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On the occasion of the 1st Annual General Meeting of the company I take the opportunity to welcome the shareholders.
HPOIL Gas Private Limited (HOGPL), incorporated on November 30, 2018 is an equal JV of HPCL and OIL. Under the eighth round of CGD bidding, the company was authorized by the PNGRB through its orders dated February 22, 2018 and March 6, 2018, to lay, implement, and operate CGD network in Ambala-Kurukshetra and Kolhapur, respectively. Authorization provides the infrastructure exclusivity of 25 years and; marketing exclusivity of 5 years in both the GAs. Expected project cost, under the MWP as given by PNGRB is about Rs. 640.45 crore, to be funded at a debt-to-equity ratio of 70:30. The scheduled commercial operational date is April 1, 2023.
It is a matter of pride that the accounts for the year ending March 2019 has been finalized and is coming up for adoption by the General body.
The audited financial statements of your company for the year ended 31 Marc 2019 along with the Directors’ Report have already been circulated to you. With your permission, we may take them as read. I would like to begin the proceedings by giving you a report on the overall performance of your company and the environment in which it operates.
That in a short span of about 10 months, the company has been able to settle down to an independent manner of working and finalizing its accounts is an achievement by itself.
The Government of India is focusing on increasing the share of natural gas to 15% by 2030 in energy basket from the present level of 6.2% and make India a gas based economy. Government is taking necessary policy and regulatory steps to attract investment in enhancing domestic gas production, gas infrastructure including pipelines, City Gas Distribution (CGD) networks and Liquefied Natural Gas (LNG) import terminals. The Government is exploring means for establishing a gas market where natural gas can be traded freely and supplied. It is expected that free gas market will attract new investment in Exploration & Production (E&P) activities so as to increase gas availability and accessibility to all at market price.
Further, government has envisaged to connect One Crore households with PNG supplies for cooking purpose by 2020. In this regard, GOI has taken steps to expand the CGD network, increase the number of CGD’s from 54 in 2013 to 228 in March 2019, covering 53 % of geographical area and 70% on India population spread over 402 districts in 27 states/ UTs.
Hon’ble Prime Minister of India has emphasized on increasing the reach and accessibility of PNG connections to maximum number of households and also thrust on use of CNG being, “cleaner and green fuel”. This augurs well with our growth plans.
Your company is operating in highly regulated and Competitive Industry Environment. Your company has been assigned ‘AA-/Stable’ credit rating to its long term bank loan facility from CRISIL. Your company has interacted with the Regulator, to facilitate the formulation of guidelines for the determination of authorized areas, network tariff and pipeline standards.
As per the approval received from the Petroleum and Natural Gas Regulatory Board (PNGRB), the company will have marketing exclusivity of 5 years and network exclusivity of 25 years for its CGDs. It is, therefore, well-positioned to tap the expected growth in the gas sector in its respective CGDs. The company is also likely to build a healthy consumer and industrial base in the piped natural gas (PNG) segment, and expand in the compressed natural gas (CNG) segment once adequate infrastructure is in place in the CGDs.
The project is still in early stages of execution. Total cost for over 25 years (project life) is expected to be about Rs. 1500 Crore. Major approvals are in early stage- including land acquisition (primarily for City Gate Stations), right of way, and right of use- and the company will be obtaining these on an ongoing basis. Further purpose of carrying out CGD activities your Company has initiated procurement of pipes/Compressors, dispensers and related equipments for establishing the network in geographical areas of Ambala – Kurukshetra and Kolhapur.
MDPE Laying Inauguration with Local representatives at Kurukshetra
Inauguration of pipe line laying at MIDC Shiroli, Kolhapur
First CNG Station Inauguration by HOGPL Chairman Shri Dilip Kumar Pattanaik
Your company started a CNG station at Ambala –Kurukshetra
It has already received domestic gas allocation from GAIL India Limited.
Your company will be sourcing natural gas from GAIL’s Dabhol Bangalore Pipeline (DBPL) and it is proposed to construct City Gate Station (CGS) adjacent to GAIL’s IP2 station in Mauje Vadgaon village in Kolhapur district.
Likewise your company is source of natural gas from GAILS Dadri Bawana Nangal Pipeline (DBNPL) and construct City Gate Station adjacent to SV- 7 of this pipeline in Ambala District Initial operation to meet MWP target will start with assistance of nearly gas.
GAS Agreement signed at Chandigarh between HOGPL & GAIL
Pipeline laying inauguration at Ambala
HOGPL CNG Station at Kolhapur – HP Highway
All these achievements would not have been possible without the support of all the stakeholders including the suppliers who ensured continuous supply of gas to us, the Central and State Governments, Ministry of Petroleum and Natural Gas, various Government agencies, customers and shareholders . I would like to take this opportunity to thank all those who have supported and guided us during the year.
I also thank all my colleagues on the Board for their continued support and guidance.
Last, but not the least, I would like to thank all employees of HOGPL for their high level of motivation, commitment and hard work.