Mahanagar Gas to Pursue More Contracts by 2025-End Amid Rising Consumption
Mahanagar Gas Ltd (MGL), the leading supplier of compressed natural gas (CNG) and piped natural gas (PNG) in Mumbai and its adjoining areas, is poised to expand its market footprint in the coming years. With a steady rise in natural gas consumption in the region, MGL plans to explore additional contracts by the end of 2025, marking a significant step in meeting the growing demand for clean energy alternatives.
Ashu Singhal, the Managing Director of MGL, shared the company’s outlook on future expansions during the India Energy Week (IEW), stating, “Currently, 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.” As demand for CNG and PNG continues to rise across Mumbai, Thane, Mira-Bhayander, Navi Mumbai, and surrounding areas, MGL’s strategic approach is focused on further solidifying its position as a key distributor.
At present, MGL serves approximately 10.97 lakh vehicles through 366 CNG stations and provides PNG to around 26.82 lakh households. To meet the diverse needs of its expanding customer base, the company has established a robust supply network, which includes domestically produced administered price mechanism (APM) gas, high-pressure high-temperature (HPHT) gas, and term-regasified liquefied natural gas (LNG) contracts.
MGL’s consumption levels are also on the rise. For the first nine months of FY25, the company reported an average consumption of approximately 4.05 million standard cubic metres per day (mscmd). Singhal noted that the company anticipates at least 10% annual growth in gas consumption, adding around 0.4 mscmd each year. While the APM reduction could impact the supply mix, MGL’s overall requirement is expected to reach 0.8 mscmd annually. Notably, MGL has increased its Henry Hub contracts to nearly 1.45 mscmd and expects significant HPHT bids from Reliance Industries in April 2025, potentially adding 5-6 mscmd. The company has seen impressive growth, reporting a 12% year-on-year increase in consumption during the first nine months of FY25, with full-year growth projections ranging from 13% to 14%. Industrial and commercial sectors have been significant drivers of this growth, while CNG demand is also growing steadily, driven by the transition of more vehicles to natural gas.
In terms of infrastructure development, MGL is prioritising the expansion of its network. The company is increasing the number of CNG stations, with plans to add 80 stations this year, compared to the usual 25-30 stations annually. These include 15 stations within MGL’s existing geographies and 30 under its subsidiary, Unison Enviro. MGL is also expanding its reach by setting up LNG retail outlets for heavy commercial vehicles. The company recently launched a joint venture with Baidyanath LNG to operate LNG stations, with one already in operation and another in Aurangabad. The company expects to commission additional LNG stations in Maharashtra and Madhya Pradesh within the next 7-8 months, further extending its network.
The growing natural gas demand reflects an increasing shift towards more sustainable energy sources in Mumbai and neighbouring regions. MGL is actively positioning itself to meet this demand, not only by expanding its distribution infrastructure but also by diversifying its offerings, such as the LNG network for heavy vehicles. By adopting a forward-looking strategy, MGL is well-placed to serve a broader customer base, contributing to the ongoing energy transition in India. As the company continues to invest in its infrastructure and technology, MGL’s future growth prospects remain strong. The company’s commitment to meeting rising demand, coupled with its focus on sustainability and expansion, ensures that MGL will remain at the forefront of the natural gas industry in India. MGL’s plans to secure more contracts and expand its infrastructure align with the steady rise in natural gas consumption in the region. The company is making substantial strides in positioning itself to be a key player in India’s clean energy future.
