Indraprastha Gas Ltd., distributor of natural gas in India’s capital New Delhi and its suburbs, is partnering with Japan’s Osaka Gas Co. to expand into international markets such as Myanmar and Sri Lanka.
“We plan to enter into an agreement with Osaka Gas this month,” ES Ranganathan, managing director of Indraprastha Gas, said in a phone interview on Friday. “Among other areas of cooperation, the tie-up will look at jointly starting city gas operations in neighboring countries.”
An overseas foray will boost Indraprastha Gas’s footprint and earnings as it faces increasing competition in the domestic market. India’s push for natural gas as a substitute for petroleum fuels has boosted its consumption and attracted several new players, intensifying competition and chipping away at the company’s growth prospects. These include refiners, power producers, and liquefied natural gas suppliers.
“We are better placed to start city gas projects in Myanmar,” Ranganathan said. “We are already in discussions and our team has also visited.”
Indraprastha Gas plans to use gas from some of the new onshore fields in Myanmar that are under development for supplies. In Sri Lanka, the partnership will look to source gas from the consortium led by Petronet LNG Ltd. which plans to build a gas imports terminal in the island nation. A spokesman at Osaka Gas declined to comment.
“While the Petronet consortium will manage LNG imports and re-gasification in Sri Lanka, we are interested in the downstream operations,” he said.
The tie-up comes amid a flurry of intense competition at the recent auction of city gas distribution contracts. Of the 86 cities up for grabs, there were around 400 bids, including those from billionaire Gautam Adani’s firms and India’s largest refiner Indian Oil Corp.
Indraprastha Gas managed only one license out of the 11 it has bid for, according to the website of Petroleum and Natural Gas Regulatory Board.
Indraprastha Gas also plans to use the partnership with Osaka Gas to bid for the next auction round of city gas projects in India, he said. India will announce the 10th round of city gas area auctions later this month, PNGRB Chairman Dinesh Kumar Sarraf said earlier this week.
Indraprastha Gas share price ended the week at Rs241.85, up Rs12.05, or 5.24%, from its previous close of Rs229.80 on the BSE.
The scrip opened at Rs232.90 and touched a high and low of Rs246.35 and Rs232.90, respectively. A total of 30,16,613 (NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs16,929.52cr.
The stock traded below its 200 DMA.