BPCL chalks out aggressive retail gas strategy

Vol 19, PW 24 (11 Aug 16) Midstream & Downstream

Bharat Petroleum has adopted a radical new strategy for its gas retail business that it hopes will overturn a perception it isn't a serious player.

Fed up with joint venture partners GAIL and GSPC, the state-owned Mumbai-based refiner wants credit for its own gas retail success. "Under our new strategy," says a BPCL source, "we will bid alone in future CGD licensing rounds." Under the new strategy expect BPCL to bid aggressively for upcoming areas in Haryana, Uttar Pradesh, Punjab, Himachal Pradesh and Uttarakhand.

"City gas distribution is the future," adds another BPCL source, "and we want to be there!" Until now BPCL's presence in this growing sector has been as GAIL's partner in Delhi-based Indraprastha Gas, Pune-based Maharashtra Natural Gas (MNGL) and Kanpur-based Central UP Gas. In Gujarat it partners GSPC in Sabarmati Gas.

But despite BPCL's presence in the sector since the 1990s, IGL is widely perceived as a GAIL company and Sabarmati as a GSPC company. Mounting pressure from the Narendra Modi administration on state-owned companies to get more involved is driving BPCL's drive to promote itself as an independent gas player.

Some credit also goes to company chairman S. Varadarajan who retires on September 30.

"If random companies like IRM Energy and Unison Enviro can bid aggressively," says a LNG consultant, "then you can expect BPCL to also bid aggressively."