HPCL, Gail in race for Greater Calcutta Gas Co

MUMBAI The state-owned Hindustan Petroleum Corporation (HPCL) is in advanced stage of discussions to acquire the ailing Greater Calcutta Gas Supply Corporation (GCGSC), a government of West Bengal undertaking.

HPCL’s move is aimed at entering the natural gas business in the eastern part of the country. Even the state-owned utility gas carrier Gail is said to be in the race to acquire GCGSC and had completed due diligence for the same.
“We have engaged a consultant to conduct due diligence of this opportunity. The techno-economic evaluation of this opportunity is in progress,” HPCL’s director, marketing, S Roy Choudhury told ET. The networth of GCGSC is pegged at over Rs 50 crore.

GCGSC boasts of a distribution network of 700 km in Kolkata and Howrah, two gas holders with compressor house and a nitrogen plant.

At present, GCGSC supplies coal gas produced at Dankuni complex of Coal India (CIL) and Durgapur Projects (DPL) through its distribution network in Kolkata and Howrah to the domestic, commercial and industrial consumers. The company supplies gas to over 6,000 domestic consumers and over 500 industrial units.

The company also plans to supply imported natural gas and coal bed methane (CBM) gas to its consumers. The company is in talks with Bangladesh firms to procure gas.

The WB government wants to do away with the defunct GCGSC because of its mounting losses of Rs 2-3 crore per annum on an annual turnover of Rs 13 to 14 crore.

The corporation is making losses because of the administered prices of coal gas by the government of West Bengal.

“If we can do away with the administered price mechanism and sell gas market prices, we can make profits on our own. There is demand from all the sectors as our gas is cheaper as compared to furnace oil for industrial use and LPG if compared to domestic use,” says a GCGSC senior official. The company has over 700 employees with technical expertise to design and execute pipeline erection.