BUSINESS GROWTH PLANS Of ONGC Group

1. BUSINESS GROWTH PLANSOfONGC Group Presentation to Hon’ble Secretary (P&NG) 30.07.2004

2. Benchmarking with global players

3. ONGC – Power Background • Already Producing = 1000 MW • Gas Based • Part Sent to Grid • From 1984 onwards

4. ONGC’s Gas Business - 15% • ONGC’s Value Added Business - 15% • ONGC’s Refining - 20%

5. Chemical / Petrochemical Business

6. Objectives of Integration • To capture higher values in Product chain • To provide more stable revenue / margins

7. Benchmarking with global players

8. Strategy Synergistic Group Level Integration Global Level • Based on • existing resources • Existing experiences/ • relationships • Nationally • internationally • Based On • proven global directions • in line with market • requirements • if required in association with top global players

9. Leading to • Being the lowest cost producer • For atleast seven years • Being one of the top market player in various segments

10. A World of OpportunitiesPower

11. Relative Power Consumption

12. Power SectorPresent Demand – Supply Scenario

13. Projected Power Scenario Tamil Nadu • Key Drivers: - • Rapid industrialization in couple of centres e.g. Coimbatore, Guddalore. • No new generation projects on the anvil.

14. Central Electricity Act 2003 • Separation of Generation, Transmission and Distribution • Power producers can market directly on Open Access • Fiscal incentives for Mega power Plant (> 1000 MW)

15. A World of OpportunitiesPetrochemicals

16. Petrochemicals – Per Capita Consumption

17. Domestic – Production / Consumption Present Scenario

18. CARG %

19. Demand Projection of Major Commodity Polymers - INDIA

20. PBDIT as % of operating income

21. A World of synergiesONGC Group

22. A World of Synergies ONGC • Hazira (around 1.4 MMTpa of high aromatic naphtha) • Uran (around 300,000 Mtpa of high grade paraffinic naphtha) Petronet LNG • LNG Terminal • Extraction of C2-C3 (10 MMTpa) and further integration • Dahej SEZ MRPL • Highly paraffinic naphtha (500,00 Mtpa) • Pleating in aromatics • Easily upgradeable for higher valuechain • High bottoms OVL Sudan operations • Nile blend based MRPL kerosene – a gold mine for LAB • Precursors for additional projects in Sudan and neighbouring countries

23. A World of Synergies • Mangalore Port • All weather Port with 15 Meter Draft & Break Water • MRPL already has two dedicated jetties • One more jetty for LNG imports committed • Plant Locations in / around Port Area committed • MHB Pipeline • Possibility of connecting west-coast to east – coast exists, catering to growing market demand of all southern states

24. Operationalisation of Opportunities • (through synergistic integration) • At two base hubs • Mangalore • Dahej

25. Base • Dahej • Mangalore

26. Composition of LNG

27. ONGC Business Growth Plan at Dahej HUB • C2/C3 & LPG extraction project • Basic Petrochemical Complex • 1000 MW Mega power plant (C1) • Dahej Special Economic Zone Development project

28. C2-C3 Extraction – linked to PLL’s LNG terminal at Dahej • LNG being in very cold liquid state (-160°C), to save energy and attendant cost thereof, it is desirable to extract C2, C3 & C4+ components in liquid state itself

29. C2-C3 & LPG extraction at Dahej Design Capacity & Product quantities

30. C2-C3 & LPG extraction at DahejProject economics

31. Financial Appraisals by SBI Caps

32. Basic petrochemical Complex at Dahej

33. Stage wise – Value addition

34. Dahej Special Economic Zone Project • Govt. of Gujarat already promulgated an ordinance. • All projects to be located within Dahej SEZ. • Benefits expected to ONGC: • Land at reasonable and competitive rate • Single Window clearance • Significant Tax / Fiscal benefits • Exemption of Sales Tax and Other Taxes

35. Marketing Plan envisaged from SEZ • Approx. 50% of Petrochemicals to be exported through tie-up arrangement with technology provider. • Approx. 50% to entrepreneur within SEZ for manufacture of Petrochemical products for export market. • Balance, if any, for domestic market

36. 1000 MW Power Plant at Dahej

37. Base • Dahej • Mangalore

38. Identified opportunities 1. LNG based chain 2. MRPL & ONGC associated projects

39. Base • Mangalore • LNG Based Chain

40. Why Mangalore? • The Port • All weather port with 15 meter Draft & Break water • Suitable location for LNG jetty available • Land and RoW available as required • ONGC already own two Oil berths • New Mangalore Port Trust is supportive

41. Why Mangalore? • The Special Economic Zone (SEZ) • Exempt from Duties and Taxes : savings on CAPEX • Single-window clearance for all requirements • Land available for downstream plants • Karnataka Government is supportive

42. Why Mangalore?Interlard • No Petrochemical manufacturing unit • No immediate competition for Gas • 3 Approved Power projects (Mangalore, Ennore, Bidadi) to be assigned • Demand for Power, Fuel & Feedstock, CNG • ONGC established in Mangalore

43. LNG Based Business Plan at Mangalore • LNG SOURCING AND REGASSIFICATION PLANT • Initial discussion held with M/s Ras Gas, LNG supplier to PLL. • Ras Gas team interacted with Karnataka Govt. officials to assess demand. • Initial discussion with XXX held. • Demand assessment from MRPL, MCF, GMB, PPN power plants consolidated. • estimated phased requirement of LNG: • 5 MMTPA Q1/2008 • 10 MMTPA Q4/2008 • NMPT agreed to allocate a jetty and land to ONGC for degasification plant, C2-C3, power plant. • Estimated cost of the plant Rs 5000 cr.

44. LNG Based Business Plan at Mangalore • C2/C3 recovery and Basic Petrochemical Complex • Plant capacity similar to Dahej i.e. C2/C3 and LPG recovery plant of 2 x 5 MMTPA capacity • Above C2/C3 & Naphtha from MRPL to be used as feed for petrochemical complex. • Estimated cost: • C2,/C3 & LPG recovery Rs 1100 cr. • Petrochemical complex Rs 8933 cr.

45. Power PlantsInSouthern India

46. LNG Based Business Plan at Mangalore • 1445 MW LNG Based Power Plant at Mangalore • Peak Power Plant deficit in Karnataka 2000 MW • No gas based power plant in Karnataka • Karnataka govt. proposal to set up 1500 MW imported coal based power plant at Mangalore could not be firmed up. • 1445 MW power plant proposed in Mangalore SEX area which will consume 1.5 MMTPA RLNG. • Estimated cost Rs. 4624 cr.

47. LNG Based Business Plan at Mangalore • Pipeline transportation of RLNG • Merchant sale of RLNG proposed to various consumers enroute: • Mangalore – Bangalore – Bidadi – Ennore • Mangalore – Kochi • Mangalore – Goa • Estimated cost Rs. 2000 Cr.

48. LNG Based Business Plan at Mangalore • 1100 MW power plant at Ennore • Govt. of Tamil Nadu earlier invitation to private sector for setting up 1100 MW power plant at Ennore could not fructify. • Govt. of Tamil Nadu keen to assign to project to ONGC & agreed to extend payment security mechanism for power sales. • Power plant to be located within Ennore SEZ area • Estimated Cost Rs. 3500 cr.

49. Alternative Possibility of LNGTerminal At Ennore • If Sufficient LNG from different sources is available, a separate LNG Re-gasification terminal at East Cost of India (possibly at Ennore) with SEZ can be considered. • (Capacity : around 5 MMTPA)

50. Cost of Power with LNG Based Plant at Ennore with LNG Supply from Mangalore