Mahanagar Gas Limited (MGL), which provides piped natural gas (PNG) and compressed natural gas (CNG) in and around Mumbai, is evaluating various options to develop its city gas distribution (CGD) network in cities which will be made available by the Petroleum and Natural Gas Regulatory Board (PNGRB) through the bidding route. V C Chittoda, managing director of MGL, tells Kalpana Pathak that MGL's parent companies have no plans to sell MGL's stake, even as BG is exiting Gujarat Gas, a CGD player in Gujarat. Edited excerpts:
There are talks about BG planning to sell stake in MGL. Comment.
BG and GAIL are our promoters; they need to decide on what they wish for MGL. This is all speculation and I do not want to be a part of it.
So, is MGL planning to get listed?
The promoters will jointly take a call on this issue and decide.
How do you plan to expand?
We plan to double our CNG stations in the next few years. We plan to increase our steel pipeline from 300 km to 600 km. We have about 3,500 km of medium and low pressure polyethylene pipeline, which we need to take to over 5,000 km to supply natural gas to people. We plan to go from 5,30,000 to 10,00,000 domestic customers. We also plan to have more city gate stations. We will reach in Kalyan, Dombivili, Ambernath and Taloja to a large number of customers and increase our penetration in Mumbai.
You have not been able to move beyond Maharashtra, despite your 17 years presence in Mumbai.
There are two important aspects of a city gas distribution business. One, you need to have connectivity established. MGL’s network was not linked to the trunk line till mid-2010. Prior to that, total feed for this region came from Uran. The gas produced in the western offshore fields is brought to Uran in Maharashtra and partly in Gujarat. The gas brought to Uran is utilised in and around Mumbai. Uran being an isolated field, had no connectivity or facility to import gas. Till then, we were constrained to remain in our domain, primarily due to limited availability of natural gas. Later, the Petroleum and Natural Gas Regulatory Board granted the exclusivity for GA-2 (Geographical Area) consisting of Thane, Navi Mumbai, Mira-Bhayander, Kalyan, Dombivili, Ambar-nath, Badlapur, Ulhasnagar, Talaoja and Panvel. Now, we have gas and by means of expansion, we have been able to cover a good area.
Also, expansion depends on how we get imported gas and how much consumers are ready to pay. By this year end, we will have two more city gate stations at Ambernath and Taloja. We have two existing one at Wadala and another at Mahape. We are trying to establish our pipeline network all over.
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How has gas availability improved?
When MGL began its journey, awareness was a big problem. Over a period, awareness has now been generated. Large volume goes to state transport undertakings (STUs), which were looking to converting their vehicles to CNG from liquid fuel. As of now, we have around 150 CNG stations, which we plan to take to over 300 in the next five years. We picked up some industrial volume also. A large number of public transport buses have been converted to CNG and we are also growing our network for increasing CNG availability. With MGL now connected to the National Gas Grid, gas is available for expansion.
How are you looking at growth beyond this?
We are looking at newer areas to set up our stations. We have sent our letters of intent for setting up CNG stations and are also in talks with state-run oil companies to co-exist with them in some areas. We have sought permission from the Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation to allow us to co-exist with them in places where they have their retail outlets. We are also trying to get some plot from the government so that we can open mega stations where large number of filling facility / dispensing points will be available. As of now, we have three to four dispensing units at any given station. But at mega stations, we would have 10-12 dispensers. Volumes would be more. We would also be looking at increasing volumes at stations wherever we can.
Where will you source gas from for this expansion?
You must realise that when in CGD business, there are compelling reasons for providing economic fuel to people. There has to be a lucrative offer for people and for commercial vehicles to convert to CNG. For all this, we look to government and expect it to provide a good amount of indigenous gas to us for a faster progress and ramp up. In its absence, we have to depend on imported gas and when we depend on that, price factor comes in to play. As of now, our primary source of gas is from Uran. We also had KG-D6 block allocation but that has stopped due to fall in production. Rest we manage from imports. We are selling around 2.3 million metric standard cubic meters per day (mmscmd) at present and we plan to see this about 5 mmscmd in the next five years. However, if we do not get gas allocation, we would go for RLNG. It makes it difficult, but if we would not have any option.