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Natural Gas - World's Best Bet For Future

IndianOil-Adani Gas Pvt. Ltd.

7. Affordable and Clean Energy 9. Industry, Innovation and Infrastructure 11. Sustainable Cities and Communities 13. Climate Action

Overview

Energy needs in India are majorly met by fossil fuels which include petrol, diesel, LPG and for industries, it is furnace oil, LDO, Bitumen. Considering the excess use of fossil fuel and with the aim of reducing the dependency on these fuels, the Government of India some 25 years ago in 1990’s gave a push to promote the clean energy sector by establishing city gas distribution companies whose mandate was to supply clean energy in the form of Natural Gas. However, this was limited to only two cities of Mumbai and Delhi controlled by 02 companies. With the emergence of the Petroleum and Natural Gas Regulatory Board (PNGRB), in the year 2006 and subsequent bidding rounds held till 2018, nearly 228 Geographical Areas (GA's) comprising of 402 districts have been awarded till date to various public and private companies, which means around 75% of India's population now will have access to clean energy. IndianOil-Adani Gas Pvt Ltd. (IOAGPL) is one of the major entities in the city gas distribution industry which has been authorized to supply clean, economical, and safe natural gas fuel to domestic, commercial, and industrial customers through a network of underground pipelines to over 19 GA's spanning over 12 states and 3 Union Territories in India.

Authors

Yash Prabhudessai

Yash Prabhudessai

Mohit Khemka

Mohit Khemka

Shivani Redkar

Shivani Redkar

Harshal Kerkar

Harshal Kerkar

Raghunath Prabhudesai

Raghunath Prabhudesai

School

Goa Institute of Management

Goa Institute of Management

Professor

Divya Singhal

Divya Singhal

Innovation

In India, day-to-day energy needs for all households and also the commercial outlets are dependent on Liquified Petroleum Gas (LPG) in the cylinder. However, due to frequent fluctuation in prices of LPG cylinders and transportation problems associated with it created a great inconvenience to the consumers. With the introduction of the city gas distribution industry, IOAGPL in the year 2013 started its operations and project to build an underground natural gas pipeline network in various GAs across India to provide Piped Natural Gas (PNG) to domestic, commercial & industries and Compressed Natural Gas (CNG) as fuel to vehicles. The supply of gas through a medium-density polyethylene pipeline network with a metering facility helps in providing 24*7 supply of gas to its customers. The customers get charged for the quantity they use. Also, in this process gas is utilized optimally thus minimizing wastage unlike in LPG. Safety plays the major role in PNG since natural gas is lighter than air and dissipates in the air, so in case of any leakage there are very few chances of any untoward incident of fire unlike leakage associated with LPG cylinder wherein LPG is heavier than air accumulate above the ground and possess a higher risk of explosion.

Natural Gas - World's Best Bet For Future

CEO of IndianOil-Adani Gas Pvt. Ltd. Mr Rajiv Sikka flagging off Auto rally in Udham Singh Nagar, UP

Inspiration

The major inspiration for IOAGPL to enter the sector of city gas distribution was mainly the product and services it could provide. As natural gas is a methane-based product is considered to be the fuel of the future whose carbon emissions are significantly lower than petrol, diesel, and other associated butane-propane based fuels and therefore has the potential to be used as an alternative, IOAGPL thus tapped upon this opportunity to serve public and nation at large by providing alternative fuel, with an aim to change the consumer behaviour pattern which is currently heavily dependent on petroleum products thus helping the company to create visibility for their brand by acting in a socially responsible manner which is the need of the hour. This product also gave the company confidence in terms of earning revenue for long term considering the availability and accessibility of the fuel and also considering its positive impact on the environment.

Overall impact

With IOAGPL exploring into the city gas distribution through PNG and CNG has helped the households not only in an efficient transportation of gas but also in terms of monetary gains.

Affordable and clean Energy: Here, the consumers are directly in contact with the company thus cutting out on the distributor franchisee model by promoting digital transactions thus giving highest priority to customer convenience. The uninterrupted supply provided by IOAGPL has a perfect track record of 100% reliability in its gas supply assuring continuous and reliable supply of cooking gas which is 94% methane based green fuel. Contradictory to the Direct Benefit Transfer for LPG Consumer (DBTL) Handbook payment method, IOAGPL provides its consumers the benefit of paying after usage based on the meter readings thus allowing customers to pay for the exact quantity they consume at affordable price thus reducing consumer expenses on cooking gas significantly. Also, IOAGPL has collaborated with Paytm for easy and convenient access of payment options. The consumers have access to various schemes thus benefitting them economically. Also, CNG stations developed by IOAGPL helps in contributing majorly in providing natural gas as a fuel for vehicles which is considered as a clean energy at affordable price compared to other fossil fuels such as petrol and diesel thus providing relief to vast section of society on rising and fluctuating oil prices and also contributing heavily towards protecting the environment.

Industry, Innovation and Infrastructure: Using PNG distribution gas facility eliminates the tedious routine of checking the cylinder for refill and suspected leakage thus eliminating the task of booking LPG cylinder time and again.

Project execution to build pipeline network in all the awarded GA’s of IOAGPL to provide clean energy is a stepping stone for the development of the gas-based economy and sustainable cities. “The project activities are progressing at fast pace and considering the current progress IOAGPL in 6 years of operations has developed around 155 Nos of CNG station and is catering PNG to 75,000 households and over 300 Nos of industrial & commercial units across India” says Mr. Rajiv Sikka, CEO IndianOil-Adani Gas Pvt. Ltd.

Considering the business operation of the IOAGPL it is directly and indirectly focussing on 4 out of 17 SDGs: ‘Affordable and clean energy’, ‘Industry, Innovation and Infrastructure’, ‘sustainable cities and communities’, ‘Climate action’ with major emphasis is on providing affordable and clean energy.


Business benefit

IOAGPL started its operations in city gas distribution in the year 2013 in 02 Nos of GA’s awarded in round 4 bidding conducted by Petroleum and natural gas regulatory board (PNGRB) to over 19 Nos GA’S by the end of 10Th round of bidding. Since its inception, IOAGPL has grown significantly and is currently handling the gas volume of 7 lakh SCM per day and is confident of growing at a CAGR of 20% for the next couple of years. IOAGPL mainly earns its revenue from sales of gas through its pipeline to domestic, commercial, and industrial customers and by supplying CNG as fuel for vehicles. IOAGPL is expanding its network at a rapid pace and aims to become India’s fastest-growing city gas distribution in the next few years. According to Mr. Rajiv Sikka “Company has faced 2 waves of Covid-19 and has been largely unaffected but has shown tremendous growth in sales in these 2 years with 70,000 SCM per day in 2019 to 7 lakh SCM per day, increase of 10 times in volume”.


Social and environmental benefit

CNG (Compressed Natural Gas) the fuel provided by IOAGPL is a 94% methane-based product, its carbon emissions are 20-30% less compared to other fuels and contain significantly fewer pollutants than conventional liquid fuels. It also produces 95% fewer tailpipe emissions than petroleum products

PNG (Piped Natural Gas) is constantly fed into the system so there is no hassle of handling and refiling like cylinders, no storage is required, and is safe to use. It is distributed directly through pipelines at premises. Households are able to use piped gas services 24*7 without any disturbance. The application of the city gas distribution facility helps in saving the environment as it is a clean and user-friendly type of energy. It provides higher savings as compared to LPG also, the pipeline delivery comparatively immunizes against inflation of transportation costs.

Interview

Mr Rajiv Sikka, CEO

Photo of interviewee

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IndianOil-Adani Gas Pvt. Ltd.

IndianOil-Adani Gas Pvt. Ltd.

Noida, UP, Goa, Kerala, Karnataka, Haryana, West Bengal, Bihar, Chandigarh, Daman, Himachal Pradesh, Mahe, IN

Business Website: https://www.ioagpl.com

Year Founded: 2013

Number of Employees: 201 to 500

IndianOil-Adani Gas Pvt. Ltd. (IOAGPL) is a joint venture between Indian Oil Corporation Limited – A Maharatna Company of Government of India – and Adani Gas Limited – a city gas distribution company that is a part of India’s leading integrated business conglomerate, Adani Group – joined hands to contribute towards Government of India’s vision of a gas-based economy. IOAGPL is laying the infrastructure for the development of City Gas Distribution Networks to supply the Piped Natural Gas (PNG) to the Industrial, Commercial, and Domestic (residential) segments and Compressed Natural Gas (CNG) to the transport sector.