Pankaj Kumar’s Growth Mantra for GSPL

In his over three-decade career as a bureaucrat, Pankaj Kumar has shouldered responsibilities in revenue, home, health, agriculture and disaster management departments in various capacities in Gujarat. This diverse exposure is serving him well in his current role as the state Chief Secretary as well as Chairman & Managing Director of the state-government-owned gas transmission company Gujarat State Petronet Ltd (GSPL). 

GSPL was established by the Gujarat government in 1998 to develop a state-wide gas grid that would connect supply sources and demand markets. Since its inception, the company’s end objective has been to support the efforts of its parent, Gujarat State Petroleum Corp. (GSPC), which at that time was primarily engaged in oil and gas exploration and gas trading, to develop a robust gas market in the western state.

In the past decade, as the 10-company strong and Rs 20,000-crore turnover GSPC group has gradually retracted from exploration and production activities, GSPL has catalysed Gujarat’s transformation into a gas-based economy. With over 2,700 km of natural gas pipelines covering the state’s 25 districts, GSPL is India’s second-largest natural gas transmission infrastructure company. Kumar is the winner in the Oil & Gas category of the BT-PwC India’s Best CEOs ranking. “GSPL is the only pure-play natural gas transmission company in India, focussed on providing cleaner energy to every possible consumer to cut down on pollution. This has been achieved with more than 70 per cent network penetration and our 100 per cent area under city gas distribution (CGD) licensing,” says Kumar. In FY21, GSPL reported Rs 2,079.42 crore revenue from operations, with profit after tax of Rs924.24 crore,

Expansive Distribution Network 

GSPL transports over 37 million metric standard cubic meters per day (MMSCMD) of gas and caters to diverse customers, including oil refineries, fertiliser plants, petrochemical plants, power plants and CGD entities. As a result of the targeted initiatives by GSPL, the share of natural gas in Gujarat’s primary fuel mix is over 25 per cent, almost four times the national average of 6-7 per cent, and even higher than the global average of 24 per cent, mentions Kumar with immense pride. Three of India’s six operational LNG import and regasification terminals accounting for nearly two-thirds of the country’s capacity are in Gujarat. More than 87 per cent of the country’s LNG imports in FY21 were routed through the state. “The state has the presence of a large number of industrial consumers including automobiles, ceramics, pharma and chemicals, among others. It also has access to LNG capacity of 27.5 million metric tonnes per annum (MMTPA), while a total of 15 MMTPA of incremental capacity is expected to be added soon. GSPL has been swift in making natural gas available to industries looking for greener alternatives,” says Swarnendu Bhushan, Senior Oil & Gas Analyst at Motilal Oswal Financial Services.

In the immediate aftermath of the March 2020 Covid-19-induced nationwide lockdown, there was a sharp decline in gas demand and offtake remained low for several weeks due to a disruption in economic activity. “We kept our supplies running uninterruptedly and also worked closely with... GSPC for optimising gas sup plies,” informs Kumar. The proactive approach came in handy with gas demand witnessing a V-shaped recovery due to a sudden rebound in economic activity. 

Well-oiled Structure

Efficient management practices have made the compa ny largely debt-free. Kumar is now focussing on making GSPL’s balance sheet stronger. Several new projects are already in the pipeline. Completion of the second phase of the 1,650-km Mehsana-Bhatinda pipeline remains a priority. The trunkline with a 36-inch diameter pipeline will have various spur lines along the route. The first phase of the Mehsana-Bathinda and Bathinda-Gurdaspur pipe line totalling 440 km was commissioned in October 2018. “Work is in advanced stages of completion and we expect to commission the pipeline shortly,” says Kumar. GSPL plans to invest Rs 4,300 crore in adding more than 1,000 km of the pipeline network. It proposes primarily to connect to the upcoming LNG terminals in Gujarat as well as interconnect with the Mehsana-Bathinda pipeline network for gas supply security to northern states. “Under his [Kumar’s] guidance, the company has been focussing on further expanding its reach to industries and on capitalising on the upcoming LNG terminals in the state,” points out Motilal Oswal’s Bhushan. “It has also transferred geographical areas of Amritsar and Bhatinda to GGL, to focus on its core strength of gas transportation. It is further expediting the Mehsana-Bhatinda pipeline, which will increase its connectivity to northern India.”

A 1986 batch officer of the Indian Administrative Service (IAS), Kumar cut his teeth as an administrator in several districts of the state at the beginning of his career. He is known for effecting changes in work culture for enhanced transparency and accountability in the government. He has a simple mantra for managing his various responsibilities: “The ability to demystify the complexity and come up with a simple workable solution is one of the main tasks of a senior manager.”