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British Gas In India

British Gas, after buying Enron’s offshore assets, is ready for action in India. A look at its plans.

Plans galore

British Gas moved the needle in India in terms of investments when it acquired the offshore assets of Enron for Rs 1,680 crore ($350 million) in February this year, taking its investments in India up to Rs 2,400 crore ($500 million).

Now, the global gas major is not only playing an active role in New Exploration and Licensing Policy (NELP)-III, but also plans to invest $1 billion (Rs 4,800 crore) over the next 3-5 years in the country.

The aim? To become a major gas player in India.

Over the next few years, Britain BG group would invest around Rs 1,680 crore ($350 million) in doubling production from 180 million standard cubic feet (mscf) a day to 360 mscf a day at its Panna-Mukta-Tapti gas field, which is located in the Gulf of Cambay. British Gas had acquired this asset from Enron, besides another gas field - CB-OF-1 - also located in the Gulf of Cambay.

BG is also looking at NELP III, for which the bids will close on August 28. The company, which is one of the largest foreign investors in India's oil and gas sector along with Cairn Energy, did not bid for any exploration acreage in the first two rounds of the New Exploration Licensing Policy.

Besides this, the global gas major also plans to invest around Rs 120 crore ($25 million) in its liquified natural gas business/compressed natural gas business. At present, British Gas supplies CNG in Mumbai, through a 50:50 joint venture known as Maharashtra Gas Ltd (MGL). Gas Authority of India Ltd is its other partner in MGL. It now plans to add around 20 new filling stations in Mumbai this year.

“This is a big effort as its difficult to find the right sites and get approvals,” says Nigel Shaw, CEO, BG India Private Ltd.

BG India also has a 65-per cent stake in Gujarat Gas Ltd. It is now exploring the possibility of supplying CNG in Kolkata and Hyderabad. “In Kolkata, we can obtain gas from Bangladesh. In Hyderabad, it can be obtained from the Krishna-Godavari basin,” adds Shaw. The company is holding preliminary talks with the state authorities on the matter.

Globally, British Gas is present in four sectors - liquified natural gas (LNG), exploration and production (E&P), power and transmission and distribution(T&D). However, in India, British Gas is concentration on LNG, E&P and T&D and has no plans, as of now, to get into the power sector.

“We have studied the power sector in India and feel that the key issue is whether a generator would at all get paid for the energy that it supplies," says Shaw, referring to the financial health of the state electricity boards (SEBs). "However, once the government undertakes power reforms in a big way, we could give it a thought," he adds.

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