ONGC to foray into city gas

The new unit may be aimed at making amends to the company letting go lucrative opportunities to enter gas business. Though being the country’s largest natural gas producer at around 55 million cubic meters per day,ONGC has virtually no presence in marketing of the environment friendly fuel.

All of its gas is marketed by state-owned GAIL India Ltd. It had let go marketing rights on gas from even newer fields as also of LNG imported by Petronet LNG Ltd.

NGC holds 12.5 per cent stake in Petronet LNG,the

nation’s largest liquefied natural gas importer. This is the

same as the stake held by GAIL and refiners Indian Oil Corp

and Bharat Petroleum Corp. While others market a share of LNG

imported by Petronet,ONGC had never demanded sale rights.

Also,plans to set up a LNG import facility at Mangalore were shelved. But under Sudhir Vasudeva,ONGC is renewing its focus on natural gas,whose share in India’s primary energy basket will almost double to 20 per cent by 2025.

ONGC is part of a consortium which is vying for British energy group BG’s stake in Gujarat Gas,which retails CNG to automobiles and piped cooking gas to households in cities like Ahmedabad and Surat in Gujarat.

Officials said ONGC Gas would bid for city gas distribution CGD licences and explore possibility of setting up a LNG import facility. Also,it may import LNG at one of the terminals in the country and market the fuel to consumers directly.

ONGC believes that the nation’s dependency on imported LNG,now estimated at 30 per cent,would rise as production of older domestic fields falls.

ONGC had few months back appointed A T Kearney to chart out its city gas foray. A T Kearney suggested setting up of ONGC Gas for bidding for licence to retail CNG to automobiles and piped cooking gas to households,they said.

Gas business would help the firm de-risk its exploration business with oil and gas output from majority of its old and ageing existing field slated to hit a decline soon.