Adani Group to scale up city gas biz

Adani Group, the Ahmedabad-based diversified group, plans to up its gas throughput substantially by the third quarter of the next fiscal.

The company’s gas business division is targeting a throughput capacity of 2 million metric standard cubic metres per day (mmscmd) of gas from the current 0.5 mmscmd of gas under its city gas distribution business.

Rajeev Sharma, chief executive officer, gas business, said, “We are currently operational in two cities and have complete infrastructure in place for six more cities and expect to start operations from the third quarter of the next fiscal.”

Sharma was speaking at the sidelines of an oil and gas seminar in New Delhi.
He said some regulatory approvals are pending, post which the company would commence gas distribution in the six cities. That will increase the throughput of the company substantially.

Also, the gas division will bid for five cities along with Indian Oil Corp (IOC) when the next round of bidding for city gas distribution starts in March. The five cities are Kota, Sonepat, Dewas, Mathura and Meerut.

A highly placed official from the company told DNA, “We have a plan to invest roughly Rs 500 crore in city gas distribution to expand our network further.” The company has so far invested Rs 700 crore in the business.

He said the Adani Group wants at present to focus on city gas distribution and has interests in supplying gas to power or fertiliser plants. In future, a diversification might be looked into, the official said.

The group currently has city gas distribution infrastructure ready in eight cities across the four states of Gujarat, Rajasthan, Uttar Pradesh and Haryana. “We are keen on expanding in these four states only,” the official said.

Meanwhile, the Adani Group, in joint collaboration with Gujarat State Petroleum Corp (GSPC), is also building a 6.5 million tonne per annum (mtpa) LNG terminal in Mundra at a cost of Rs 4,500 crore. It holds a stake of 25% in the terminal.

“GSPC is currently looking for a third partner interested in picking up the remaining 25% stake in the terminal. Once that is done, things will start moving at the ground level,” the official said. GSPC owns 50% of the terminal.

The official said zero date for the terminal is likely to be in December 2009 or January 2010. He said once the third partner is finalised, the consortium will finalise the company from whom the terminal will source its LPG requirement.

The capacity of the terminal, which was earlier 5 mtpa, was later revised to 6.5 mtpa as the higher capacity seemed more viable to the consortium.