BG identifies three cities for CGD expansion

Vol 9, PW 13 (06 Oct 05) News in Brief

British Gas has identified three cities in southern India for a possible expansion of its City Gas Distribution business.

This report learns the three cities are Hyderabad, Bangalore and Chennai, which are all fast developing as industrial and commercial hubs. BG estimates that each of the cities could initially consume between 100,000-cm/d and 200,000-cm/d.

The CGD business grows slowly because it takes time to set up retail pipeline networks in cities, we are told. You start with small quantities and then gradually build up once the pipeline network and CNG stations are constructed.

BG is keen to replicate the success of its CGD business in Gujarat through subsidiary Gujarat Gas and its JV in Mumbai with GAIL and the Maharashtra government: Mahanagar Gas. BG hopes to source gas from Reliance or Gujarat Petroleum through a possible tap-off point near Hyderabad.

GSPC plans to land first gas by end 2007 and Reliance by mid-2008.