Hindustan Petroleum to invest ₹10,000 cr on natural gas value chain

Hindustan Petroleum Corporation Ltd (HPCL) will invest ₹10,000 crores to produce an end-to-end natural gas value chain, told an official from the company. The investment will be developed over the next five years, he added.

“We are seeking to create a value chain from end to end, right from liquefied natural gas (LNG) getting to LNG conversion to gas as well as LNG transportation. We have got a plan of around ₹10,000 crores of investment in different LNG-related facilities, through a combination of joint ventures or private participation,” Mukesh Kumar Surana, chairman and managing director, HPCL, said analysts.

Currently, HPCL is fixing up 11 LNG stations and is in discussions with auto manufacturers to assist them in developing facilities for LNG-based trucks and buses.

The company has also signed a project for around ₹100 crores to have a corridor, which can be done along with other oil plants marketing companies to use LNG as a fuel, in interest to CNG.

HPCL told it is also operating on a parallel mode of LNG and HCNG (Hydrogen Compressed Natural Gas). The company exists a stake in the infrastructure for LNG gasification terminal for cross-country pipelines for transportation of LNG.

“Now whether its biofuel, whether it’s renewable, gas, or whether it’s electric, we are operating on all the floors, because finally, our business is to implement mobility and to cater to the energy requirements of the customers. And the means–we will use as it develops,” added Surana.

The third-largest state-run oil marketing company is also developing a 5 million metric tonnes per annum LNG regasification terminal at Chhara in Gujarat through joint venture company, HPCL Shapoorji Energy Pvt. Ltd in interest to participating in the development of three cross-country natural gas pipelines (Mehsana to Bathinda, Bathinda to Srinagar, and Mallavaram to Bhilwara) through joint venture companies viz. GSPL India Gasnet Limited and GSPL India Transco Ltd.

With natural gas remaining touted as the fuel of the future due to its clean-burning properties, India intends to increase the share of natural gas in its energy mix from 6% to 15% over the next decade, and energy companies are increasing their ante in the game.

Other oil marketing companies, including Indian Oil Corporation Ltd (IOCL) and Bharat Petroleum Corporation Ltd (BPCL), are also bullish on the natural gas segment.

IOCL has established itself as the second-largest Company in natural gas in India with a license to retail CNG and piped cooking gas in 40 Geographical Areas.

IOCL is also aggressively supporting the use of compressed biogas, 2-G ethanol, and biodiesel produced from utilized cooking oil, besides mixing its refinery processes with biofuels production.

BPCL, which is already in many segments of natural gas sales and supply, has been increasing its gas business over the past few years.

It is a co-promoter of Petronet LNG Ltd, with Indian Oil Corp. Ltd, Oil and Natural Gas Corp. Ltd and Gail (India) Ltd and also a co-promoter of four city gas distribution (CGD) companies—Indraprastha Gas Ltd in Delhi with Gail; Sabarmati Gas Ltd in Gujarat with Gujarat State Petroleum Corp. Ltd; Maharashtra Natural Gas Ltd and Central U.P. Gas Ltd with Gail.

The company has been shipping LNG and fulfilling it to customers in the fertilizer, power, city gas distribution, steel, and other industries over the country. BPCL also markets LNG by tank trucks from Dahej to some customers