Investing

HPCL to invest Rs1,200 crore in city gas distribution business

HPCL plans to invest the funds in city gas distribution to expand network and build infrastructure. Photo: MintHPCL plans to invest the funds in city gas distribution to expand network and build infrastructure. Photo: Mint

Mumbai: State-run Hindustan Petroleum Corp. Ltd (HPCL) plans to invest Rs1,200 crore in city gas distribution (CGD) to expand network and build infrastructure, a company official said.

“We would be investing Rs1,200 crore in the next three to five years in various city gas distribution networks that we have. We are bullish on this segment and plan to expand our reach to more cities than we are in now,” the official said on condition of anonymity.

HPCL has three city gas distribution joint ventures: Aavantika Gas Ltd, Bhagyanagar Gas Ltd and Godavari Gas Ltd.

Aavantika Gas, its joint venture with GAIL (India) Ltd in Madhya Pradesh, supplies piped natural gas (PNG) to consumers in domestic, industrial and commercial sectors and compressed natural gas (CNG) for automobiles in Indore, Ujjain and Gwalior.

“In Aavantika and Bhagyanagar, we are planning to invest around Rs400 crore to build infrastructure and network. We also plan to expand to the industrial and commercial sector,” the official said.

This financial year, Aavantika Gas is targeting adding more domestic connections and expanding its network.

“The company’s aim is to increase the number of CNG stations and also domestic customers to drive profitability, while meeting Petroleum and Natural Gas Regulatory Board (PNGRB) and (petroleum) ministry’s target of achieving 10 lakh domestic connections and green corridors for CNG,” said Aavantika Gas in its annual report for 2015-16.

The report added that the company plans to expand its customer base for industrial and commercial customers in Indore and Pithampur for increasing market share through aggressive marketing.

Bhagyanagar Gas, a joint venture with GAIL that supplies natural gas in Andhra Pradesh, plans to connect 100,000 new households in Hyderabad to its PNG network within the next two years and more than 250,000 by 2021.

Godavari Gas, HPCL’s third joint venture with the Andhra Pradesh Gas Development Corp. (a joint venture between GAIL and the state government) is setting up a CGD network in East Godavari and West Godavari districts, for which the company has received the PNGRB’s nod.

“To meet the growth strategies, apart from capacity expansion of refineries, the corporation has plans for participating in the end-to-end natural gas value chain, vertical integration into profitable petrochemical business and establish presence in renewables for ensuring success in the market oriented scenario and achieving long-term bottom line growth,” HPCL said in its 2015-16 annual report.

[“Source-Livemint”]

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