Absent landlords make Pune a tough CGD call

Vol 14, PW 18 (10 Mar 11) Midstream & Downstream

Pune is 560 metres above sea-level but that’s not why Maharashtra Natural Gas (MNGL), a GAIL joint venture with Bharat Petroleum, is finding it an ‘uphill task’ to pipe gas to households.

PETROWATCH learns MNGL teams have had little success winning customers for household piped gas connections in Pune, even though the company must provide 72,000 connections in the city under the five-year exclusive marketing license from India’s gas regulator. Only 2000 households have been connected to MNGL’s grid, which means it must provide 70,000 connections in the next four years to meet the target.

One would think this was easy in rapidly developing Pune where newly-constructed multi-storey apartment buildings are a common sight. “But most of these apartments are occupied by tenants who aren’t interested in piped gas because they don’t plan to be there permanently,” laments a senior MNGL source.

“Several thousand apartments are locked up; owned by investors waiting to sell and make a profit at the first opportunity. We’ll have to redouble our efforts to meet our target.

” Unlike domestic customers, industrial customers in and around Pune are more willing buyers for piped gas. By June this year MNGL expects to sign up its most high-profile company yet: the Volkswagen car factory at Chakan, on the outskirts of Pune.

Chakan was once famous as a wholesale onion market but is nowadays billed as India’s version of Detroit, home to car factories owned by the likes of Mercedes Benz and Mahindra & Mahindra, as well as the Bajaj motorcycle factory. “Volkswagen wants 20,000 cm/d of gas immediately,” we hear.

“Other factories in Chakan also want assured gas supplies to replace LPG, propane and other fuels; we could easily be selling 100,000 cm/d there soon.”

LNG Summit