New Delhi: The Adani family owned Adani Gas on Friday clarified on Petroleum and Natural Gas Regulatory Board’ (PNGRB) notice on non disclosure of information and alleged violation while bidding for city gas distribution (CGD) projects.
The issues assume importance in the backdrop of Total, the world’s second-largest liquefied natural gas company, which plans to buy a 37.4% stake in Adani Gas through a combination of a tender offer to public shareholders and from the Adani family.
Television channel CNBC-TV18 on Friday morning reported about Adani Gas bidding for CGD projects using Adani Enterprises Ltd’ net worth calculations, without disclosing the arrangement between the two companies.
CGD refers to transportation or distribution of natural gas to consumers in domestic, commercial and transport sectors through a network of pipelines. Over the past decade, the business has attracted several companies to lay networks of gas pipelines.
“All concerned authorities were intimated about the proceedings pertaining reorganization of AGL through media / newspapers / disclosures / public listing / bid submissions. We have duly responded to PNGRB with all required informations to close the matter," a Adani Gas Ltd’s spokesperson said in a statement.
The Adani family owns a 74.8% stake in Adani Gas. Last October, Total agreed to acquire the stake for around RS 5,700 crore. This is Total’s biggest investment in India’s clean energy segment. The proposed acquisition marks the largest foreign direct investment in India’s city gas distribution industry, with the deal giving Total joint control of Adani Gas, along with the Adani group.
“Our project work at all GAs (geographical areas) are going on in full swing and with the facilitation and support of PNGRB and all authorities we are committed to deliver CNG and piped gas to millions of our consumers on fast track basis. We are guided by the principles of corporate governance. It should be noted that we are fully compliant and have transparently represented facts in totality adhering to norms of compliance and disclosure," the Adani Gas spokesperson added.
Adani Gas is developing city gas distribution (CGD) networks to supply piped natural gas (PNG) to industrial, commercial and domestic users, and compressed natural gas (CNG) to the transport sector.
The company has already set up city gas distribution networks in Ahmedabad and Vadodara in Gujarat, Faridabad in Haryana and Khurja in Uttar Pradesh. Adani Gas, in association with Indian Oil Corp. Ltd, is also developing distribution networks in Allahabad, Chandigarh, Ernakulam, Panipat, Daman, Dharwad, and Udhamsingh Nagar.
"There is no question of penalties as same are not applicable and moreover Adani Gas is in full compliance of applicable rules/laws," the Adani Gas spokesperson said.
City gas distribution is turning out to be the next big downstream expansion in India, after fuel retailing, with the government pushing for a gas based economy.
Gas comprises about 6.2% of India’s primary energy mix, far behind the global average of 24%. The government plans to increase this share to 15% by 2030. India’s gas demand is expected to be driven by the fertilizer, power, city gas distribution, and steel sectors. India’s energy demand is expected to grow at 4.2% per year over the next 25 years.