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As GAIL completes its glorious 35th year, it gives me a great pleasure and an enormous amount of pride to present to you the highlights of spectacular achievements witnessed by your company in the year 2018-19.
Global energy consumption in 2018 increased at nearly twice the average rate of growth since 2010, primarily driven by a robust global economy and higher heating and cooling needs in some parts of the world. Higher electricity demand was responsible for over half of the growth in energy needs. Demand for all fuels increased, led by natural gas, even as solar and wind posted double digit growth. As a result of higher energy consumption, CO2 emissions rose by 2% last year and hit a new record. India saw primary energy demand increase by 8% i.e. around 60 Million Tonnes of Oil Equivalent (Mtoe), accounting for 15% of global growth, the third-largest share. Growth in India was led by coal (for power generation) and oil (for transport), the first and second biggest contributors to energy demand growth, respectively.
Your Company’s growth continues...
Your Company recorded highest ever turnover and PAT in its history as turnover surged by 39 % and Profit after Tax (PAT) increased by 30%. Further, as a result of the increase in PAT, Earnings per share (EPS) has gone up by 30.5%. Net worth also rose to Rs. 39,062 crore as compared to previous year where it stood up to Rs. 35,142 crore. The Debt and interest coverage ratios indicate a healthy financial position and good market capitalization and thereby encouraging the Company to venture into new projects.
I am glad to inform you that your company’s Board has approved revival of existing LPG plant at Usar, Maharashtra by converting it into 500 KTA Polypropylene (PP) complex at an investment of around Rs. 8,800 Crore. This is first of its kind project in India which would be using Propane Dehydrogenation technology for production of Propylene integrated with the downstream Polypropylene (PP) unit. Further, GAIL Board has also approved setting up of 60 KTA PP unit at existing Petrochemical complex at Pata. Addition of above PP capacities will augment and complement GAIL’s current polymer portfolio which is presently dominated by Polyethylene (PE).
In coming few years, your company shall be making investment of around Rs. 45,000 Crore in major cross country pipeline projects, such as, Urja Ganga Project, Kochi Kootanad Banglaore Mangalore Pipeline, Indradhanush Gas Grid (North East Grid in joint venture mode) and other pipelines connecting crucial supply and demand centers for completion of the envisaged National Gas Grid (NGG). As part of this endeavor, your company has recently been authorized by PNGRB to lay Srikakulam Angul natural gas Pipeline of length 690 KM including spurlines through recently concluded bidding process.This pipeline will extend the reach of natural gas in the Eastern coast and will act as an important connecting limb with other pipelines of National Gas Grid (NGG).
A sneak peek into the significant performance in the various business segments
Your Company catalogued substantial growth in all its business segments for the FY 2018-19. Natural Gas which is the core area of your company had sales increasing from 85.01 MSCMD last year to 96.93 MMSCMD including international LNG sales. Growth in natural gas transmission has been over 2% with average transmission of 107.43 MMSCMD. Petrochemical sales increased to 735 KT from 674 KT in 2017-18. Consequently, gross revenue of your company from Petrochemicals in FY 1819 increased by 15%. In the LPG Transmission segment, throughput of Jamnagar-Loni and theVizag-Secunderabad pipeline networks improved to an overall of 3.97 MMTPA from 3.7 MMTPA as compared to previous year. Total liquid hydrocarbon production was about 1.32 Million MT, of which, almost 90% constituted LPG and Propane. In the Exploration and production segment, Revenue of Rs. 639 Crores has been generated from sale of hydrocarbons from 4 producing blocks during the year 2018-19. The total volume sold to City Gas Distribution sector continued to show positive growth. GAIL is currently supplying domestic gas to the tune of 13.19 MMSCMD to the City Gas Distribution (CGD) sector.
Our alliances & new ventures emerge stronger and profitable as before
Your Company floated two new JointVenture Companies namely Bengal Gas Company Limited in West Bengal for city gas distribution and Indradhanush Gas Grid Limited in Assam to lay down natural gas pipelines. Gas supply through pipeline and cascades has commenced in Varanasi, Bhubaneswar, Cuttack and Patna in this financial year. Apart from that, your Company has already been awarded six cities for distribution of gas as part of URJA Ganga project namely, Varanasi, Bhubaneswar, Cuttack, Patna, Ranchi and Jamshedpur.
Some Noteworthy achievements during the year
Your Company achieved ‘Excellent’ MoU rating for the financial year 2017-18 with a score of 92.76 from MoP&NG, and same rating is expected to be seen for 2018-19 also. It has also got the highest domestic credit rating in India which is AAA from ICRA, CARE and India Rating.
Your Company has adopted a two-pronged approach including physical network expansion and downstream market development through customer focus.To increase transparency and efficiency, an online portal has already been established to book pipeline capacity online on first come - first serve basis. Over 1000 Capacity Tranche (CT) requests have been successfully executed during FY 2018-19 through the portal. This has been the first such Open Access Portal implemented by any gas transporter and customers and stakeholders have appreciated the step taken to leverage technology for increasing ease of business and transparency.
Your Company’s subsidiary and joint venture companies engaged in City Gas Distribution (CGD) have participated and won 15 Geographical Areas in the 9th round of CGD Bidding and 8 Geographical Areas (GAs) in the 10th round of CGD bidding. After conclusion of the last two rounds of bidding, GAIL, its subsidiary and Joint Venture Companies are now authorized to operate in 62 out of the 228 GAs across the country.
Women empowerment and safety at workplace continues to be strongly promoted and as on March 31, 2019, the workforce comprised of 284 women in your Company having no complaints with regard to Sexual Harassment of Women at Workplace.
Corporate Vigilance department of your Company carried out certain process improvements for effective utilization of its resources thereby ensuring overall good governance. GAIL’s Corporate RTI Cell has achieved 100% disposal rate in respect of RTI Applications received for FY 2018-l9.The Committee of Parliament on Official Language appreciated your Company’s efforts in Promoting and Implementing Hindi language successfully every year.
Recently, your company’s Board of Directors approved GAIL Corporate Strategy that charts out the path of growth for next ten years. GAIL shall continue to lay focus on the growth of existing core business segments -natural gas, petrochemicals and gas processing. Further, GAIL shall be striving to look for diversified and fresh business opportunities which have the potential to become new growth engine in future. GAIL shall be exploring new domain of high growth specialty chemicals for setting up of manufacturing capacity in India. Given the imminent disruptions in the field of energy and transport, your company is exploring opportunities and business potential in new technological areas.
B. C. Tripathi
Chairman & Managing Director