IOC to invest Rs 20,000 crore on city gas projects
BHUBANESWAR: Indian Oil Corporation (IOC), the country’s largest refiner, on Monday said that it aims to generate 15 per cent of its revenue from natural gas business in five years as it is planning an aggressive push in the business. The company, which bets big on gas business to complement its traditional oil refining and marketing business, plans to invest Rs 20,000 crore in city gas distribution (CGD) projects in next five to eight years. IOC, which owns a third of India’s oil refining capacity and has 44 per cent market share of fuel business, sees compressed natural gas (CNG) replacing some of the petrol and diesel consumed in vehicles today and LPG replaced by piped cooking gas in households. It wants to be in these businesses to maintain the market leadership position.
“We are going to invest at least Rs 20,000 crore for the CGD business in the projects we have won during the ninth round of bids,” said chairman Sanjiv Singh. The investment will mainly include setting up of CNG dispensing stations as well as laying pipelines in cities to transport gas to households for cooking purposes and industries for commercial use.
According to oil ministry figures, India needs to invest an estimated $100 billion in natural gas infrastructure by 2022, including setting up a gas grid across 228 cities. It may be seen that a chunk of this investment would be coming from the state oil companies. Earlier, the Petroleum and Natural Gas Regulatory Board had called for bids to develop city gas distribution infrastructure in 86 geographical areas. “We put in bids for 57 out of the 86 GAs put on offer in the ninth CGD bid round. Out of this, we expect to net 20 GAs, plus or minus one or two,” Singh noted.