Your Company intends to sustain its current momentum in infrastructure
development, ensuring energy security, diversification, market expansion, and growth in
renewables.
Dear Shareholders,
It is my privilege to share with you the Annual Report for the FY 2024,
marking the 40 years of your Company's sustainable journey towards ensuring energy justice
and clean energy access across the nation.
During FY 2024, your Company significantly outperformed its past
achievements on multiple fronts. The market capitalisation of your Company reached
'1,57,276 crores, @ '239.2 per share on July 16, 2024. This exceptional performance was
further recognised by the attainment of an 'Excellent' Memorandum of Understanding (MoU)
rating for the FY 2023, marking the second consecutive year of this distinguished
achievement. The achievement of these milestones not only highlights the Company's strong
performance but also stands as a testament to the trust placed in it by investors.
I am happy to share that your Company's financial performance in FY
2024 was indeed stellar. Your Company reported Profit before Tax (PBT) of ' 11,555 crore
in FY 2024, up by 75 % from ' 6,584 crore in FY 2023. Profit after Tax (PAT) in FY 2024
stood at ' 8,836 crore as against ' 5,302 crore in FY 2023, an increase of 67 %, while
Revenue from Operations stood at ' 1,30,638 crore in FY 2024 as against ' 1,44,302 crore
in FY 2023. During the year your Company also achieved the highest ever capex of ' 11,426
crore. Your Company has attained these under the uncertain business environment that
prevailed across all business verticals.
Building on our legacy as a leading player in the natural gas sector,
your Company has achieved significant milestones in enhancing energy security and bridging
India's demand- supply gap for natural gas. We have signed two 10-year LNG supply
agreements, starting in 2026: 1 MMTPA from Vitol Asia Pte Ltd, Singapore and 0.5 MMTPA
from ADNOC Gas, UAE. Additionally, GAIL will offtake 4.5 MMTPA from the renewed LNG SPA
signed between Qatar Energy LNG and PLL, with supplies commencing in 2028 for a period of
20 years.
GAIL has successfully onboarded and chartered the long-term LNG vessel,
GAIL Urja, and has entered into a 14-year Time Charter Party agreement for a newbuild LNG
carrier. The time charter for this LNG carrier will begin in early 2025. GAIL's fleet of
five LNG carriers will enable the Company to meet the requirement of transporting
contracted LNG volumes to India.
Your Company, with an existing network of approximately 16,243 km of
natural gas pipelines, has been at the forefront of laying Natural Gas Pipelines.
Persistent efforts have been
made towards completing the National Gas Grid (NGG), which is essential
for India's energy security and serves as the backbone for achieving a gas-based economy.
GAIL had the privilege of having the Hon'ble Prime Minister, Shri
Narendra Modi, lay the foundation stones for the Krishnagiri to Coimbatore section of
KKBMPL II and the Nagpur-Jharsuguda section of MNJPL. Additionally, the Hon'ble Prime
Minister dedicated to the nation the Dhamra- Angul Pipeline and the Barauni-Guwahati
Pipeline, both part of the PM Urja Ganga Yojna. GAIL is actively working on laying
approximately 3,400 km of new natural gas pipelines across the country. Major projects
include the Durgapur- Haldia Pipeline & Dhamra-Haldia Pipeline (part of JHBDPL), the
Srikakulam-Angul Pipeline, the Mumbai-Nagpur-Jharsuguda Pipeline, the
Krishnagiri-Coimbatore Section of KKBMPL, and the Gurdaspur-Jammu Pipeline.
In natural gas transmission, the average gas transmission through this
network during FY 2024 increased by 12% to reach an all-time high of 120.46 MMSCMD as
against 107.28 MMSCMD in the previous financial year. Sectoral revenue from the natural
gas transmission segment in FY 2024 increased by 54.5% to ' 10,292 crore compared to '
6,661 crore in FY 2023, mainly due to an increase in transmission volume along with an
upward revision in natural gas transmission tariff.
I am pleased to share that your Board has approved the formation of an
LNG Retail vertical. With a strategic investment of '650 crore, this initiative will
explore opportunities for LNG dispensing infrastructure and last-mile connectivity along
the Golden Quadrilateral, National Highways and mining areas, providing LNG as a
substitute fuel having lower carbon footprints.
Your Company successfully commissioned India's first Small Scale LNG
(SSLNG) Skid at GAIL, Vijaipur, showcasing the potential of SSLNG technology in connecting
isolated sources and consumers to the natural gas supply chain. In line with government
priorities to bolster the growth of the gas market and improve accessibility throughout
the country, SSLNG is envisioned to play a pivotal role in fuelling LNG use in
transportation, City Gas Distribution (CGD), railways, and other sectors.
GAIL has a strong focus on city gas distribution (CGD) business and
GAIL, along with its group companies, is now the largest CGD operator in India. GAIL group
of companies are authorized in 72 GAs across the nation out of the total 307 GAs. This
year, your Company along with its group Companies has added 11.06 lakh PNG connections and
422 CNG stations summing up to ~83.4 lakh PNG customers and ~2770 CNG stations across the
country. In the latest CGD
round conducted by PNGRB, GAIL group Company-Tripura Natural Gas
Company Limited (TNGCL) secured two GAs - Mizoram and Manipur, marking a significant
milestone in extending our reach to the northeastern part of the nation. Also, last year,
GAIL's Joint Venture Mahanagar Gas Limited (MGL) acquired the entire equity of Unison
Enviro Private Limited (UEPL). UEPL had been authorized two GAs in Maharashtra and one GA
in Karnataka by PNGRB.
I am pleased to share that the petrochemical business has started
indicating a positive turnaround. During FY 2024, your Company's overall production of
Petrochemicals surged by 76% to 777 TMT, compared to 442 TMT in FY 2023 and sales of
Petrochemicals increased by 97% to 787 TMT, compared to 399 TMT in the FY 2023. Revenue
from Operations from this segment rose by 58% to '7,753 crore, compared to ' 4,917 crore
in FY 2023. Your Company has been actively involved in exploring ways to integrate
sustainable business practices while minimizing energy usage. With that in mind, your
Board has sanctioned the laying of C2/C3 liquid pipeline, which will directly transport
these hydrocarbons extracted at Vijaipur to Pata, having an estimated Project Cost of '
1,792 crore with a commissioning period of 32 months.
Your Company is conscious of the fact that future business growth
entails sustainable business practices and decarbonization measures. With immense pride, I
am happy to share that your Company is well-positioned to become a leader in the energy
transition and your Board has approved the advancement of the Net Zero target by five
years from 2040 to 2035, to achieve 100% reduction in Scope 1& 2 emissions along with
the revised roadmap to achieve the same. Efforts are being made for the penetration of
renewable energy in the supply mix, with focus on electrification, Hydrogen, CBG etc. as
key drivers of GAIL's energy transition journey.
Your Company has been making strategic choices to build a sustainable
value chain, inclusive of future-ready business models with customer centricity at the
core, improving energy management diversifying energy portfolios, and pursuing capital
excellence and project capabilities. GAIL is setting up CBG plant in Ranchi as part of the
SATAT initiative and has formed a strategic alliance with TruAlt Bioenergy Limited for
establishing 10 CBG plants. This entails an investment of ~' 600 crore (USD 72 Million)
with a production target of 33 Million kgs per year. Advancing its endeavors to reduce its
carbon footprint, GAIL is continuing to run the pilot Hydrogen Blending project in Indore
and has installed the country's first MW scale Green Hydrogen electrolyser in Vijaipur,
Madhya Pradesh. The 10 MW electrolyser has a capacity of producing
4.3 TPD of Hydrogen through electrolysis using renewable power. GAIL is
also setting up 20 MW solar power plants
at Vijaipur to meet the green power requirement for the electrolyzer.
Your Company has successfully embedded safety in its corporate culture.
Health, Safety, and Environment (HSE) are essential to our operations with an achieved
"HSE Score" of 95.75% in FY 2024 exceeding the target of 93.5%. This
demonstrates our strong dedication to safety and environmental standards.
Corporate governance, transparency, and ethics have been fundamental
pillars of your Company's integrity and consistent growth. "NIL" Comments from
CAG for the 15th consecutive year stands as a testimony to it. Company's credit worthiness
continues to be at par with the industry's best with Moody's Investor Services maintaining
Credit Rating at 'Baa3 stable,' constrained by India's Sovereign Rating and India Ratings
reaffirmation of Long-Term Issuer Rating as "IND AAA" with a Stable Outlook. I
am glad to share that investments have been initiated in the Tri-party Repo System (TREPS)
and Clearcorp Repo Order Matching System (CROMS). In 2024, your Company has been once
again included in the FTSE4Good Index Series, upgraded from "C" to "B"
level in the CDP Global ESG Rating under the Climate Change category, and has made
significant progress in adopting the Sustainable Factory GreenCo Rating across the work
centres.
It gives me immense pride to share that your Company achieved the
highest-ever procurement value from the Government e-Marketplace (GeM) Portal, amounting
to approximately '2700 Cr. GAIL surpassed procurement targets with approx. 56% procurement
from Micro and Small Enterprises (MSEs), with approx. 6% and 4% procurement from MSEs
owned by Women and SC/ST entrepreneurs respectively, exceeding subtargets.
Your Company recognizes the importance of R&D to improve its
technological capabilities to remain competitive. GAIL R&D has awarded 4 numbers of
new projects in the thrust areas of pipeline integrity management, catalyst development
for SNG, PEM water electrolysers & fuel cells. I am glad to share that GAIL has been
granted 5 no's of Indian patents in the areas of wastewater treatment with hydrate process
(IIT- Madras), cross-layer protocol Wanet and method for wireless communication
(BITS-Goa), Novel bi-phase Na-Titanate high- performance anode material for Na-ion
batteries (IIT-Bombay), metal-hydride based Thermochemical Reactor Cartridge for storage
of heat energy (IISc-Bengaluru and a grid-independent fuel cell system with a unitized (dc
& ac) power conditioner (CFCT-Chennai)). Going forward, your Company has decided to
set up its own R&D centre and progress is being made as per roadmap.
Your Company has made notable progress in establishing its brand
identity and distinguishing itself from the competition. Your Company has successfully
launched several campaigns to ignite nationwide interest in the natural gas sector,
including "Together for Clean Air," "Khushiyon ki Energy with Natural
Gas," and "Reconnect to Roots." These campaigns, conducted on GAIL's
digital platforms, collectively engaged over 100 million individuals in the past year. The
year brought us several laurels like "Best Natural Gas Transportation Company of the
Year Award" by FIPI; the prestigious "Asian Oil and Gas Awards 2023" for
the categories "Midstream Project of the Year" for installation of the world's
first floating Compressed Natural Gas (CNG) station at Varanasi and "Innovation
Award" for the reduction in LNG Shipping cost & emissions through Ship- to-Ship
(STS) transfer of LNG with backhauling at the event held in Kuala Lumpur, Malaysia;
prestigious International Award for Training and Development by IFTDO (International
Federation of Training and Development Organizations); award for second-highest percentage
procurement from SC/ST owned MSEs in the highest procurement category (>' 1000 Cr.) for
FY 2022-23 by Ministry of MSME etc.
Your Company's CSR activities are focused on fostering inclusive growth
and ensuring the alignment of our actions with the values and aspirations of stakeholders.
To enhance outreach efforts, your Company contributed beyond the statutory CSR budget
during the year. The CSR projects have consistently brought about significant positive
changes over the years for numerous disadvantaged individuals touching more than 13 lakh
lives in the last year itself. Noteworthy examples include the Utkarsh project for
economically disadvantaged students which witnessed 97% of students qualifying for the JEE
Mains and 100% for NEET; numerous skill development programs that have improved employment
opportunities for over 1,500 individuals; and the provision of medical services in remote
areas through Mobile Medical Units (MMUs) under the Arogya project.
Your Company recognises that the human resource function is one of the
major drivers of business value. GAIL has been proactively taking up numerous initiatives
like Wellness Hour- Spandan, project Samanvaya to improve the effectiveness of HR services
and enhance employee experience, youth Engagement platform - 'OJAS' to promote engagement
and development of young executives, 'GAIL Abha' an entrepreneurial platform for spouses
of employees.
Moving forward, GAIL aims to take a leading position in realizing the
vision of the Government of India and actively strives to deliver enduring value to our
shareholders. We remain optimistic about the future and are focused on achieving
sustainable growth while upholding our commitment to environmental stewardship and
community engagement. To meet the growing demand for petrochemicals in the country, your
company is exploring the feasibility of setting up a greenfield ethane cracker. Besides,
coal gasification-based urea project being set up through its joint venture company,
Talcher Fertilisers Limited (TFL) your Company is also working on feasibility of another
coal gasification project in Joint Venture with Coal India Ltd. to produce Synthetic
Natural Gas. Your company is working on setting up of 1-G 500 KLPD bio-ethanol plant and
collaborating with industry leaders in the field of CO2 valorization to reduce the carbon
footprint at its installations. Additionally, feasibility of building/ expanding natural
gas and LPG pipelines is also underway.
Your Company intends to sustain its current momentum in infrastructure
development, ensuring energy security, diversification, market expansion, and growth in
renewables.
Your Company is also enhancing LNG and natural gas penetration while
playing a pivotal role in energy transition and decarbonization efforts.
Ever since its inception, your Company has emphasized the importance of
building strong relations with Customers, Vendors, Partners, Communities, Regulators, and
other Stakeholders, involving interactions with Central and State Governments. I am
privileged to convey my gratitude to all stakeholders for their steadfast belief and
support of GAIL's initiatives.
Acknowledging the shareholders, for your unwavering commitment to
GAIL's growth journey.
Sd/-
Sandeep Kumar Gupta
Chairman & Managing Director