No interest in 40% sale of Bhagyanagar Gas
GAIL and Hindustan Petroleum might find it harder than they think finding a 40% partner for their Hyderabad-based JV Bhagyanagar Gas.
PETROWATCH learns GAIL and HPCL hired KPMG in mid-August to help identify a partner for gas retailer Bhagyanagar which sells CNG for buses, cars and auto rickshaws in Hyderabad, Vijayawada and Kakinada. “There will be lots of interest in buying a stake,” claims a senior Bhagyanagar source.
Others are less sure. “Bhagyanagar just wants somebody to pump money into the company,” says a source at a firm which carried out a due diligence on Bhagyanagar in August with a view to buying the 40% on offer.
Bhagyanagar admits expansion plans have been held up by problems sourcing gas. “We buy 100,000 cm/d from ONGC (allocated by the oil ministry) and consume all of it,” he says.
“Most of this gas is sold as CNG from 30 stations. Any expansion will depend on the availability of (subsidised) gas from a new supply.
” In July last year (2012) Bhagyanagar thought about buying R-LNG but was forced to shelve plans due to high prices. “Bhagyanagar sells CNG at Rs54/kg ($0.80) in Hyderabad,” we hear.
“R-LNG sold as CNG would cost more than Rs70/kg ($1.04). Who would buy CNG at that price” HPCL and GAIL each hold 22.5% and the Andhra Pradesh Industrial Infrastructure Corporation holds 15%.