Mahanagar Gas to Pursue More Contracts by 2025-End Amid Rising Consumption.

Mahanagar Gas Ltd (MGL) plans to explore new contracts by the end of 2025, driven by rising natural gas consumption in Mumbai and its adjoining areas. The company, which supplies compressed natural gas (CNG) and piped natural gas (PNG), aims to expand its reach as demand continues to grow.

“Right now, we are comfortable with the existing arrangements. We have already added one contract. So, maybe by 2025-end or the next financial year (FY26), we will look for more contracts,” said Ashu Singhal, Managing Director of MGL, on the sidelines of India Energy Week (IEW).

MGL currently supplies CNG to approximately 10.97 lakh vehicles through 366 stations and provides PNG to around 26.82 lakh households in Mumbai, Thane, Mira-Bhayander, Navi Mumbai, and surrounding areas.

To cater to its customers, MGL has secured supplies through various sources, including domestically produced administered price mechanism (APM) gas, high-pressure high-temperature (HPHT) gas, and term-regasified liquefied natural gas (LNG) contracts.

“Currently, on average for the first nine months of FY25, our consumption stands at around 4.05 million standard cubic meters per day (mscmd). We anticipate at least 10% annual growth, adding approximately 0.4 mscmd each year. With an expected APM reduction of around 7%, our total requirement will be close to 0.8 mscmd annually,” Singhal explained.

MGL, the sole authorized distributor of CNG and PNG in Mumbai, Thane, and Raigad, has recently increased its Henry Hub contracts to nearly 1.45 mscmd. The company also expects upcoming HPHT bids from Reliance Industries in April 2025, amounting to about 5-6 mscmd.

Gas consumption is steadily increasing, with MGL reporting 12% year-on-year growth for the first nine months of FY25. Singhal projected that full-year growth could reach 13-14%. The industrial and commercial sectors are the key drivers, with a 14% growth rate, aided by new pipeline installations in emerging business areas. CNG demand is also expanding, with a 10% growth rate, as more vehicles transition to the fuel. Meanwhile, PNG connections grew by 3.3 lakh last year, the highest for a single entity in India, translating to a 7-8% year-on-year growth.

Infrastructure expansion remains a priority for MGL. “We used to add 25-30 stations annually, but this year we are adding 80, including 15 in our geographies and 30 under our subsidiary, Unison Enviro,” Singhal noted.

MGL is also expanding its LNG network for heavy commercial vehicles. “We launched a joint venture with Baidyanath LNG for LNG retail outlets. One station is already operational, and another recently started in Aurangabad. We have 3-4 more plots in the pipeline and expect to commission additional stations in Maharashtra and Madhya Pradesh within 7-8 months,” he added.

With a clear growth trajectory and expanding infrastructure, MGL is positioning itself to meet the rising demand for natural gas while enhancing regional connectivity and supply stability.

HBL