The city gas distribution (CGD) sector is expected to witness exponential growth in the next few years as the government has set a target of increasing the share of natural gas in the country’s energy basket from the existing level of 6.2 per cent to 15 per cent by 2030. Owing to the promising future of the CGD sector in India, THINK Gas Limited was established in 2018 to supply natural gas to consumers. The company has six licenses to operate in 11 districts of India, across the states of Punjab, Madhya Pradesh, Bihar and Uttar Pradesh. The company is engaged in the business of supplying natural gas to domestic, commercial, industrial and automotive sectors.
In an exclusive interview with CGDIndia, Hardip Singh Rai, Chief Executive Officer, THINK Gas spoke extensively about the company’s existing operations, network expansion plans, impact of Covid-19 on operations, technological advancements, challenges faced and the future outlook
What are the operational plans of THINK Gas in India and how will its network expand by March 2022?
THINK Gas is a relatively new player in India’s CGD sector and is still focused on foundational work. It is currently working towards creating a favourable ecosystem for natural gas by setting up compressed natural gas (CNG) retail outlets and developing relations with dealers and prospective customers. The company is also focussed on developing core infrastructure such as setting up city gas stations (CGS) and laying pipelines. THINK Gas currently has four operational CGSs. In January 2021, the company commissioned its first liquified compressed natural gas station in Bhopal, Madhya Pradesh.
THINK Gas is expected to have 11 operational CGSs by March 2022 and will be in a position to supply to all key demand centres. Moreover, the company plans to have more than 50 per cent of its steel minimum work programme (MWP) in place during 2022.
What has been the impact of Covid-19 on operations and how is the company recovering from it?
The Covid-19 pandemic had adversely affected the pace of laying steel pipelines. However, construction activities, which were halted during the Covid-induced lockdown period, have picked up pace and the company is expected to achieve its targets.
How has THINK Gas Limited’s outlook towards the CGD sector in India changed after entering it?
We remain very positive towards the sector and encouraged by the continued support and direction being provided by Government and the regulator. We have every intention to grow our business across the midstream segment including LNG and BioGas.
What are some of the technological tools being used by THINK Gas Limited in its operations?
THINK Gas has been using a quality contract management software in order to accurately monitor the progress on site. Through the software, live data is uploaded on the website and the company is able to remotely monitor the activities on the construction site. The deployment of this software has helped in reducing the dependence on third party progress reports. The data is received in real time thereby providing greater visibility of actual execution on the ground.
Technological upgradation has particularly played an important role for THINK Gas in India as the company is aiming to build a legacy in the country’s CGD sector. Technologies such as remote monitoring and geographic information system will help the company in detecting and fixing pipeline leakages in an efficient manner and serve the customers better. Such technologies require upfront capital expenditure but should allow us to reduce operational expenditure in long term.
What are some of the key challenges that the company has faced and how does it perceive the future outlook?
THINK Gas, like most CGD entities, faces challenges in obtaining equipment owing to substantial price hikes of up to 30-40 per cent. Another major issue that the company has faced is with regard to delays in obtaining permissions. While the authorities have showcased a highly positive intent for the CGD sector, government agencies still lack the resources for large-scale operations, due to which there are various delays in granting the requisite permissions.
Going forward, the company’s perspective towards the CGD sector in India remains optimistic due to favourable government policies. The company also expects the country’s CNG segment to grow manifold in the coming years.