According to the equity research firm, Motilal Oswal, the city gas distribution (CGD) sector in India is expected to register compounded annual growth rate (CAGR) of 10 per cent over the next decade through 2030. The positive outlook of the sector can be attributed to government’s efforts to increase the share of natural gas in India’s primary energy mix from 6 per cent at present to 15 per cent by 2030. The report has covered the growth registered by three main players in the sector, namely, Indraprastha Gas Limited (IGL), Mahanagar Gas Limited (MGL) and Gujarat Gas Limited (GGL). During 2019-20, IGL witnessed an increase of 22 per cent in total number of residential consumers, reaching 1.4 million. On the other hand, MGL added 100,000 consumers, catering to 1.26 million households and GGL added 93,000 households taking the total to 1.4 million. Further, as per the report, MGL has set up 55 new compressed natural gas (CNG) stations in 2019-20, while GGL and MGL added 52 and 20 CNG stations respectively. In terms of pipeline infrastructure, GGL has a total network of 24,300 km whereas IGL and MGL have a total network of 14,605 km and 5,630 km respectively.
Going forward, IGL is planning to expand its operations through mergers and acquisitions at other CGD network. So far, it has converted 90 per cent of its industrial customers to PNG. Meanwhile, GGL is looking forward to the 11th round of CGD bidding, which is expected to include geographical areas (GAs) contiguous to its operating areas. MGL intends to add 1.1 million households and expand its coverage to 400 CNG outlets.
Motilal Oswal assesses the progress made by the key players in the CGD sector and estimates the volume growth over the next decade in the report which can be viewed here.