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BG Group is a key player within the gas industry in India, with a presence across the gas chain. The Group has enhanced its position in India’s growing natural gas sector by developing its upstream, midstream and downstream interests.

Press release: 29 Sept 2011 BG Group reaches agreement on long-term LNG sales to India Identified as qualifying bidder for MB-DWN-2010/1 Panna L installation

Key dates

1995
Mahanagar Gas Ltd (MGL) formed

1997
Majority stake in GGCL acquired

2002
30% participating interest in the Panna/Mukta and Mid and South Tapti (PMT) fields acquired

2007
PSC for Block KG-OSN-2004/1 signed

2008
Agreement signed by BG Group with GAIL to take PMT gas

Farm-in to Block MN-DWN-2002/02

2010
PSC for Block KG-DWN-2009/1 signed

BG Group has held a 30% interest in the Mid and South Tapti gas fields and the Panna/Mukta oil and gas fields since 2002.

The latest project, Panna L, was installed in early 2011 with development drilling planned to commence in late 2011. BG Group continues to enhance recovery from the PMT fields through incremental development of existing fields via well intervention and infill drilling campaigns, as well as new projects.

Three development wells were completed in Mid and South Tapti during 2010 and three extended reach drilling wells are planned for Mid Tapti in late 2011.

Under India’s New Exploration Licensing Policy (NELP) 6 licensing round, BG Group acquired a 45% interest in exploration block KG-OSN-2004/1 in the Krishna Godavari (KG) Basin, in 2006. The shallow water block, which covers an area of approximately 1 131 square kilometres, is located off the east coast of India. Oil and Natural Gas Corporation Limited (ONGC) holds the remaining 55% and is operator. The first exploration well has been spudded and completion of drilling and testing is expected in late 2011.

In 2008, BG Group entered a farm-in agreement with ONGC to acquire a 25% interest in exploration block MN-DWN-2002/02 in the Mahanadi Basin on the east coast of India. 3D seismic covering an area of 5 895 square kilometres was completed in this block in 2010.

In the NELP 8 licensing round in 2010, a consortium led by BG Group (30% and operator), was awarded an exploration block (KG-DWN-2009/1) in deep water in the KG Basin.

The NELP 9 licensing round was launched in October 2010. A consortium led by BG Group (50% and operator) has been identified as the qualifying bidder for an exploration block (MB-DWN-2010/1) offshore the west coast of India. The award of the contract is subject to final confirmation from the government of India and regulatory approvals.

Gujarat Gas Company Limited (GGCL)

BG Group has a 65.12% controlling stake in GGCL, with the remaining 34.88% publicly owned. GGCL is India’s largest private sector natural gas distribution company in terms of sales volume. As at end June 2011, GGCL served around 325 000 residential, commercial and industrial customers through a pipeline network of approximately 3 850 kilometres and fuelled more than 150 000 natural gas vehicles (NGVs) with compressed natural gas (CNG).

In 2010, its distribution sales volumes were 1 212 mmcm (1 035 mmcm in 2009). GGCL continues to grow its business by securing a competitively priced gas portfolio to meet the demands of its customers. Demand for gas in the company’s markets exceeds availability of domestic gas and GGCL continues to contract additional gas, including regasified LNG, to enable growth.

The government of India has notified the downstream regulator (PNGRB) under the PNGRB Act 2006 to grant authorisation effective July 2010, which will enable formal authorisation of GGCL’s application for gas distribution business in the districts of Surat and Bharuch and for its 73 kilometre high-pressure Hazira-Ankleshwar transmission pipeline (HAPi).

Mahanagar Gas Ltd (MGL)

MGL is based in India’s commercial capital, Mumbai. It is India’s largest gas distribution company in terms of size of customer base. BG Group and GAIL (India) each have a 49.75% stake in MGL, with the residual stake held by the government of Maharashtra.

MGL’s 2010 volumes rose 10% to 646 mmcm (2009 587 mmcm). This volume growth was underpinned by the addition of new CNG outlets, connecting additional industrial and commercial customers and the expansion of its network in taking gas to the Navi Mumbai area. As at end June 2011, MGL served over 470 000 customers.

MGL owns and controls over 3 300 kilometres of pipeline and has been extending its network beyond Greater Mumbai into the neighbouring areas of Taloja, Kalyan and Ambernath.

To support growth MGL has signed long-term gas supply agreements for additional gas from the RIL D6 field and framework agreements to source spot LNG. MGL is connected into the national pipeline network, thereby providing access to all the major sources of gas, enhancing security of supply.

In 2009, BG India Energy Solutions Private Limited (BGIES), a wholly owned subsidiary of BG Group, commenced midstream gas marketing operations in India. The Company has approval from the Foreign Investment Promotion Board of the government of India to undertake wholesale marketing and distribution of natural gas from domestic sources as well as LNG.

BGIES is working closely with existing and new domestic players to source gas including global LNG supplies. In 2010, it marketed three spot LNG cargos to customers in India. BG Group continues to explore suitable opportunities in augmenting LNG supplies and gas marketing opportunities into India.