(Bloomberg) -- Natural gas retailers in India, the world's fourth-biggest LNG buyer, need consolidation to bring economies of scale, according to a top official of a gas supplier.
“There is a lot of global interest,” Hardip Singh Rai, chief executive officer of Think Gas, told Bloomberg Television in an interview. “When any upstream player looks at where do we go to really benefit from growth in the gas market, India is the place where everyone is looking,” Rai told Bloomberg's Haslinda Amin and Yvonne Man Wednesday.
The city gas distribution sector has been expanding at a fast pace. There have been some new initiatives, including the government's priority to supply cheaper gas to households, fuel stations and industries in cities to meet Prime Minister Narendra Modi's goal of raising the share of gas in India's energy mix to 15% by 2030 from 6%. There are some four dozen players, against just half a dozen operators supplying diesel and gasoline to retail outlets.
India is one of the largest potential market for gas across the globe, Rai said. The sector consolidation will ultimately happen, but regulatory restrictions could limit the momentum, he said.
Established by private equity firm I Squared in 2018, Think Gas operates across 13 districts in India, spread over five states. I squared Capital is planning to sell about 30% in the gas distributor, which may value the firm at more than $1 billion, people familiar with the matter said earlier this month.
India's gas demand is likely to get a boost this year on the back of planned expansions in gas pipeline infrastructure, regulatory changes and a decline in gas prices, Rai said.
--With assistance from Anand Menon and David Dradransky.
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