Investor Presentation - Welspun

Welspun Group | Welspun Corp Ltd
1. Strong Industry Fundamentals
Relatively Few Major Players
• Highly capital intensive industry with high barriers to entry
• Niche markets effectively captured by Welspun
• Reliability and reputation for excellence are paramount, as
pipelines are used for critical applications such as oil and
gas transport
• Prospects for the industry brightening with oil prices at
sustainable levels for Oil & Gas firms.
Global Demand
• Business potential of around US$ 482 Bn (Source Simdex )
• Shale Gas rapidly increasing its share in US – 13.6 trn cu ft
by 2035 from 5.0 trn cu ft in 2010(source : EIA Energy
Outlook 2012)
• Replacement of the old pipelines in US
• US oil boom is expected to enhance pipeline demand
• Alaska Pipeline project - another boost to the demand for
pipes (35 trn cu. Ft. discovered Natural Gas till early 2012)
Domestic Demand
• Low pipeline penetration in India provides huge potential
• Natural Gas as a source of energy is growing at a rapid pace
and shall grow the demand for pipelines
• Petroleum & Natural Gas Regulatory Board (PNGRB)
– Rs. 8.5 bn J&K project awarded to GSP consortium,
- Approved 1104 km Kochi – Koottand – Bangalore- Mangalore
in 2012.
• City Gas Distribution – 200 Cities by 2015
• Liquefied Natural Gas (LNG) terminals – 18.6 MTPA through 3
existing terminals
• Water Infrastructure projects under the 12 th Plan and JNNURM
Company
Welspun is well placed, with global clients and state-ofthe-art
technology, to capitalize on this opportunity
International Demand Outlook 2012 –
2017 (Future Pipeline Projects)
Region
Projects
Total
Length
(kms)
Total Length
(kms)
Quantity
(MMT)
Quantity
(KMT) (1)
Business
Potential
(US$
Bn) (1)
North America 238 71,000 59 80
Latin America 66 38,000 32 59
Europe 153 42,000 35 79
Africa 65 24,000 20 29
Middle East 149 42,000 35 65
Asia 129 69,000 13 126
Australasia 74 22,000 3 44
Total 874 308,000 62 482
Source: www.simdex.com November 2012 data update
Domestic Market Size
Business
Potential
(US$ Bn) (2)
GAIL* 6,642 1,328 1.6
RGTIL 2,628 526 0.6
IOCL 4,366 874 1.0
Total 13,636 2,728 3.2
Source: *GAIL India Ltd Presentation May 2012
Source: Basic Stats Report – www.petroleum.nic.in
Share of Expected Demand 2012 - 2017
Global Demand for Pipes
Proposed pipeline of GAIL
Phase I (Under Execution)
Name of Pipeline
Length
(Kms)
Cost
(Rs Cr)
Add. Cap
(MMSCMD)
DVPL Ph -II / Vijaypur Dadri 1,109 10,764 80
Dadri - Bawana - Nangal 594 2,358 31
Chainsa - Jhajjhar - Hissar 349 1,315 35
Sub Total 2,052 14,437 146
Phase II (Approved in 2009)
Name of Pipeline
Length
(Kms)
Cost
(Rs Cr)
Add. Cap
(MMSCMD)
Jagdishpur - Haldia 2,050 7,596 32
Dabhol - Bangalore 1,414 4,994 16
Kochi - Mangalore - Bangalore 1,126 3,263 16
Sub Total 4,590 15,853 64
Grand Total 6,642 30,290 210
Source GAIL India Investor Presentation , May 2012
Source: Simdex and Industry Sources 1. Conversion rate of 200 tons/ km 2. As illustrated in the adjoining tables
Australasia
6%
Asia
24%
Middle
East
13%
Africa
6%
North
America
16%
Europe
24%
Source: www.simdex.com Aug 2012 data update
Latin America
11%