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India’s Power Capacity Expands Significantly: From 305 GW to 476 GW Over Ten Years
business update - June 7, 2025

Indraprastha Gas Increases Capex 67% for Energy Diversification

Indraprastha Gas Increases Capex 67% for Energy Diversification

IGL embarks on a strategic transformation journey by significantly raising capital expenditure to invest in clean energy ventures beyond its core city gas distribution business.

Summary:
In a bold move to future-proof its operations and reduce dependence on the city gas distribution (CGD) segment, Indraprastha Gas Limited (IGL) has announced a 67% increase in its capital expenditure (capex) for the current financial year. The enhanced investment will fund the company’s ambitious diversification into solar energy, liquefied natural gas (LNG), and compressed biogas (CBG)—sectors poised to play a critical role in India’s clean energy transition. This strategic shift comes amidst evolving regulatory frameworks, intensifying competition, and global decarbonization trends.

Indraprastha Gas Bets Big on Clean Energy: Capex Raised by 67% to Power Diversification
New Delhi, June 2025 – Indraprastha Gas Limited (IGL), a prominent player in India’s city gas distribution (CGD) sector, is embarking on a significant strategic transformation. The company has announced a substantial 67% increase in capital expenditure for FY2025-26, earmarked primarily for investments in solar power, liquefied natural gas (LNG), and compressed biogas (CBG) businesses.
This jump in spending reflects IGL’s growing urgency to diversify beyond its traditional gas pipeline and distribution business, which has been facing increasing regulatory scrutiny, fluctuating gas prices, and the broader global shift toward decarbonized, multi-source energy systems.

Capex Allocation and Strategic Goals
According to the company’s statement, IGL plans to invest over ₹2,200 crore this fiscal year, up from around ₹1,300 crore spent last year. The additional funds will be directed toward:
Establishing solar energy projects, both in captive and commercial segments
Establishing LNG refuelling facilities for long-distance transportation and logistics.
Setting up CBG plants and expanding CBG procurement, aligned with India’s SATAT (Sustainable Alternative Towards Affordable Transportation) scheme
Upgrading and expanding core CGD infrastructure, including network expansion into newer geographies
IGL’s MD, Sanjay Kumar, remarked,
“Diversifying into renewable and cleaner fuels is not only aligned with India’s net-zero goals but also helps us mitigate long-term risks in our core CGD segment. This capex hike marks a critical step toward building a resilient, future-ready energy portfolio.”

Why the Shift?
The move comes at a time when the CGD sector, once considered a secure growth engine, is facing mounting regulatory, competitive, and environmental headwinds. Key challenges include:
Government-mandated gas allocation revisions
Volatility in spot LNG prices, impacting input costs
Increased competition from electric vehicles (EVs) and alternative mobility solutions
Carbon neutrality pressures from global investors and ESG mandates
IGL, which supplies piped natural gas (PNG) and compressed natural gas (CNG) in Delhi-NCR and nearby regions, believes that relying solely on natural gas is no longer a sustainable strategy. The diversification into solar and biogas aligns well with the Government of India’s Energy Transition Plan and the commitment to reach net-zero emissions by 2070.

Solar Energy: Tapping into India’s Renewable Boom
IGL is actively exploring the development of solar power plants for captive usage and for commercial sale under third-party arrangements. With solar tariffs falling below grid parity in many states, investing in solar energy presents a strong long-term cost arbitrage and green credit advantage.
The company plans to collaborate with both private developers and public sector units to deploy solar infrastructure across rooftops, industrial parks, and utility-scale projects.
This move also supports greening its own operations, such as running CNG stations on solar energy and reducing scope 2 emissions.

LNG: Future of Long-Haul Mobility
LNG is emerging as a promising alternative fuel for interstate logistics and commercial fleets, where CNG’s limited range and EVs’ high battery costs fall short. IGL plans to establish LNG dispensing stations along key highways and industrial corridors in North India.
This aligns with the central government’s vision of creating an LNG fueling ecosystem across 1,000 highways to reduce diesel dependence and import bills. IGL’s early investments in this segment could position it as a pioneer in green freight mobility.

Biogas Push: Capturing the Circular Economy Opportunity
IGL’s move into compressed biogas (CBG) comes as the government promotes CBG as a clean, domestically sourced substitute for fossil fuels. IGL is already in the process of procuring CBG from third-party developers and blending it into the existing gas supply chain.
The firm plans to develop its own CBG production units using municipal and agricultural waste. This not only enhances energy security but also contributes to rural income, waste management, and carbon footprint reduction—three key pillars of India’s sustainable development goals.

Investor Reaction and Outlook
While investors were initially cautious about the shift in focus, the market has responded positively, recognizing the long-term value of building a multi-fuel energy model. Analysts believe that if executed well, the diversification could de-risk revenue streams, improve ESG ratings, and boost valuation multiples in the years to come.
Brokerage houses have also pointed out that companies with diversified clean energy portfolios are better equipped to attract green finance, including ESG-linked bonds and sovereign green investments.

Challenges Ahead
Despite its strong intent, IGL will have to navigate several challenges, such as:
High upfront costs in setting up solar and CBG facilities
Technology adaptation risks in biogas and LNG logistics
Policy clarity and subsidy dependence in emerging energy segments
Competition from established renewable energy players
To mitigate these, the company is expected to pursue joint ventures, public-private partnerships, and government collaborations to share risks and scale efficiently.

Conclusion: A Bold Step into a Cleaner, Safer Future
With this 67% hike in capital spending, Indraprastha Gas is sending a clear message: the future of energy is diversified, decentralized, and decarbonized. By expanding into solar, LNG, and CBG, IGL is not just adapting to a new energy landscape but is also shaping it.
As India accelerates its clean energy journey, IGL’s forward-looking strategy positions it to emerge as a key player in the integrated green energy ecosystem, balancing growth with sustainability.

 

 

 

 

 

 

 

 

 

 

 

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Torrent Power Teams Up with BP for LNG Partnership

Torrent Power Teams Up with BP for LNG Partnership

Torrent Power has signed a long-term contract with BP Singapore to supply 0.41 MMTPA of LNG, which will be in effect from 2027 to 2036. This move indicates a strategic transition towards greater energy diversification and sustainability, with the company’s stock responding with a 2% increase.

Summary:
Torrent Power Ltd has disclosed a long-term sales and purchase agreement (SPA) with BP Singapore for the provision of up to 0.41 million metric tonnes per annum (MMTPA) of liquefied natural gas (LNG), set to take effect from 2027 through 2036. This strategic partnership will support Torrent’s power generation requirements and industrial gas distribution network, further strengthening its energy portfolio. The stock rose 2% following the announcement, reflecting investor confidence in the company’s long-term growth trajectory and energy diversification strategy.

Torrent Power’s LNG Move: A Strategic Leap Toward Energy Security

In an important advancement for India’s energy sector, Torrent Power Ltd has finalized a long-term sales and purchase agreement (SPA) with BP Singapore for the provision of up to 0.41 million metric tons per annum (MMTPA) of liquefied natural gas (LNG). The deal, which spans from 2027 to 2036, marks a key milestone in Torrent’s ambition to diversify its fuel mix, reduce dependence on spot markets, and ensure reliable fuel sourcing for its generation and distribution businesses.
Announced on June 3, 2025, this pact will allow Torrent Power to hedge against fuel price volatility and support long-term planning across its various operational arms. Following the announcement, Torrent Power’s stock gained nearly 2%, trading higher on both the BSE and NSE as market participants welcomed the move.

Deal Dynamics: A Secure LNG Supply for a Decade

The SPA with BP Singapore, a key player in Asia’s LNG trading sector, is anticipated to give Torrent a reliable source of LNG to fulfill its power generation needs and commitments for city gas distribution (CGD). The volume of 0.41 MMTPA (million metric tonnes per annum) is significant and will contribute to lowering the company’s reliance on expensive spot LNG cargoes.
While the financial specifics of the agreement, such as pricing and transportation terms, remain undisclosed, analysts believe that the contract pricing would likely be linked to Brent crude or Henry Hub indices, providing Torrent with predictable cost economics over the term.
This agreement also aligns well with India’s broader energy policy focus of transitioning toward cleaner fuels and enhancing LNG infrastructure to support industrial and residential usage, especially in urban centres.

Torrent’s LNG Strategy in Context

The long-term deal reflects Torrent Power’s growing presence in the natural gas segment, particularly through its CGD licenses across 7 geographical areas (GAs) and a total of over 5 lakh residential customers and 1,000 industrial/commercial clients.
Natural gas, with its lower carbon footprint compared to coal and oil, fits well within Torrent’s environmental strategy. By securing long-term LNG, Torrent can optimize costs, enhance energy security, and ensure uninterrupted supply to key end-users, particularly industries that require consistent energy inputs.
Moreover, Torrent’s presence in gas-based power generation, including its 1,153 MW Sugen power plant in Gujarat, makes the LNG deal even more critical. It will mitigate fuel availability risks and support efficient operations when gas-based units are called upon to supply electricity, especially during peak demand periods or grid instability.

Market Reaction: Stock Gains and Analyst Sentiment

The market responded positively to the announcement. Torrent Power’s stock rose 2% intraday, trading at around ₹1,275 on the NSE at the time of writing. Analysts attribute this uptick to the market’s appreciation for long-term visibility and reduced fuel risk exposure.
Brokerages have noted that the deal could support margin stability across Torrent’s generation and gas businesses, especially in a volatile global energy environment. Additionally, it provides a competitive edge as the LNG market is expected to remain tight in the coming years due to geopolitical tensions and supply-demand imbalances.

Supporting India’s Clean Energy Ambitions

India aims to raise the percentage of natural gas in its energy mix from 6% to 15% by the year 2030. The government has been actively pushing for infrastructure creation, such as LNG terminals, city gas grids, and virtual pipeline networks. Companies like Torrent Power are critical players in enabling this transition.
With the BP Singapore agreement, Torrent is aligning itself with the national agenda of cleaner, affordable, and accessible energy and enhancing its capability to serve expanding urban gas markets and captive industrial clients.

Global LNG Landscape: Why Long-Term Deals Matter

The global LNG market has witnessed increased demand post-pandemic, fueled by economic recovery, supply disruptions, and geopolitical factors such as the Russia-Ukraine conflict. This has led to volatile spot LNG prices, prompting many companies, including Indian players, to shift toward long-term procurement contracts.
BP Singapore, a unit of British energy major BP Plc, has a strong presence in LNG trading and has been involved in similar deals with entities in China, Japan, and Europe. The partnership with Torrent highlights BP’s increasing focus on India’s expanding gas market, establishing Torrent as a dependable off-taker in a key region.

Conclusion: A Forward-Looking Energy Partnership

Torrent Power’s long-term LNG supply deal with BP Singapore is a strategic and timely move that cements the company’s commitment to energy security, operational efficiency, and clean fuel adoption. As India continues its journey toward a gas-based economy, such alliances will be pivotal in ensuring consistent supply, cost optimization, and emission reductions.
For investors, this development strengthens the case for Torrent’s long-term growth story, and for the energy sector, it serves as a model for how private players can collaborate with global giants to secure India’s future energy needs.

 

 

 

 

 

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GAIL Secures Five U.S. Bids for LNG Project

GAIL Secures Five U.S. Bids for LNG Project

 

India’s state-owned gas company GAIL is progressing in securing 1 MTPA of LNG through 15-year supply agreements established via strategic partnerships with U.S. equity firms.

Summary:

GAIL (India) Ltd. has received five bids from U.S.-based energy companies offering equity stakes in their LNG export projects, each linked to long-term supply agreements. The Indian state-owned gas major is seeking to lock in 1 million tonnes per annum (MTPA) of liquefied natural gas (LNG) for 15 years, beginning in 2029-30, to bolster the country’s energy security. The move is aligned with India’s long-term decarbonization strategy while ensuring fuel availability for its growing gas-based economy.

GAIL Strengthens Its Global Energy Strategy with a Strategic Investment in LNG

In a significant step towards strengthening India’s future energy security, GAIL (India) Ltd., the nation’s largest gas utility, has received five binding bids from U.S.-based companies offering equity stakes in their liquefied natural gas (LNG) projects. The proposals are strategically tied to long-term LNG supply contracts, allowing GAIL to secure 1 million tonnes per annum (MTPA) of LNG over a 15-year term, possibly extending beyond that.
The delivery of LNG under these agreements is anticipated to start in 2029-30, coinciding with India’s objective of establishing a stable and diverse fuel supply as it shifts towards a gas-centric economy and works to lower its carbon emissions.

Bidding Process Attracts Robust U.S. Interest

The five proposals are in response to GAIL’s Request for Proposals (RFP), which was floated earlier this year. The RFP sought long-term LNG supply deals through strategic equity investments in U.S. LNG terminals. According to industry insiders, the offers include participation in brownfield and greenfield LNG export projects, indicating the growing confidence of American energy companies in India’s natural gas market.
While GAIL has not yet disclosed the names of the bidding companies, sources suggest participation from prominent U.S. LNG developers with existing or under-construction facilities along the Gulf Coast. These may include companies like Cheniere Energy, Venture Global, Tellurian, and NextDecade, which have actively sought Indian buyers for long-term contracts in recent years.
The equity-linked supply structure ensures alignment of interest between supplier and buyer, making the LNG procurement more cost-efficient and strategically secure for GAIL.

GAIL’s Strategy: Securing Future Supplies for a Gas-Based Economy

This development is part of GAIL’s broader strategy to diversify its LNG sourcing portfolio and reduce dependence on spot markets, which have exhibited extreme volatility over the past two years due to geopolitical tensions and global supply disruptions.
India currently imports over 50% of its LNG requirements. GAIL, which has long-term contracts with suppliers from Qatar, the U.S., and Australia, seeks to enhance supply certainty for the future. India aims to boost the proportion of natural gas in its energy mix from 6.3% to 15% by 2030, which is projected to lead to a more than twofold increase in the country’s LNG demand over the next ten years.
A senior GAIL executive stated, “These bids represent a significant milestone in our efforts to build long-term supply security. Equity participation in upstream LNG projects ensures better pricing, stronger supply assurance, and closer collaboration with global partners.”

Shipment Timeline: Aligning with Domestic Infrastructure Development

The 2029-30 start date for LNG shipments is particularly strategic, as it aligns with GAIL’s projected expansion of its LNG import terminals, regasification capacities, and pipeline network across India. With the upcoming Jafrabad FSRU terminal, expansions at the Dabhol and Kochi terminals, and the proposed East Coast LNG facilities, GAIL ensures that both upstream sourcing and downstream infrastructure are in sync.
Furthermore, India’s city gas distribution (CGD) rollout, industrial fuel switch policies, and hydrogen blending plans rely heavily on robust gas availability, which this deal is expected to support.

Global Context: India Deepens LNG Ties with U.S. Amid Changing Energy Geopolitics

The United States has rapidly emerged as one of the top LNG exporters globally, and India has been a key destination for U.S. LNG since 2018. With this new round of strategic tie-ups, GAIL is poised to strengthen its position as a reliable long-term partner for American LNG suppliers.
These equity-linked supply deals come when traditional suppliers like Russia and the Middle East become less predictable due to shifting global alliances, sanctions, and supply-chain risks. Thus, the GAIL-U.S. LNG partnership signals a broader realignment of India’s energy diplomacy, focusing on diversified, democratic, and economically aligned partners.

Challenges and Considerations

Despite the positive outlook, GAIL must thoroughly assess various key factors before finalizing the equity-linked agreements:
– Timelines for projects and regulatory approvals in the U.S.
– Pricing frameworks connected to Henry Hub or mixed indices
– Currency risk and hedging approaches
– Provisions for sharing risks and force majeure protection
– Options for exiting if supply does not commence
The due diligence process is anticipated to be completed in the coming months, following which GAIL may identify one or two projects for final discussions and board approval.

Conclusion: A Forward-Looking Energy Play for India

GAIL’s receipt of five U.S. bids marks a significant step in India’s energy transition journey, showcasing a proactive strategy to secure long-term, clean fuel supplies through international collaboration. With LNG demand set to rise in sectors ranging from power and fertilizers to mobility and industry, such forward-looking agreements are not just business deals—they are critical instruments of national energy security.
As the country prepares for a more resilient, low-carbon future, GAIL’s global outreach and strategic positioning in the LNG ecosystem ensure that India remains well-prepared for tomorrow’s energy needs.

 

 

 

 

 

 

 

 

 

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