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Nayara in talks with Adani Gas, IGL, MGL for selling CNG at their outlets

Shine Jacob/New Delhi 12 Feb 19 | 06:21 PM

India's largest private fuel retail company Nayara Energy Ltd (NEL) is in talks with city gas distributions majors like Adani Gas, Indraprastha Gas and Mahanagar Gas to offer sales of compressed natural gas at their outlets.

The company, controlled by Russian state-owned Rosneft-controlled, will also be shedding the Essar brand name by December this year, replacing it with Nayara Energy.

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"We are in talks with Adani Gas, IGL and Mahanagar Gas to tie up for selling CNG, in geographical areas where they are in operation," said a company executive who did not want to be quoted.

The new business plan to sell gas at its outlets comes close on the heels of the lucrative response that Petroleum and Natural Gas Regulatory Board (PNGRB) got for the tenth round of city gas distribution bidding.

About 225 bids were received in respect of all the 50 geographical areas offered under the round.

The official said the discussions with CGD companies are in its initial phase. Based on data available with the Petroleum Planning and Analysis Cell (PPAC), the company has 5,033 retail outlets, out of a total of 64,050 fuel outlets in the country. The other big private players Reliance Industries has 1,400 and Shell 144 outlets.

Nayara is also working on the expansion of its retail outlets by adding another 2,700 outlets. "We are looking to have over 7,500 outlets in the next one and a half years," said the executive quoted above. 

Russian state oil giant Rosneft holds a 49.13 per cent stake in Nayara. The other major shareholders in Nayara Energy include Trafigura Group with 24.5 per cent, United Capital Partners with 24.5 per cent and Essar Group with 2 per cent stake.

Rosneft and its partners had bought Essar Oil for a whopping $12.9 billion in 2017. Though the company was later renamed as Nayara Energy, they continued to operate retail outlets with Essar brand name.

"We wanted to continue with the brand name till people start identifying Nayara. By December, Essar branding will be replaced by Nayara Energy in all our 5,033 outlets," he added. 

The company operates a 20-million-tonne-a-year oil refinery at Vadinar in Gujarat.

Nayara had earlier announced a $850-million expansion plan for its Vadinar refinery in Gujarat, marking its foray into the petrochemical business. The company will set up a polypropylene plant with an annual capacity of 450,000 tonne.

The tie-up with CGD majors will mark its foray to gas sales as well as Adani was one of the aggressive bidder in the ninth round of CGD bidding. The tenth round of CGD is expected to cover 124 districts across 14 states, covering 18 per cent of India’s geographical area and 24 per cent of its population.

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