Adanis to set up CNG dispensers at BPCL outlets

The Bharat Petroleum Corporation Ltd (BPCL) has decided to enter into a deal with the Gujarat Adani Energy Ltd (GAEL) for retail sales of compressed natural gas (CNG) in the city.

BPCL and GAEL, the wholly-owned subsidiary of the Adani Group, is expected to sign a memorandum of understanding (MoU) this week.

Executive Director of BPCL, Sanjay Krishnamurthi, who was here on Wednesday to finalise the deal with the Adanis, said, "The arrangement would be beneficial for both the entities. GAEL would be allowed to set up its CNG dispensers within petroleum outlets run by BPCL.

"GAEL will be allowed to function from four outlets run by BPCL in Ahmedabad. The expansion of the deal to other centres will be considered later."

He, however, denied to divulge the commercial aspects of the arrangement.

At present, GAEL is operating three CNG outlets in the city, located at Naroda, Jamalpur and Maninagar areas. The new arrangement with BPCL will help GAEL sell CNG from Kankaria, Drive-In, Viratnagar and Vasna areas in the city.

Out of the 39 BPCL retail outlets, four will house the CNG dispensers.

Interestingly, BPCL itself has been awarded licenses to set up CNG distribution network in Gandhinagar, Mehsana and Banaskantha districts. But the company is yet to begin the CNG sales due to the lack of infrastructure in these districts.

Meanwhile, the Gujarat State Petronet Ltd (GSPL), a subsidiary of state government enterprise Gujarat State Petroleum Corporation Ltd (GSPCL) has been laying gas pipeline across the state as part of its ongoing gas grid project.

"The gas pipeline of GSPL has just reached till Gandhinagar and we expect to start CNG sales in Gandhinagar in next three months' of time. Mehsana would come as second priority as it is also closely located with Gandhinagar and so the gas pipeline would reach Mehsana shortly.

"After setting up distribution network in both Gandhinagar and Mehsana, we would setup distribution network for CNG in Banaskantha district," said Krishnamurthi, while talking to Business Standard.

In Gandhinagar, BPCL may face a problem initially as it does not have any retail outlet in the City but sources said that the Corporation has already initiated process for opening up petroleum retail outlets in Gandhinagar also from which it might sell CNG as well.

"There are possibilities of putting up standalone CNG outlets as well," said the source close to the Corporation.

Sanjay Gupta, Chief Executive Officer (CEO) of the Adani Group could not be reached for his comments on the BPCL deal, but well-placed sources in the Adanis confirmed the development and said that the MoU with BPCL might be signed on Thursday.