ONGC to hire consultant for city gas distribution

Oil and Natural Gas Corporation (ONGC) today announced it would hire a consultant for its plan to enter city gas distribution, keeping in view the high potential of growth. The company also said it would be looking for a collaboration for the venture.

“The city gas distribution project has very huge potential of growth. We want to hire a consultant before venturing into this business,” said Chairman and Managing Director R S Sharma at the company’s headquarters here on the occasion of its 54th foundation day.

ONGC sources told Business Standard the company was looking for a tie-up for the city distribution business. Top officials have held talks with Hindustan Petroleum (HPCL) for future tie-ups. Sharma also said he would be talking to the CMD of Gas Authority of India Ltd (GAIL) on Tuesday.

The sources said since a host of public sector undertakings and private players like HPCL, GAIL and Adani had already entered the business, ONGC, which itself produced gas, was keen to jump on the bandwagon, as 80 to 90 per cent of the market in the country remained untapped. ONGC’s Director (Offshore) Sudhir Vasudev made a forceful presentation on Wednesday at New Delhi in this regard. “Yes, we should enter into this business. We have a lot of gas and anybody would like to tie-up with us,” said Vasudev.

The sources also said ONGC would put up the issue before its Board and take a formal clearance from the regulatory authority once it gets a positive report from the consultant. According to an estimate, gas consumption in India as a proportion of the total energy basket, is just nine per cent, while the global average is 24 per cent. ONGC already has an agreement with GAIL for a gas pipeline network.

Sharma also said the oil giant would start its ambitious Coal Bed Methane (CBM) project this year, as part of the company’s policy on exploring alternative sources of energy. The company would also start an Underground Coal Gassification (UCG) project in 2010, he said.

Sharma said the company is also venturing into uranium exploration and has already signed an agreement with Uranium Corporation of India Ltd in this regard.

On the overall performance, Sharma expressed satisfaction and said the company has remained unaffected by the global downturn and continues to remain the Number 1 PSU in the country.