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GSPL: The Energy Lifeline of Gujarat


GSPL is first Pipeline Company in India operating on open access basis and is a pure transmission network. GSPL expects volume growth of 15-20% over the next 2-3 years if supported by adequate supply.

The transmission network of the company envisages development of systematic and seamless pipeline network across Gujarat connecting various suppliers and users. The suppliers of natural gas include traders, producers and LNG terminals. The users comprise industries such as power, fertilizer, steel, chemical plants and local distribution companies.

The company operates a pipeline network of 1,900km currently and expects it to be 2,400km by FY11. It plans to further augment its network length and capacity by spending Rs5b-7b every year, through its JV with BPCL, HPCL and IOC (52% stake).

What GSPL Transports and How it is Important?


Natural gas is a colorless, odorless, naturally occurring gaseous mixture of hydrocarbon components. Natural gas is used in a variety of applications, such as feedstock in fertilizer in the petrochemical industry and as fuel in the power generation manufacturing of steel, textile, ceramic, glass and other industrial products. As a fuel, natural gas competes with a range of alternative products such as coal and lignite as well as petroleum products such as liquefied petroleum gas, naphtha, high speed diesel, light diesel oil and fuel oil. However, due to lower fuel, operating costs and better combustion characteristics, natural gas has distinct economic advantages over other sources of energy. In addition, natural gas has substantial environmental advantages over other energy sources, due to lower emissions. 

Gujarat has the largest natural gas pipeline network among all the Indian states. The pipeline network in Gujarat comprises of the North Gujarat and South Gujarat network of GAIL, a part of the HBJ pipeline network, the ex-Hazira network of GAIL, a part of the DVPL pipeline network, the pipeline network of GGCL and pipeline network of GSPL. Gujarat has the only two operational LNG terminals in India. Supplies to Gujarat are expected to increase manifold, with Petronet and Shell expanding their LNG re-gasification capacity. Industrialization, proximity to supply sources and developed natural gas transportation infrastructure have resulted in Gujarat emerging as the largest natural gas consuming state in the country, with more than 35% of India's total natural gas consumed in Gujarat.     

FUTURE PLANS

The organization intends to expands its grid to 2200kms with an outreach to all the 25 districts of Gujarat thereby enabling industry, households and transportation to drive the benefits of an environment friendly fuel.

To enhance and upgrade technologies to improve operational efficiencies while maintaining a team and proactive environment.

Actively enable and facilitate city gas distribution initiatives by public and private players across Gujarat.

To explore an opportunity to extend and replicate the grid in the neighboring state of Rajasthan

VPS Advisory suggests our readers to invest in this company for long term return.