'CNG back in the game' for Adani in Ahmedabad

Vol 17, PW 23 (03 Jul 14) Midstream & Downstream

India’s largest private gas retailer Adani Gas plans to invest Rs100cr ($17m) this year to develop infrastructure in Gujarat's largest city Ahmedabad and Vadodara, seat of the Gaekwad princes.

Adani, which has been working in the two cities since 2003-04, sold Rs1100cr ($183m) of gas there last year (2013), accounting for most of its revenue. This year sales revenue is likely to soar by 15% to around Rs1250cr ($208m) driven by 24% sales volume growth.

Adani tells us Rs30cr ($5m) will be spent on setting up to eight CNG stations in Ahmedabad to add to 54 it already has. Another Rs30cr will be spent on connecting 35,000 Ahmedabad homes.

Most of the rest will be spent on laying 10-km of steel pipeline and 25-km of plastic (MDPE) pipeline. Adani explains most of the investment will be in Ahmedabad, as growth in Vadodara is hindered by the Vadodara Municipal Corporation's (VMC's) JV with GAIL.

“Because VMC runs the local administration they’ve restricted us to a narrow area,” says Adani. On the bright side, Adani is receiving domestic gas since February this year for sale to homes and as CNG.

“Earlier we were selling CNG at Rs68/kg and the growth outlook was gloomy," adds Adani. "But with domestic gas supplies our CNG price is down to around Rs46.75/kg.

CNG is back in the game.”