Gujarat Energy Enters Compressed Bio-Gas Space with ₹100 Crore Investment Plan

Gujarat Energy Ltd (GEL), India’s largest city gas distribution company by sales volume, has announced its foray into the compressed biogas (CBG) sector. The company plans to set up around 200 tonnes per day (TPD) of production capacity in an initial phase involving an estimated investment of ₹100 crore.

As part of the rollout, 100 TPD of capacity is proposed within Gujarat, while the remaining 100 TPD will be developed outside the State. To execute the initiative, the Gujarat government-owned PSU has issued an expression of interest (EOI) to invite joint venture partners to set up and operate the individual plants.

According to the company's management, the move is designed to support CBG blending requirements, utilize existing natural gas infrastructure, and gradually decrease reliance on imported liquefied natural gas (LNG). Managing Director Avantika Singh informed investors that the initiative leverages the company's existing network for gas off-take.

The proposed individual plants will have capacities ranging from 10 TPD to 20 TPD, determined by feedstock availability in respective catchment areas. Under the joint venture structure, GEL proposes to hold a 49 percent stake, with selected partners owning the remaining 51 percent. These JV entities will own and operate the production facilities, while GEL supports the off-take through its city gas distribution (CGD) network.

The operational framework relies on a mix of agricultural and organic waste as feedstock. This includes paddy straw, press mud, Napier grass, cattle dung, poultry litter, and other agricultural residues. Plant locations will be chosen either within GEL’s CGD geographical areas or near the natural gas pipeline network of Gujarat Integrated Gas Ltd (GIGL), allowing produced CBG to be directly injected into and marketed through the distribution infrastructure.

This diversification aligns with the Centre’s GOBARdhan programme and the CBG Blending Obligation (CBO) applicable to the CGD sector. Concurrently, GEL continues to strengthen its LNG procurement portfolio, having imported 24 LNG cargoes in the first half of FY27 compared to 14 in the corresponding period last year, targeting a portfolio of around 4 million tonnes per annum.

In addition to biogas, the company is exploring the development of six liquefied natural gas fuelling stations across its geographical areas. These stations aim to support the adoption of LNG for long-haul transportation, targeting heavy commercial vehicles as an alternative fuel option.

GEL’s established distribution operations currently include approximately 25.3 lakh domestic PNG connections, alongside about 17,000 commercial and 4,500 industrial connections.

"Diversification into compressed biogas represents a strategic shift for established energy utilities to align with national blending mandates and secure domestic feedstock supplies. By utilizing joint venture models with majority private participation, state-owned enterprises can effectively share capital expenditure and operational risks while scaling green energy infrastructure. This move not only addresses regulatory requirements under the CBG Blending Obligation but also creates a localized economic model by integrating agricultural waste into commercial gas distribution networks." — Dr. Shishir Gupta, Founder & CEO, StartupLanes