Soon, Gujarat could have Asia's largest city gas distributor

Industry sources say, currently, China Resources Gas Group is the largest player in Asia in city gas distribution

Asia’s next largest city gas distribution player is likely to emerge from Gujarat soon. If the proposed consolidation of Gujarat Gas with GSPC Distribution Networks (GDNL), GSPC Gas, Gujarat Gas Financial Services (GFSL) and Gujarat Gas Trading Company (GTCL) gets cleared in the board meeting on Monday, the combined volume of the new entity could cross eight-million standard cubic metres a day (mscmd).

According to industry sources, currently, China Resources Gas Group is the largest player in Asia in city gas distribution with a volume of six mscmd.

Confirming the same, Saurabh Patel, minister of energy and petrochemicals, Gujarat government, said: “Yes, once consolidated, this would make us the largest city gas distribution player in Asia.”

Company sources say while GSPC Gas serves piped natural gas to households and compressed natural gas for domestic transport as well as industries across 11 districts at a volume of 5.5 mscmd, Gujarat Gas does around 2.5 mscmd in two districts.

"Irrespective of what the terms of proposed amalgamation or merger will be, if approved by the board, the new entity so formed will have a combined city gas distribution volume, which will be higher than the current largest player in Asia which is based out of China. The volume will be huge enough to have a dedicated LNG (liquefied natural gas) terminal for the new entity,” said a senior company official with Gujarat Gas.

According to an industry expert, the new combined volume could also offer possibilities of backward integration for the company in terms of its own LNG terminal. “Even otherwise, the parent group's gas grid can now be majorly used for captive purposes," the expert added.

Of their total individual volumes, while GSPC Gas serves 80 per cent of the 5.5 mscmd to industries, Gujarat Gas serves around 75 per cent of the 2.5 mscmd.

Board of Directors of Gujarat Gas Company Ltd will be meeting on April 21 to consider and approve the proposed consolidation of the company with GDNL, GSPC Gas, GFSL and GTCL by way of proposed amalgamation.