State-run Bharat Petroleum Corporation (BPCL) is bullish on doubling its gas business in the next five years as India increases focus on liquefied natural gas (LNG) to transition towards a green energy ecosystem.
In view of the growing demand for natural gas, particularly in city gas distribution (CGD), the oil marketing company (OMC) will sign a 5-year LNG supply deal with Abu Dhabi National Oil Company (ADNOC), for around “0.45 million tonnes per annum” on the sidelines of the ongoing India Energy Week (IEW) 2025.
“Our gas business is around 4 per cent and we want to take it to at least 8-9 per cent. Accordingly, we have started investing huge amount of money in CGD business. We are going to invest around ₹25,000 crore in next five years on gas business, not only for CNG, even for LNG,” BPCL Director (Finance) VRK Gupta told businessline.
BPCL is also bullish on the potential for LNG trucks, which has the potential to replace diesel for heavy duty long haul trucking, he added.
Responding to a query on the CGD business during BPCL’s Q3FY25 investor call, Gupta said, “We are exploring certain long-term contracts… Whatever shortfall of APM gas, we have to meet through the open market. So we are exploring some long-term deals, either Henry Hub-based or some other index-based cargo share planning.”
BPCL has already set up 2 RLNG (regasified LNG) stations and has plans to set up 10 more along strategic highways, which will cost around ₹150-200 crore, he had said then.
Rationale
On growing focus on natural gas, Gupta explained that the world energy consumption, on an average, is growing around 1.2-1.3 per cent, whereas India is likely to grow at 4-4.5 per cent.
India is consuming around 5.4-5.5 million barrels per day (mb/d), which is expected to grow to 8.5 mb/d by 2040, Gupta said, adding, “We don’t have this much energy in India. What are the alternatives? One is renewables and EVs, which takes time. Second is green hydrogen, which today is the costliest. Third option is LNG. So everyone is trying to focus on LNG, and BPCL is also focusing on LNG, which has lesser CO2 emissions.”