Buoyed by rising consumption of natural gas, Mahanagar Gas (MGL), which retails the commodity for vehicles and households in Mumbai and adjoining areas, will start scouting for contracts by 2025-end.
“Right now, we are conformable with the existing arrangements. We have already added one contract. So, maybe by 2025-end or next financial year (FY26), we will look for more contracts,” MGL Managing Director Ashu Singhal told businessline on sidelines of the India Energy Week (IEW).
MGL supplies compressed natural gas (CNG) to around 10.97 lakh vehicles in Mumbai, Thane, Mira-Bhayander, Navi Mumbai, etc, through 366 stations. It also provides piped natural gas (PNG) to around 26.82 lakh households in the region.
More supplies
MGL has secured the availability of domestically-produced administered price mechanism (APM), high pressure high temperature (HPHT) and term Regasified LNG at applicable price for catering to CNG and PNG customers as well as through term contracts for other customers.
“Currently, on an average for 9M FY25, it’s around 4.05 million standard cubic meters per day (mscmd). But going forward, we are seeing a growth of 10 per cent, at least. So, 0.4 mscmd will be added every year. There is an expected reduction of APM of around 7 per cent. Effectively, we have to take every year almost 0.8 mscmd,” Singhal explained.
MGL is the sole authorised distributor of CNG and PNG in Mumbai, Thane urban including adjoining areas and Raigad. In its Q3FY25 earnings call, MGL management told analysts that post Q3 it has hiked Henry Hub contracts to almost 1.45 mscmd. Besides, a few bids of HPHT are also expected to happen, likely in April 2025 by Reliance Industries, of around 5-6 mscmd.
Gas consumption up
The company is witnessing an uptick in gas consumption. “For 9MFY25, we clocked a growth of 12 per cent (y-o-y). If we take into account three more months, we may get around 13-14 per cent,” Singhal noted.
“Main driver, as of now this year, is industrial and commercial, where we clocked 14 per cent (growth). We are adding more pipelines in new industrial and commercial areas. In CNG, we are promoting several schemes. Our CNG rates are very low, but more vehicles are getting added up. In CNG, we are seeing a growth of around 10 per cent,” he pointed out. In PNG, MGL added 3.3 lakh connections last year, the highest in India by a single entity, helping it to clock a growth of around 7-8 per cent (y-o-y).
“Overall, we are getting around 13 per cent this year (FY25)… Infrastructure is expanding. For instance, we used to have 25-30 stations every year, but this year we are adding 80, of which 15 are in our geographies and 30 in Unison Enviro (subsidiary),” Singhal opined.
MGL is also opening stations for LNG-powered heavy commercial vehicles. “We have opened a joint venture company for LNG retail outlets with Baidyanath LNG. One LNG station was already operational with MGL and one was recently started in Aurangabad by the JV. We already have 3-4 plots in pipeline. So maybe in 7-8 months, we will be commissioning another 3-4 stations in Maharashtra, and one in Madhya Pradesh,” he added.