Petronet plans retail foray; to set up LNG fuel outlets

The company is already in talks with oil marketing companies like IOC, HPCL and BPCL to enter into a tie up with them

Petronet LNG Ltd, the nation's largest importer of liquid gas, is set to foray into retail sales of liquefied natural gas (LNG) through fuel outlets across the country.

The company is already in talks with oil marketing companies (OMCs) like Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) to use their retail outlets to sell LNG atleast at 1000 retail outlets across the country within the next three years. This may include sharing of the facilities by OMCs through installing LNG dispensers and also running outlets operated by Petronet. 

“We are in talks with all the oil marketing companies regarding the use of its retail outlets. Our aim is to have at least 150,000 LNG trucks, which would turn out to be about 0.5-1.5 million tonnes of LNG in terms of quantity,” Prabhat Singh, chief executive officer and managing director of Petronet LNG told Business Standard on the side-lines of Petrotech 2016.    

This comes at a time when India launched its first LNG-driven bus in Kerala last month. Petronet’s retail foray plan works in tandem with Petroleum Minister Dharmendra Pradhan’s roadmap to shift towards cleaner fuel for vehicles.

 Petronet is also in talks with auto companies like Tata Motors and Ashok Leyland to introduce buses running on LNG. For its retail foray, the only hurdle before the company is a clearance that it has to get from the petroleum ministry to sell fuel through outlets. 

Singh added that at least 200,000 trucks that join India's fleet every year could run on LNG, as it would bring nearly 30-40 per cent price advantage compared to other fuels. According to the Paris Agreement to undertake intended nationally determined contributions' (INDCs), India had committed to reduce its carbon emissions by 33-35 per cent by 2030. “Shifting to these many LNG vehicles can help India meet at least 2.5 per cent of this commitment,” he added.

India’s target is to raise the use of gas in its energy mix to 15 per cent in three to four years from 6.5 per cent now, to curb emissions and cut its dependence on imported oil. According to Petronet, out of the total 78 million tonne of diesel that the country consumes every year, the share of trucks and busses comes to around 28 MT and hence a shift to cleaner gas fuel may turn advantageous for the environment.  

India is planning to increase its LNG import from 21.3 million tonne per annum (MTPA) to about 50 MTPA by 2022.

As a step towards going more greener, India is also building three more LNG terminals its east coast, The three new terminals will be located at Ennore, Kakinada and Dhamra ports on the east coast.