Date:01/04/2005 URL: http://www.thehindubusinessline.com/2005/04/01/stories/2005040102201700.htm

Back Mahanagar Gas to expand presence — Plans Rs 250-cr capex

Our Bureau

Mumbai , March 31

MAHANAGAR Gas Ltd (MGL), a joint venture between British Gas and GAIL (India), plans to invest Rs 250 crore on expanding its presence in Maharashtra over the next two years.

The company plans to focus in areas on Mumbai's outskirts and also move into Maharashtra's interior districts, said Mr A.K. Purwaha, Managing Director, Mahanagar Gas. MGL on Thursday tied up with the Hero group's `Easy Bill', which will allow consumers to pay their gas bills at convenience stores in their localities.

MGL is focusing on reaching out to Navi Mumbai, Belapur and Pune. The company has studied the Pune and Nashik markets, Mr Purwaha said.

"We will partner BPCL and GAIL (India) for reaching natural gas to Pune. According to our survey, the piped gas market in Maharashtra is as big as 60 lakh households," he said.

MGL currently supplies piped gas to 2.25 lakh households in Mumbai and has the capacity to reach 5.5 lakh households. The company also plans to add 28 CNG stations in Mumbai to its existing chain of 104 outlets. Other plans include setting up 15 outlets in Thane.

According to Mr Gary Morgan, MGL's Director (Technical), the company's expansion plans will hinge on the availability of gas.

MGL receives close to 2 million cubic metres a day (mcmd) of natural gas from ONGC's Mumbai High fields. The company needs another 0.5 mcmd. Additional supplies can be contracted from Petronet LNG Ltd's Dahej terminal, but for this it will need the Dahej-Uran pipeline, which will, however, begin supplying gas to MGL only by the fourth quarter of 2006-07.

VAT may lower piped, CNG prices

HOUSEHOLD consumers and rickshaw-wallas, not to mention public transport buses, in Mumbai may have to pay less for compressed and piped natural gas, once the value added tax regime is in place.

According to the MGL Director (Technical), Mr Gary Morgan, the company will pass on the benefits of lower prices to consumers.

Currently, natural gas is taxed at 15 per cent.

This will come down to around 12.5 per cent, he said.