IGL to boost CAPEX to meet new CGD target

Vol 18, PW 1 (28 Aug 14) Midstream & Downstream

Despite promising the oil ministry on August 19 that it will add 150,000 new households to its city gas network this year, Indraprastha Gas’s (IGL) existing business plan is still based on achieving just 65,000 new connections.

Local BJP MPs eyeing upcoming local elections and oil minister Dharmendra Pradhan are putting pressure on IGL to rapidly increase the number of household connections, calling for IGL to double its total household gas connections this fiscal from 459,467 at present to nearly a million. But in reality IGL’s approved CAPEX plans outline just 15% growth this year in household connections.

“Any new targets will take time to work into a revised business plan,” says a company spokesman. IGL currently plans to invest Rs300cr ($50m) by March 31, 2015 in Delhi and the Delhi satellite towns of Ghaziabad and Greater Noida.

Another IGL source says it will add 50-km of steel pipeline and 750-km of Medium Density Polyethylene (MDPE) pipeline and set up nine standalone CNG stations and two CNG dispensers at stations owned by other oil companies. Bharat Petroleum and GAIL joint venture IGL will lay the pipelines along National Highway 24 and National Highway 91 to connect housing colonies in Delhi and factories in industrial hub Ghaziabad.

In 2013-14, IGL added 73,000 households against its internal target of 65,000 households.