Energising Possibilities for Atmanirbhar Bharat

GAIL is one of the global leaders in natural gas value-chain. It is also called the Maharatna. What is the backbone of GAIL?

With massive gas finds on the western coast, GAIL (India) Limited was set up in 1984 as a public sector undertaking to transport, process, and market natural gas for economic use. From its humble beginning as a gas transportation company, GAIL today has become the largest integrated Natural Gas Marketing & Transportation Company in the country. GAIL’s strength emanates from its presence in the entire gas value chain with a vast network of Natural Gas pipelines, Gas & LNG marketing capabilities, and diversified petrochemicals portfolio. Aligned itself with GoI priorities, GAIL has adopted a two-pronged approach towards growth. The approach includes physical network expansion and downstream market development through customer focus to move towards a gas-based economy. Over the last four decades, India’s gas infrastructure expanded over ten times from 1700 KM to 18,000 KM of cross-country pipelines and is expected to soon reach over 34,000 KM to link other gas sources with all parts of the country including the North-Eastern states. GAIL’s Natural Gas pipeline network presently stretches almost 13,400 km, with another 6,300 km under various stages of completion. GAIL’s gas network has touched almost every corner of the country, transporting environment-friendly fuel to kitchens, vehicles, and industries, helping India’s gas market to expand rapidly. GAIL’s existing pipeline transportation capacity is 212 MMSCMD which will increase substantially in the near future with the completion of under-construction pipelines. The pipelines under execution include the Jagdishpur-Haldia & Bokaro-Dhamra Pipeline (JHBDPL), popularly known as the Pradhan Mantri Urja Ganga, Barauni-Guwahati Pipeline (BGPL), Kochi-Koottanad-Bengaluru/Mangaluru Pipeline (KKBMPL), and Mumbai-Nagpur-Jharsuguda Pipeline (MNJPL). These gas infrastructures have helped to expand India’s gas market providing uninterrupted supply to the consuming sectors. A pioneer of the Indian LNG industry, GAIL over the years has built a strong expertise in Liquefied Natural Gas (LNG) business. GAIL is one of the promoters of Petronet LNG Limited, which owns and operates a 17.5 MMTPA capacity LNG regasification terminal located at Dahej, Gujarat, and another 5 MMTPA LNG regasification capacity at Kochi, Kerala. Besides, GAIL’s subsidiary Konkan LNG Limited owns and operates 5 MMTPA LNG regasification terminal at Dabhol, Maharashtra. To ensure India’s energy security, GAIL has secured long term (20 years) LNG contracts with Sabine Pass Liquefaction LLC, USA, a unit of Cheniere Energy Partners for import of 3.5 MMTPA of LNG from USA; and with Dominion Energy Cove Point, USA for import of 2.3 MMTPA of LNG. GAIL has also signed a 20-year LNG Sale & Purchase Agreement with Gazprom Marketing and Trading, Singapore for the import of 2.5 MMTPA LNG. Further, GAIL’s wholly-owned subsidiary company in Singapore, GAIL Global (Singapore) Pte. Limited is actively involved in the LNG trading business.

GAIL is a leading domestic petrochemical producer with a share of about 17.5% in the domestic petrochemicals market and has expanded its Petrochemical portfolio continuously to cater to the rising petrochemical needs of growing India. GAIL owns and operates India’s largest gas-based petrochemical complexes at Pata in Uttar Pradesh. The plant has a capacity of 0.81 MMTPA to produce HDPE/LLDPE. Another 60 KTA PP plant is under construction at the same location. GAIL through its subsidiary, Brahmaputra Cracker and Polymer Limited, owns and operates a petrochemical complex at Lepetkata in Dibrugarh, Assam with a polymer capacity of 280 KTA per annum. Further, GAIL is also a co-promoter in ONGC Petro-additions Limited (OPaL) which operates a petrochemical complex of 1.4 MTPA per annum polymer capacity at Dahej in Gujarat. GAIL is also constructing a Propane Dehydrogenation unit integrated with a Polypropylene unit (PDHPP) having 500 KTA capacity at Usar, Maharashtra to supplement growing petrochemical need.

GAIL has a strong focus on city gas distribution (CGD) business and has implemented CGD projects in all major Indian cities. GAIL and its affiliate CGD companies are currently authorized to operate in 61 Geographical Areas throughout India including metro cities of Delhi, Mumbai, Hyderabad, Bengaluru, Kolkata, etc.

How is GAIL contributing to the mission of Atmanirbhar Bharat at the front of energy requirement?

Inspired by Hon’ble Prime Minister’s vision of Atmanirbhar Bharat, several initiatives have been taken by GAIL to support Indian companies and also to reduce import dependency. Gas pipeline infrastructure in a country plays an important role in defining the structure of the gas market and its development. Within the National Infrastructure Pipeline (NIP), GAIL has planned to make investments of around Rs 99,000 crore with around Rs 45,000 crore in pipelines including joint ventures (JVs) and over Rs 50,000 crore along with JVs and subsidiaries. Given that it is an economical and safe mode of transporting natural gas, such gas infrastructure will help to ensure adequate availability and equitable distribution of natural gas in all corners of the country facilitating the development of the Indian gas market. Further, GAIL is also a pioneer in importing LNG which as an import substitute of liquid fuel can save foreign exchange to the tune of 200 million USD per MTPA.

The JHBDPL, also known as Pradhan Mantri Urja Ganga, has already started supplying feedstock to the urea manufacturing unit at Durgapur and shall soon supply gas to fertilizer plants at Gorakhpur, Barauni, and Sindri. These long-closed plants are being revived by the Government of India to reduce the country’s dependence on fertilizer imports using environment-friendly natural gas as feedstock. GAIL through its JV Talcher Fertilizer Limited is setting up a gas-based fertilizer plant using coal gasification technology in Angul, Odisha with a capacity to produce 1.27 MTPA of urea. This will have the twin benefit of reduction in import of fertilizer and enhanced production of domestic natural gas through coal gasification.

To reduce petrochemical imports in the country, GAIL is in process of setting up 500 KTA Propylene De-hydrogenation Polypropylene (PDHPP) Plant in Usar, Maharashtra, and 60 KTA Polypropylene plant in Pata, Uttar Pradesh.

GAIL and its affiliate CGD companies have a presence in 61 centres across India and are promoting CNG & PNG to replace liquid fuel. PNG supplies to households have increased from 25 Lakhs in 2014 to 78 Lakh in 2021 and CNG stations have increased from 1000 stations in 2014 to 3100 stations by April 2021, providing a clean and affordable alternative to cooking and transportation fuel across the country. LNG-based transportation for heavy vehicles is also being promoted to replace liquid fuel, thus reducing import dependency. GAIL is a leading participant in the Sustainable Alternative Towards Affordable Transportation (SATAT) scheme of the Ministry of Petroleum & Natural Gas to promote bio-CNG using domestic biomass and organic waste. This will supplement the availability of domestic gas to be diverted to the transportation sector and also reduce dependence on imported fossil fuels. In a big step to promote the SATAT scheme, GAIL and Ranchi Municipal Corporation recently signed a Concession Agreement (CA) for setting up Compressed Biogas (CBG) plant in the city. As per the agreement, GAIL will set up CBG Plant for processing 150 tons per day of Organic Municipal Solid Waste. The CBG plant will produce 5 tons of Compressed Biogas per day and approximately 25 tons of Fermented Bio Manure per day.

As far as procurement-related initiatives are concerned, GAIL has taken several measures and steps to boost the domestic industry across all sectors where GAIL operates. GAIL is sourcing more than 95% of goods and services from domestic sources and more than 25% of procurement of eligible goods and services are made from MSEs. Other procurement related initiatives of the company include no International Competitive Bidding (ICB) tenders below Rs 200 crore, reduction in the percentage of Contract Performance Security (CPS)/ Security Deposit (SD), no EMD in tenders, etc.

Can you please elaborate a little bit on “Strategy 2030?”

Considering the changing business scenarios and sectoral transformation, GAIL has adopted a long-term strategic plan “Strategy 2030” to address forthcoming challenges in the shifting industry landscape and to provide new areas for growth with geographic expansion. The strategy is to build a strong business portfolio and organizational structure which is not only robust enough to respond to the fast-changing business scenario but also unlocks growth opportunities for the long-term growth of the company and in turn delivers long-term value to stakeholders. Strategic initiatives and key thrust areas to be pursued under “Strategy 2030” have been identified and an action plan with physical and financial implications has been already rolled out to overcome challenges and achieve objectives.

Retaining leadership position in natural gas with the expansion of natural gas network and completion of National Gas Grid (NGG), development of the downstream market, and expanding downstream businesses like petrochemicals remain at the core of “Strategy 2030”. GAIL would intensify its market development efforts to enhance the use of gas and LNG in the country. Further, GAIL is eyeing expansion in petrochemicals, specialty chemicals, and renewables to supplement growth in its core business of natural gas marketing and transportation. In addition, GAIL will also forge partnerships and adopt new business models for entering into new businesses and expanding existing ones. There is a focus on emerging businesses such as LNG shipping, coal gasification, renewable energy, battery recharging units, etc. GAIL also aims to play a proactive role in shaping up regulations and policy guidelines in existing and potential new business areas.Keeping in mind the changing nature of our industry and our new strategic objectives, we have revisited our Vision and Mission statements to accurately describe our purpose of existence, objectives, and overarching aspirations. These new vision and mission statements of GAIL reflect our core value system including why we exist, what we do, and why we do it.

GAIL’s Mission: Enhancing quality of life through clean energy and beyond.

GAIL’s Vision: Be the leader in natural gas value-chain and beyond, with global presence, creating value for stakeholders with environmental responsibility.

Two major visions of GAIL are to provide clean energy and to have minimum negative effect on the environment and community. How do you implement this as a strategy?

Being the country’s flagship natural gas company and a responsible corporate citizen, GAIL has started its journey towards sustainable development to provide clean energy to the masses with a minimized negative effect on the environment and community. In all aspects of GAIL’s business, environmental sustainability is given utmost importance. GAIL’s new mission statement reinforces GAIL’s commitment to enhancing the quality of life through clean energy.

GAIL’s primary business is transportation and marketing of natural gas to various industries including fertilizer, power, refineries, sponge iron, city gas/CNG, and others. Natural Gas is the cleanest fossil fuel and its usage has helped end-users to reduce their pollution levels. GAIL is committed to putting its best efforts so that this environment-friendly fuel is available to every household, vehicle-owner, and industry across the country. The focus is to develop new markets and provide last-mile connectivity for end-users so that natural gas can be used as an effective solution across the country. Further, natural gas complements the cleaner Alternative Energy (AE) sources such as solar, wind, hydro, etc. GAIL supports the renewable energy hybrid models where natural gas in combination with solar, wind, or hydropower can be used as a solution to a reliable, affordable, and dispatchable integration of renewables providing vital stability to the grid. GAIL is also promoting the coal gasification technology in Odisha which will reduce the discharge of the pollutants from the coal into the environment.

GAIL is progressively creating a portfolio of renewable businesses (solar, wind, etc.) to play important role in growing cleaner energy share in the overall energy mix. Today, GAIL has a renewable energy portfolio of over 130 MW which includes around 118 MW of wind power and 12.3 MW of solar power.

In recent years, Air Quality Index (AQI) readings went off the charts in many locations of India. GAIL is implementing CGD to address pollution in cities under a multi-pronged approach promoting natural gas usage for mobility, heating, and power requirements. The use of LNG in heavy transport vehicles is also being promoted. GAIL’s ‘Hawa Badlo’ campaign has created awareness in the society for pollution control and environment conservation, focusing on issues such as greener energy sources, education, and career options around the environment.

GAIL is committed to the achievement of the Sustainable Development Goals (SDGs) and has been aligning our various initiatives across different segments and departments with the SDGs. Since 2010-11, GAIL is regularly publishing Sustainability Reports to efficiently disseminate information on various measures taken by the company on social, economic, and environmental fronts. The ‘FTSE4 Good Emerging Market Index’, a market-leading tool for investors seeking to invest in companies that have strong management of ESG risk, has included GAIL for the fourth year in a row. GAIL has also forayed into the ‘CII GreenCo Rating System’. GreenCo Rating is the ‘first of its kind in the World’ holistic framework that evaluates companies on the environmental friendliness of their activities using a life cycle approach.

Since the business dynamics have changed globally after the pandemic, what are your strategies now and how are you doing things differently?

The COVID-19 pandemic is a black swan event that disrupted lives and businesses across the world. From a global health crisis, it has quickly escalated to become a global economic crisis which the world is struggling to come to grips with as several nations including India are experiencing a ferocious second wave of the disease. The economic revival will depend on how swiftly governments take actions to contain the coronavirus outbreak, how successful their efforts are, the success of vaccination drives, the impact of new mutant strains, and how long the impact of COVID-19 will last on economic activities. Given the volatility due to the COVID-19 pandemic, organizations are facing multiple challenges ranging from the health and well-being of employees, disruptions in the supply chain, working capital shortages, to even the risk of closure of operations. The slowdown of economic activity might be a dampener to the current infrastructure drive in the gas sector.

As a leading energy provider, GAIL is continuously at work to keep its operation running as any shortfall may jeopardize the operation of many downstream establishments bringing them to a complete halt. GAIL has been working round-the-clock and ensured the continued supply of natural gas and LPG to all its customers across the country. GAIL’s establishments connected with transportation and supply of natural gas and LPG production are working at optimum capacity thanks to the dedication of its employees who are selflessly working at the frontlines, despite stringent COVID protocols. Further, GAIL has increased its capital expenditure significantly to keep the infrastructure projects running on track including CGD projects. GAIL has further facilitated ease of movement for its vendors and suppliers to transport the material/equipment as well as the labour/ workers. As employees are at forefront of this war, GAIL has taken an organization-wide vaccination drive for employees and their families to keep them safe. GAIL was at the forefront of the digitisation process even before the pandemic because of which we have been able to seamlessly adopt digital systems of interacting with our stakeholders wherever possible including procurement, payments, etc. Work from home is promoted to keep employees safe without affecting the operation. In the coming months, we hope to achieve maximum digitisation of all our processes.

Our Prime minister has rolled out some major plans for clean energy. It was his vision to see India as a world leader in Renewable and clean energy production. How is GAIL contributing towards this mission?

India strives towards clean energy solutions and pushing towards a Gas Based Economy to achieve this feat. GAIL remains committed to making clean energy available to every Indian. Natural gas is continuously endorsed by GAIL as a convenient and affordable solution for clean energy. New geographic markets and end-user sectors of natural gas being developed by GAIL including cold supply chain, shipping, railways, etc. The usage of the cleanest fossil fuel will help in reducing emissions of GHG thereby facilitating in reduction of air pollution, climate change, global warming, and rising sea levels. GAIL is working tirelessly to achieve the Hon’ble Prime Minister’s vision of ‘One Nation, One Gas Grid’ to expand the use of pollution-free Natural Gas across the country. Our 13,400 km existing pipelines and 6,300 km upcoming pipelines are part of this mission. CGD network has been identified as a major enabler in achieving the dream of Clean Energy solutions. GAIL is promoting the CGD in India as a cleaner, sustainable solution for the Indian masses. Further, renewable hybrid models can be used where natural gas can be combined with either wind, solar or hydro to offer sustainable and reliable power. GAIL has also built substantial renewable energy resources and is actively working towards expanding its renewable portfolio.

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