Government’s Boost for Natural Gas in India
The Indian Government has set an ambitious target and announced huge plans to boost the supply of natural gas in India. Over the next decade, we would be able to witness significant changes in our consumption of this clean fossil fuel. Let us understand how the government proposes to achieve its targets. Let us also take a look at a few listed firms that could benefit from these expansion plans.
GAIL (India) Ltd
GAIL (India) Limited is the largest state-owned natural gas processing and distribution company in India. Currently, the main business segments of GAIL include natural gas, liquefied petroleum gas (LPG) transmission, petrochemical city gas distribution, exploration & production, and electricity production.
The company also has a network of 557 CNG stations. It sells CNG to over 11.5 lakh vehicles in NCR through this network.
Adani Total Gas
Adani Total Gas Ltd develops city gas distribution (CGD) networks to supply PNG to the industrial, commercial, domestic (residential) sectors. It also distributes CNG to the transport sector. The company has strategically set up CGD networks in Ahmedabad and Vadodara in Gujarat, Faridabad in Haryana, and Khurja in Uttar Pradesh. In November 2020, the company signed a definitive agreement for the acquisition of the business undertaking of city gas distribution and retail sale of CNG in the areas of Jalandhar, Ludhiana, and Kutch (East).
The Company had recently announced to set-up 10000 CNG stations by 2025.
Gujarat Gas Ltd also engages in the distribution of city natural gas in India. The company operates a network of approximately 24,400 kilometres of gas pipeline and 403 CNG stations.
Torrent Group has recently forayed into City Gas Distribution business to meet another critical need – Green Fuel – in different parts of India. Torrent Gas has its presence in 16 Geographical areas spread across 32 districts covering 7 States and 1 UT in India.
Torrent is committed to making Natural Gas widely available to people in the areas of its authorisation. The availability of Natural Gas shall create an ecosystem and provide a major boost to the socio-economic development of the region. The widespread availability of Natural Gas and CNG will help in reducing pollution and also lead to significant savings for families using CNG and industries using natural gas. It will also act as a catalyst for the overall economic development of the region.
From the above, we can see that many Companies have committed to set-up CNG Gas filling stations across India in the coming years. One sector that will immensely benefit is the gas storage tank and cylinder manufacturers.
It is estimated that, just to meet the demand for Natural Gas Vehicles (NGV), the present and/or new manufacturers, will have to scale up capacities to a million plus cylinders by 2025.
Currently in India, 99% of cylinder demand is met by Type 1 Steel cylinders, whereas worldwide, light weight composite cylinders are a preferred product as an alternate to steel cylinders. There are many advantages in using light weight composite cylinders. Bringing in foreign technology is an expensive proposition, to compete with the steel cylinder Industry. Investors must see Indigenous innovations in this area and must invest in this area to make alternate composite cylinders to replace steel cylinders in the near future.
Source: https://marketfeed.news/govts-boost-for-natural-gas-supply/ Dated: 21st January 2021