Adani Total Gas Limited (ATGL) is a joint venture (JV) company of the Adani Group and French company Total Energies. The Adani Group and Total Energies hold a 37.4 per cent stake each while a 25.2 per cent stake is owned by the public. ATGL also has a JV company with Indian Oil Corporation Limited, Indian Oil-Adani Gas Private Limited (IOAGPL). IOAGPL is expanding its city gas distribution (CGD) network in 19 geographical areas (GAs). ATGL has also invested in Smart Meters Technology Private Limited, wherein the company holds a 50 per cent stake and the balance stake is owned by GSEC Limited. Apart from this, ATGL has other subsidiaries – Adani TotalEnergies E-mobility Limited and Adani TotalEnergies Biomass Limited. ATGL aims to become a strong parent company, develop CGD infrastructure in the country, and focus on the adoption and development of other clean fuels like EV and compressed biogas (CBG). At a recent conference organised by Indian Infrastructure, Suresh Manglani, chief executive officer, ATGL, discussed the growth of the gas sector in India, government initiatives, challenges and the future outlook. Excerpts…
Government focus on the gas ecosystem
The gas sector in India has witnessed holistic policy reforms in the past few years. At present, gas suppliers have the complete freedom of marketing and pricing as far as new discoveries are concerned. In a bid to encourage the producers and ensure that high pressure and high temperature gas is utilised in the country, the government is also reviewing the gas pricing formula.
The CGD network will be significantly ramped up after the ninth, tenth and eleventh bidding rounds. Before the ninth bidding round, city gas was accessible to roughly 26 per cent of the population. However, with the conclusion of the eleventh bidding round, around 96 per cent of the population will be covered. India is witnessing an increased thrust on the improvement of CGD infrastructure and greater participation from CGD companies as well. In many GAs, as many as 13-14 bidders have participated to achieve authorisation in the eleventh bidding round. Many other reforms, including providing eight-year exclusivity, have also been undertaken in the CGD sector.
Another major reform for the CGD sector is giving the highest allocation priority to domestic piped natural gas (PNG) connections and compressed natural gas (CNG) stations. This has certainly augured well for the sector. India has progressed from 1,300 CNG stations some years back to nearly 5,000 CNG stations at present. Treading on similar lines, India has nearly 10 million PNG connections at present, up from 2.8 million connections in 2015. The government has been supportive of supplying gas to the CGD sector under the no-cut category. At present, the CGD sector is getting around 91 per cent gas in the administered pricing mechanism regime.
The government has undertaken another important reform in terms of launching the Sustainable Alternative Towards Affordable Transportation scheme and plans on setting up 5,000 CBG plants in the country by 2025. The government is also incentivising CBG in order to ensure that it gets comingled with CNG and PNG. On the pipeline side, the unified tariff regime has been introduced. Further, the country will see major pipeline expansion happening under the National Gas Grid, from 17,000-18,000 km at present to over 30,000 km. Meanwhile, several new liquefied natural gas terminals are coming up, which will add to India’s regasification capacity. The upstream, midstream and downstream segments are witnessing holistic development.
Focus on digital interventions
ATGL is continuously focusing on transforming from a customer care service to customer delight service. In a bid to achieve that, ATGL has launched a mobile application that showcases its complete bouquet of services. Customers can avail of a variety of services by use of this application. This includes registration for a new connection in vernacular language, name transfer, online bill payment, digitally signed bill generation, etc. Apart from this, all assets of ATGL have been mapped on the geographic information system thereby helping in the adoption of vehicle management and asset management systems.
Another major initiative taken by ATGL is SOUL, an overarching digitalisation programme planned by the company to enable the adoption of digital technology. Under this, ATGL aims to switch from an application-based world to a single-platform-based world, wherein all services provided by the company, be it supervisory control and data acquisition, automatic meter reading, or online bill generation, can be tapped under a single platform. Further, under SOUL, geographic mapping, a face recognition system, a vehicle management system and the My Adani mobile application will be integrated into one portal and distributed amongst role holders, thereby making monitoring and supervision easier for the company. At present, SOUL is a conceptual design and its implementation is expected soon. ATGL is hopeful that with the correct international and national expertise, SOUL will become a reality in the coming years and help in better management of gas infrastructure.
The gas sector (along with the oil sector) in the country has been facing challenging times because of the geopolitical issues arising on account of the Russia-Ukraine war and the fire outage at Freeport LNG. This has led to exorbitant price escalations in the sector, which have ultimately impacted gas suppliers and customers alike. The price rise has raised various concerns from end consumers. Key among these is the low incentive of switching to cleaner fuel. It is expected that the price increase is temporary and the sector will bounce back with the support and constructive approach of the concerned stakeholders – whether it is the Government of India, the state governments, policymakers or CGD companies.
Another issue that was faced by CGD companies sometime back was the cost escalation of commodities such as galvanised iron, steel, copper and brass. This, in turn, led to overruns in project cost. From a supply chain point of view, there are still some areas where India has to create more capacities. However, owing to the increasing thrust on the CGD sector due to government support, India has attracted vendors from international and national markets alike.
The road ahead
CGD infrastructure, being developed by ATGL and other gas companies, will enable and encourage future generations to switch to CNG and PNG. In the coming years, the country is expected to have nearly 20,000 CNG stations. ATGL plans to invest Rs 20 billion in the development of CGD infrastructure annually. Along with this, in the next few years, the company has planned capital expenditure of around Rs 200 billion. ATGL also plans to bring in the concept of customer delight centres. It will also move into the smart meter business in the coming years and has already invested in Smart Meters Technology Private Limited.
Backed by government support and planned robust infrastructure development, ATGL is optimistic about the overall growth of the CGD industry. Going forward, the CGD sector will play an imperative role in increasing the share of natural gas in the overall energy basket to 15 per cent. In the future, India can also explore the possibility of using gas in household heating, gas water geysers, etc., thereby promoting unconventional usage of gas as well.