IGL will explore international markets for business expansion: MD Chatiwal

For FY26, we are planning capex of around Rs 2,000 crore which includes around Rs 1,400 crore in the core business and Rs 600 crore for diversification in renewables, CBG

City gas distribution (CGD) major Indraprastha Gas Limited (IGL) will pass on the benefits of unified tariff regulation and tax reliefs in domestic piped natural gas (PNG) prices to consumers, said managing director (MD) Kamal Kishore Chatiwal, in an interview with Shubhangi Mathur in Delhi. The company said it has 12 geographical areas (GAs) in India across 32 districts in four states. Edited excerpts:

 

What is IGL’s capital expenditure plan for the current financial year?

 

For FY26, we are planning a capex of around ₹2,000 crore which includes around ₹1,400 crore for core business and ₹600 crore for diversification in renewables, compressed biogas (CBG) and liquefied natural gas (LNG). We spent around ₹1,200-1,300 crore last year. The higher capex this year is because we are spending more on diversification and looking at acquisitions. We are also looking at areas internationally for core business expansion. In India, bidding rounds are over and licenses are allotted for all of the areas.

 

Are you reviewing CNG and PNG prices for consumers?

 

Our prices have been stable for more than two years. We will definitely pass on the benefits of tariff regulations and taxations, as and when they are implemented. You can expect some relief in domestic PNG prices. Wherever there is headroom, we will also pass on benefits for compressed natural gas (CNG). We had not increased CNG prices in Delhi to maintain market share and consumer confidence even when the administered price mechanism (APM) gas allocation was cut.

 

How do you plan to navigate lower APM gas allocation for CGD companies?

 

APM gas share is gradually going to come down to 5-10 per cent in total domestic production. We are getting prepared for that. We are bringing in more operational efficiency, capex efficiency while competing with conventional fuels. Going forward, APM gas prices and international prices will be aligned. We are in discussion with companies to source Regasified-LNG at the price of APM. Currently, APM gas accounts for around 35-36 per cent of our kitty, new well gas is around 10 per cent and 50 per cent is imported gas.

 

Which sector is expected to drive gas demand in India?

 

India’s demand in the fertiliser sector is not expected to grow sharply. Power sector consumption fluctuates with respect to peak demand. Meanwhile, most of the refineries have already switched to natural gas wherever they could. The only sector with visible strong growth is CGD because new GAs are coming up. All the 307 geographies have been awarded. In the next two-three years, CGD will become the biggest gas consuming sector.

 

What is your stand on the proposal to end market exclusivity for CNG infrastructure?

 

IGL has sought certain clarifications and given some suggestions to the Petroleum and Natural Gas Regulatory Board (PNGRB) in this regard. Moreover, the exclusivity matter is pending before courts. Stakeholders must await the decision of the court before going ahead with implementation.

 

Growth in LNG as a transport fuel has been limited. What is the key reason?

 

Critical number of LNG stations need to be set up. CGD entities should be able to provide one station at every 500 kilometres, especially on major highways. Consumers will then have confidence to invest in trucks. The success story of CNG in the National Capital Region (NCR) can be replicated in LNG. We are setting up three LNG stations in the NCR region. One of them is ready to be commissioned while the other two will be functional in the next two-three months. We plan to set up around 50 LNG stations by 2030.

 

Government mandated CBG blending in natural gas. How has CBG adoption played out for IGL?

 

The official CBG blending target in natural gas is 5 per cent by FY29. We are targeting 10 per cent blending for us. We have also commissioned one CBG plant in Delhi.

 

Do you foresee similar resistance for CBG blending as witnessed in ethanol blending with petrol?

 

Ethanol and petrol are different molecules but with CBG the molecule remains the same — methane. The question is only about the purity of methane. We are ensuring a minimum 97-98 per cent purity of methane. So, we have not faced resistance in blending CBG with gas.

 

What are IGL’s plans for expansion in renewables?

 

We do not want to be a big player in renewables. Our main focus is on improving operational efficiency through renewables.