BG Group Takes Advantage of Demand in India's Gas Market

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Researched by Industrial Info Resources (Sugar Land, Texas)--Global oil and gas leader BG Group plc (LSE:BG.L) (London, England) has operations in more than 25 countries across five continents. They also have found a place in the U.S. over-the-counter market known as "International OTCQX."

Speaking on the Indian gas market sectors through 2015 and 2020, officials from BG Group said: "The Indian gas market is evolving, and demand is expected to continue to grow significantly up to 2015 and through to 2020. We see a significant proportion of incremental demand coming from new southern India markets. The power and fertilizer sectors will continue to dominate the demand mix. On the supply side, while domestic sources will continue to be a dominant part of the supply mix, we expect the demand supply gap to keep increasing, and this shortfall will need to be bridged by liquefied natural gas (LNG)."

The officials added that they see the effective gas demand growth critically linked to growth in infrastructure. "We expect pipeline networks being expanded to new markets by 2013-14, as the larger inter-states grid gets established. If the demand-supply gap continues to increase, then gas prices are likely to need to rise. However, the process is expected to be a gradual evolution over a period of time. Regulatory frameworks are evolving and a robust and transparent framework will be the key to continued long-term growth of the natural gas sector in India."

The officials said that BG Group is planning a $500 million investment through 2015. "BG Group is a significant player in the gas industry in India, and is committed to working closely with National Oil Companies, private companies, customers, communities and regional and national governments to expand business in India over the long term.

"We have a significant presence upstream and downstream and have been involved in the development of the Indian gas market for more than 15 years. We are interested in exploring further opportunities throughout the gas chain. Broadly, the projected investments will cover additional investments in PMT; exploration in east coast blocks; and midstream and downstream opportunities, as and when they present themselves. The size of the investments would also be dependent on our success with these new project proposals."

As far as BG Group's association with Indian companies is concerned, officials of the company said that BG India (New Delhi, India), a part of BG Group, is a key private-sector contributor to the country's long-term hydrocarbon strategy. BG India develops and manages significant operations in exploration and production, and grows LNG supply, re-gasified LNG marketing, gas transmission and distribution business interests. Thus, BG India offers an integrated gas chain. Having entered India in 1995, BG Group has been active in the Indian hydrocarbon sector for more than 15 years.

BG India has substantial interest in the offshore blocks on the west and east coasts of India and holds significant interest in the downstream business. BG Group holds a 65.12% controlling stake in Gujarat Gas Company Limited (BSE:523477) (GGCL) (Ahmedabad, India), India's largest private natural gas company by sales volume. BG Group also holds a 49.75% stake in Mahanagar Gas Limited (MGL) (Mumbai, India), the largest city gas distribution company by customer base. MGL is a joint venture between BG Group, GAIL India Limited and the government of Maharashtra.

BG India Energy Solutions Private Limited (BGIES), a wholly owned subsidiary of BG Group, has commenced marketing operations in India to undertake wholesale marketing and distribution of natural gas and re-gasified LNG. BGIES also engages with GAIL India Limited, Petronet LNG Limited (BSE:532522) (New Delhi), Gujarat State Petroleum Corporation (Gujarat, India) and other Indian companies for LNG business.

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