Torrent Gas acquires 3 firms to expand city gas distribution business
Torrent Gas, a part of the Torrent Pharma Group, is expanding its city gas distribution (CGD) business by acquiring three companies. This is in addition to the 13 geographical areas it won in bidding. The fresh acquisitions take the company’s reach to 16 geographical zones in 32 districts and seven states. The company also plans to invest around `10,000 crore in the business. The company has acquired Mahesh Gas in Pune from the Mahesh Group. It took over Siti Energy in Moradabad and Dholpur CGD from Essel Group. Mahesh Group could not start operations in Pune and exited the business with the sale to Torrent. Mahesh Gas is now an associate company of the Torrent Group and would operate under the brand name, Pune Natural Gas, to supply piped natural gas and compressed natural gas (PNG & CNG) in Pune district, said Utkarsh Bhat, VP, marketing, Torrent Power. Maharashtra Natural Gas Limited (MNGL) is handling the CGD business in Pune City area while the rest of Pune district would be handled by Torrent. The area authorised to Pune Natural Gas includes Ranjangaon, Baramati, Kurkumbh, Indapur, Pirangut, Wagholi, Saswad, Sanaswadi, Khed city, Rajgurunagar, Lonavala, Talegaon Phase II, Shirur, Shikrapur, Jejuri and other talukas of Pune district covering around 15,000 sq km. Pune district would see investments of `600-700 crore. Shridhar Tambrapani, ED, Torrent Gas, said as part of its phase-I network rollout plan, by March 31, 2021 the company intends to set-up over 50 CNG stations and release over one lakh residential PNG connections and also supply natural gas to industries in Pune district. The company will lay 1,800 inch km of gas pipeline network.
Capex plans set to impact OMC profits
INDIA’s three state-run oil marketing companies (OMC) stand the risk of taking substantial hits to profitability over the near term due to a sharp increase in planned capital expenditure (capex) in a weak demand environment. Analysts note that Indian Oil Corporation Ltd (IOCL), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) intend to increase their spending on projects by a whopping Rs 1100 billion over the next five years compared to the previous half-decade. The three OMCs have announced plans to invest a cumulative Rs 2900 billion between fiscal years 2020-24, against the Rs 1800 billion they spent between FY15-19. The sharp increase in capex is in line with the Centre’s recent diktat to central public sector enterprises (CPSE), with the finance ministry stating the ministry has held meeting with CPSE chiefs “in order to boost capital expenditure of the government and pump liquidity into the market to boost demand”. With the country’s gross domestic product growth slowing for five consecutive quarters — from 8 per cent in Q1, FY19 to just 5 per cent in Q1, FY20 — the government intends to use increased public sector undertaking (PSU) capex as a tool to boost flagging growth. However, for the three PSU OMCs, this could mean increasing pressure on profitability and a rise in debt levels. The delays in payment of direct benefit transfer (DBT) subsidy dues from the government is also expected to exacerbate the pressure on profit margins.
ONGC to invest Rs 130 billion in Assam to drill over 220 wells
The Oil and Natural Gas Corporation (ONGC) on September 11 announced it will invest more than Rs 130 billion in exploring oil and gas by drilling over 220 wells across Assam in the next five years. The company said in a statement that it has signed an MoU with the Assam government for enhancing its exploration and production activities in the state. This investment is being made for drilling more than 220 oil and gas wells across the state, it said. “ONGC is giving impetus to its activities in alignment with the prime minister’s call for reducing import by 10 per cent by 2022 and Northeast Hydrocarbon Vision 2030,” it added.
IOC, BPCL, NTPC among firms where govt stake to be cut to under 51%
The government proposes to offload substantial stake in at least 10 blue-chip companies this year to meet its higher disinvestment target, even though the exercise will bring down its holding in these state-run firms to below 51 per cent level, official sources said here on Wednesday. The minimum government holding required for an entity to qualify as a central public sector enterprise (CPSE) is 51 per cent. The sources said the Department of Investment and Public Asset Management (DIPAM) would soon start consultations with the Power, Petroleum and Heavy Industries Ministries to initiate the disinvestment process for some CPSEs under their administrative control where government stakes are slightly more than 51 per cent. Though this list of companies is yet to be finalized, the discussions are expected to revolve around companies such as Indian Oil Corporation (IOC), NTPC, Bharat Petroleum Corporation Ltd (BPCL), NALCO, GAIL India, Oil India Ltd (OIL), Engineers India Ltd (EIL), Power Grid Corporation (PGCIL) and Bharat Heavy Electricals (BHEL). In the majority of identified companies, the government’s current holding is just over 51 per cent. Only in BHEL and OIL, the government still holds just over 60 per cent stake. Presenting Budget 2019-20, Finance Minister Nirmala Sitharaman had said that the government could consider bringing down its stake in non-financial CPSEs to below 51 per cent on a case-by-case basis. The current fiscal’s disinvestment target of Rs 1.05 lakh crore has been increased from Rs 90,000 crore proposed in the Interim Budget 2019-20 in February. According to a source, the government is looking at companies that can command high market value and have strong financials and not in all such cases will majority stake be surrendered at one go. While the strategic sale will entail outright privatization in some CPSEs, the government’s direct holding can be brought down below 51 per cent with effective control continuing to remain with the government after taking into account the holding of other state-owned entities in such a divestment-bound CPSE. In 2018-19, the government raised Rs 84,972 crore from CPSE disinvestment, while in 2017-18, the figure was Rs 1,00,056 crore. “Strategic disinvestment of select CPSEs would continue to remain a priority of this government, Sitharaman had said. In all these oil and power CPSEs, government stake ranges from 52 per cent to 62 per cent. The inter-ministerial discussions will centre on the quantum of dilution, timing and method of stake paring, the sources said. Post the Budget presentation, Sitharaman had said: We did announce about government reducing holding (below 51 per cent), but yet there are two or three different government agencies, altogether, holding it over and above 51 per cent.” “We thought it should be opened up. Government still retains its ownership, but if you open it up, you are at least giving opportunity to, let us say, small retail purchasers,” she had said.
Vopak acquires 49% stake in Colombia’s sole LNG import facility
World’s largest independent tank storage company Vopak says it has bought a 49% stake in Colombia’s sole liquefied natural gas (LNG) import facility * “This is another growth step in our LNG portfolio and it fits very well in our ambitions to grow and diversify our service offering in LNG,” Vopak Chairman and CEO Eelco Hoekstra said in a statement, without providing an investment figure * The facility, also known as Sociedad Portuaria el Cayao, or SPEC, is located in Cartagena and consists of an LNG jetty, onshore infrastructure and a 9.2 kilometres gas pipeline which connects SPEC to the national gas grid * SPEC has long-term gas supply contracts with three local gas-fired power plants * Promigas a private company in the natural gas sector in Latin America owns the remaining 51% in SPEC