Green fuels make sense from every point of view, whether it is concern for the environment, the issue of energy security, rural prosperity or business.
Indian Oil Corporation has been taking initiatives to adapt to the changing energy mix even as it pushes growth in the sale of petrol and diesel, which is the mainstay of the company’s business, Sanjiv Singh, chairman, tells FE’s Anupam Chatterjee.
Did the recent unrest in West Asia impact supplies? How is the company diversifying its sources of crude?
Crude oil supplies to Indian Oil were not affected by the recent unrest in West Asia. Over the years, the company has diversified its crude oil basket and started imports from the US, both through spot tenders and term contracts, as a strategic intervention, given that the US is set to be the largest supplier of incremental crude oil production up to 2030. The company is also exploring import of crude oil through term contracts with the national oil companies of countries other than those in West Asia. We recently signed a term contract with Rosneft, the national oil company of Russia, for import of 2 million tonne of Urals grade crude oil in 2020.
What are the plans for the CGD business?
We began more than a decade ago with the development of city gas distribution (CGD) networks in Agra and Lucknow through Green Gas, our joint venture company (JVC) with GAIL. Indian Oil has also ventured into a partnership with Adani Gas, setting up IndianOil-Adani Gas. We are now operating CGD projects in 11 geographical areas (GAs), which we had bagged till the 8th round of the CGD bidding. With the 9th and 10th rounds of CGD bidding, Indian Oil has raised its stake in the sector, looking to develop GAs on its own.
Could you elaborate on the major initiatives being taken in this regard?
In the 9th and 10th rounds of bidding, Indian Oil earned authorisation for 17 GAs on its own and 12 GAs through its two JVCs. Indian Oil and its JVCs now have in their kitty 40 GAs across the length and breadth of the country. With an estimated investment of Rs 30,000 crore, we aim to service about 8 million domestic PNG consumers and sell CNG through 2,000 stations/petrol pumps. That would be a sizeable scale-up from the current level of 0.5 million PNG consumers and about 600 CNG facilities. As you would know, CNG is a highly attractive alternative to petrol and diesel in the passenger transport segment, being both environment-friendly and cheaper.
What other steps are you taking to increase your green portfolio, given the growing awareness of carbon emissions?
Green fuels make sense from every point of view, whether it is concern for the environment, the issue of energy security, rural prosperity or business. Indian Oil is working in various segments in this space, including compressed bio-gas (CBG), ethanol, 2G-ethanol, bio-diesel, synthetic methane/ethanol and conversion of refinery off-gases into bio-fuels and used cooking oil into bio-diesel.
The company’s R&D team has developed a technology for anaerobic digestion of waste and biomass sources like organic waste, agricultural residue, cattle dung, etc, which achieves higher bio-gas yield and methane content in bio-gas compared to conventional technologies. In September 2019, we started selling CBG under the “IndiGreen” brand name from plants in Pune and Kolhapur. A 2G-ethanol plant of 100-kl-per-day capacity is also being set up at Panipat. About 2 lakh tonne of paddy straw would be utilised every year as feedstock by the plant.