Bhagyanagar Gas gears up to expand activity

Bhagyanagar Gas Limited (BGL), engaged in marketing of compressed natural gas (CNG) in Hyderabad and Vijayawada, has geared up to expand its activity following commencement of gas production from the Krishna-Godavari basin by Reliance Industries (RIL).

BGL, a joint venture of HPCL, GAIL (India) Limited, Kakinada Seaports Private Limited and the Andhra Pradesh Industrial Development Corporation, expects to achieve financial closure during this year.

“Now we have come to a stage where the project will take off,” BGL’s managing director, A Viswanadha Sarma, told Business Standard.

Established five years ago on the lines of Delhi-based Indraprastha Gas Limited, BGL is currently operating four CNG stations in Vijayawada and three in Hyderabad.

The Ministry of Petroleum had authorised BGL to take up city gas distribution in Hyderabad before the constitution of the Petroleum and Natural Gas Regulatory Board (PNGRB). “Now we are in discussion with PNGRB to get its formal consent in this regard,” Sarma said, adding the company was expecting to obtain the board's clearance in the next 2-3 months.

According to Sarma, BGL will start building the necessary infrastructure for the piped gas supply in the state capital once PNGRB gives its consent. The gas distribution will take off in Hyderabad fast as the RIL’s East-West pipeline extending from Kakinada in AP to Baruch in Gujarat crosses the city near Shamirpet. “From Shamirpet, we need to lay the internal infrastructure in the city, which could be completed over a period of five years.”

As per the preliminary estimates, the infrastructure needed for the piped gas distribution in Hyderabad would cost up to Rs 3,500 crore and around Rs 600 crore for a similar set up in Vijayawada, he said.

The Andhra Pradesh Industrial Infrastructure Corporation (APIIC) is willing to allot 2 acres of land at Shamirpet on the city outskirts where BGL will build a recovery terminal and compression station.

At present, BGL is getting CNG to its auto filling stations in Hyderabad by caskets. Once, the Shamirpet facility is completed, the company will lay pipelines to its filling stations first before embarking upon domestic gas supply.

“It is going to be a green era. In the next five years, Hyderabad will be like Delhi as far as CNG distribution is concerned,” Sarma added.