Sabarmatigas

About Sabarmatigas

Sabarmati Gas Limited (SGL) is a city gas distribution (CGD) company that retails natural gas. The company was incorporated on June 6, 2006, as a joint venture between Bharat Petroleum Corporation Limited (BPCL) and Gujarat State Petroleum Corporation (GSPC). It was established to develop a CGD network in five districts of North Gujarat: Gandhinagar, Mehsana, Sabarkantha, Arvalli, and Patan. Before the joint venture, BPCL independently managed the CGD business in these areas and later transferred the assets to SGL.

SGL's ownership is split between BPCL and the GSPC Group (GSPC and Gujarat State Petronet Limited - GSPL), each holding significant stakes, with the remainder held by financial institutions and individual shareholders. The company's business model focuses on supplying Piped Natural Gas (PNG) to industrial, commercial, and domestic customers, and Compressed Natural Gas (CNG) to the transportation sector. Revenue is generated from the sale of this gas. The industrial segment has historically been a primary focus, but the contribution from higher-margin CNG sales has been increasing. The company serves a diverse range of industries including ceramic, metal, dairy, pharmaceuticals, and textiles.

SGL operates a large network in its designated districts, sourcing gas through a mix of long-term contracts and the spot market. It has a gas transportation agreement with GSPL to move gas from various sources to its tap-off points. While its marketing exclusivity expired in 2014, the company maintains a dominant market position due to its established infrastructure and the significant entry barriers for competitors. It also earns regulated returns on its network tariffs and compression charges due to a 25-year physical exclusivity that began in 2009.