Maruti to launch CNG vehicle :- Ananlysis of Indian CNG Markets

Maruti is going to launch a CNG variant of the famous ALTO, the people's car..............

On the other hand IGL ( Indraprastha GAs ltd.) had increased the prices of CNG by Rs. 2.10 in New Delhi.....

Obviously, the demand is fuelling increases in the price of LNG. But there's another factor at work as well: the chronic gas shortages and the uncertainties related to international pipeline gas projects- Iran-Pakistan-India and the Myanmar-Bangladesh-India pipelines are still in the air.


ONGC and IOC had planned their Import terminals........At Dabhol, NTPC and Gail, which own the power plant and the attached LNG facilities, are planning to sell the plant to an LNG operator such as Petronet LNG.........this makes economic sense as Petronet has got good contracts for LNG supply abroad ................

In turn, Petronet is considering doubling the plant's capacity from 5 MMTPA to 10 MMTPA and is involving Qatar gas for a stake in turn for supplies.......


One big supurise is Africa (mainly Nigeria, Algeria, Angola and Egypt) could also become a major source of LNG. CEIBS seems to have placed their bets on Ghana rightly by opening a campus there.

Biggest advantage with LNG - its SCM- it can be transported from any where to anywhere........

Indian CNG market is growing by 50-70 % annually a robust growth by any standard.........and is poised to touch 4 times in next 4 years.......

Though power and fertilizers will be having robust growth......the real addition will be from the nascent sectors such as the Automobile fueling and industrial heatings......

KG basin and GSPCL will be the new additions to the Indian Kitty.....and other such additions could make the country a less deficient destination.......

The first demand driving factor for LNG was the replacement of Naptha and other Carbon chains from the Fertilizer manufacturing plants..........I remember Naptha was blackmarketed in remote places like Dhule and Nandurbar in northern Maharastra........

There were so many local heavy weights in that business of Naptha and solvents plants of Nandurbar........and rest is history........

There are lot of global factors which are going to have stains on the Indian Market in terms of the price escalation......

For Example the Drama over the cancellation of the Shell Environment contract in Shakhalin II project in Russia have significant effect over the Futures of the LNG contracts..........


Conclusion :-
1. Indian demand for CNG is here to stay and increase furhter
2. Supply is not showign any major development in near future of 5 years.
3. Sectors other than Fertilizers and Power are going to real growth drivers.

Hence, Marketiers and suppliers should engage in long term contracts.....to get a price advantaage and stable supplies in future.......