers. Therefore, during the 11 plan period, GAIL would build 5000 km of pipelines. These would include large trunk pipelines along with smaller pipelines which would provide connectivity among trunk lines so that the Company is able to have some sort of a grid. GAIL is implementing five new natural gas pipelines in the country. These pipeline are : 1) 610 km Dadri Bawana Nangal pipeline passing through UP, Delhi, Haryana and Punjab 2) 450 km Chainsa Gurgaon Jhajjhar Hissar pipeline passing through Haryana and Rajasthan 3) 2050 km Jagdishpur Haldia pipeline passing through West Bengal, Jharkhand, Bihar and U.P. 4) 1389 km Dabhol Bengaluru pipeline passing through Maharashtra and Karnataka 5) 1114 km Kochi Kanjirkkod Bengaluru / Mangalore pipeline passing through Kerala, Tamil Nadu and Karnataka. In addition to these, GAIL will be augmenting the capacities of two existing pipelines, viz. Dahej (Gujarat) Vijaipur (Madhya Pradesh) pipeline and Vijaipur (Madhya Pradesh) Dadri (Uttar Pradesh) pipeline. The total length of the new pipelines will be around 5000 km and the estimated investment on these would be nearly Rs. 280 billion. When these pipelines are commissioned, the capacity is expected to increase from 157 MMSCMD at present to around 300 MMSCMD. LPG and other Liquid Hydrocarbons GAIL has 7 LPG Plants in the Country. In 2009-10, total Liquid Hydrocarbon production including LPG was 1440 TMT. The LPG and other Liquid Hydrocarbons sales during FY 2009-10 were 1443 TMT. LPG Pipeline LPG transmission through pipelines was 3161 TMT in the year 2009-10.

The emerging integrated pipeline network

Petrochemicals GAIL owns and operates a gas based integrated petrochemical plant at Pata, Uttar Pradesh with a capacity of producing 420,000 TPA of Ethylene and 410,000 TPA of Polymers i.e. HDPE and LLDPE. During 2009-10, the production of polymers was 417 TMT. The polymer sales were 410 TMT. GAIL is expanding the capacity of its petrochemical plant at Pata to 5 Lakh MT and plans to increase the capacity to 8 Lakh MT in phases. GAIL is also looking to expand its presence through Joint Ventures with atleast one more plant in India and one overseas GAIL (India) Limited led Joint Venture Company (JVC), Brahmaputra Cracker and Polymer Limited (BCPL) is implementing the Rs. 54.61 billion Assam Gas Cracker Project to set-up an integrated Petrochemical Complex at Lepetkata, District Dibrugarh. The Joint Venture Company (JVC) promoted by GAIL with 70% equity participation and the remaining 30% equity is shared equally among OIL, NRL and Govt. of Assam. The project will be completed in 60 months from the date of approval. The petrochemical complex will comprise of a cracker unit, downstream polymer and integrated off-site/utilities plants. The complex has been configured with a capacity of 220,000 tons per annum (TPA) of Ethylene and 60,000 tons per annum of propylene with Natural Gas and Naphtha as feed stock. GAIL has equity participation of 19% in the ONGC Petro - additions Limited (OPaL) petrochemical project being set up at Dahej with a planned capacity of 1 million TPA. City Gas Projects GAIL was the pioneer of City Gas Distribution projects in India for supplies to households, commercial users and for the transport sector by forming Joint Venture Companies. With Natural Gas emerging as the fuel of choice in the country, GAIL believes that the next decade will belong to the city gas. GAIL has formed eight Joint Venture companies for city gas projects in various parts of the country. On the global front, GAIL has established its CNG and City Gas presence in Egypt through equity participation in Fayum Gas, Shell CNG and Natgas, Egypt. It has also acquired stake in China Gas Holdings for CNG opportunities in mainland China.

GAIL has set up a subsidiary company, GAIL Gas Limited for City Gas Distribution (CGD) and CNG corridor business. The subsidiary company will take up Distribution and Marketing of CNG as fuel for vehicles (inter city as well as intra city), Piped Natural Gas for domestic/ commercial/ industrial purposes and Auto LPG as fuel for transport vehicles in the various cities of India and abroad. The subsidiary company will also take up investment in and setting up of infrastructure, in the various cities of India and along the national highways for building CNG corridors which includes, among others, natural gas compressor stations, laying of the pipelines from City Gate Station(s) to the consumption areas and associated facilities, setting up of distribution points / retail outlets for CNG/ Auto LPG and transport gas through mobile cascades/ lorries. The new subsidiary will also carry out allied retail business activities at CNG / Auto LPG retail outlets within the cities and along the highways. The subsidiary will also form alliances with Gas Producers/ Strategic Partners for implementation of the City Gas Projects as per the strategic decisions taken by GAIL. Telecommunication Leveraging on its pipeline network, GAIL has built up a strong OFC network for leasing of bandwidth as a carriers' carrier. GAIL's telecom business unit - 'GAILTEL' has approximately 12,200 km network, offering highly dependable bandwidth for telecom service providers across 175 locations in the states of Rajasthan, Gujarat, Madhya Pradesh, Maharashtra, Uttar Pradesh, Andhra Pradesh, Tamil Nadu, Karnataka, Kerala, Haryana and Delhi. GAILTEL has been the first alternate service provider to become operational in the Delhi-Mumbai route, first to implement DWDM technology in India and the first carrier to provide service level agreement. Overseas presence Exploration and Production In a move towards integration along the energy chain and for sourcing supply, GAIL has entered into the area of Exploration & Production. GAIL holds a participating interest in 27 oil and gas exploration blocks. (24 in India, 2 in Myanmar and 1 in Oman). Of these, 9 are on-land blocks and 18 are offshore blocks GAIL consortium has participating interest in 1 CBM block in collaboration with Arrow Energy of Australia, EIG Energy Infrastructure Group and Tata Power. Hydrocarbon discovery have been made in 9 E&P blocks. Crude oil production is in progress from 1 onland block (Cambay Ahmedabad where GSPC is the Operator and GAIL has 50% participating interest). Development activities have started in blocks A-1 and A-3 in Myanmar. First gas production from these blocks is expected from May 2013. GAIL is the Operator of 2 onland blocks Rajasthan onland (RJ-ONN-2004/1) awarded during NELP-VI bidding round and Cauvery onland (CY-ONN-2005/1) awarded during NELP-VII bidding round. Apart from its equity participation in three retail gas companies in Egypt and in China Gas Holdings in China, participating interest in offshore blocks in Myanmar and one onland block in Oman, GAIL is pursuing business opportunities in regions such as South / South-East Asia, West Asia, Russia and Central Asian Republics and African continent in the areas of exploration and production, gas transmission, CNG and city gas distribution, LNG and petrochemicals. GAIL has set up a wholly- owned subsidiary company viz. GAIL Global (Singapore) Pte. Ltd. in Singapore. GAIL has incorporated its first Joint Venture abroad GAIL China Gas Global Energy Holdings Limited - wherein GAIL and China Gas are equal partners and has been registered in Bermuda. In order to have a long term association with China Gas and also to expand business in the fast downstream Chinese gas sector, the Joint Venture (JV) will pursue opportunities in CNG, City Gas, Pipeline, CBM, LNG and E&P projects. Regd. Off.: 16, Bhikaiji Cama Place, R. K. Puram, New Delhi-110 066 Website : www.gailonline.com