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Interview

with Sanjay Dhawan, Managing Director, TGE Gas Engineering India

10.12.2010 / Energyboardroom

As the person responsible for establishing TGE Gas Engineering in India from scratch, what are the main challenges you’re facing in order to succeed?

The biggest challenge that any foreign company faces in India is the lack of understanding about a number of things: the regulatory framework, the Indian way of doing business, and the unique market structure in the country. For instance, the Indian PSUs are still the major investors of the local oil and gas industry. As a result, these companies are our focus and major clients. Besides cultural nuances, foreign companies have to be very familiar with the way business is done in the country. Mentally, one should be prepared to have the attitude of ‘when in Roma, do as the Romans do’.

Personally, the biggest challenge I’ve faced was to bridge the gap between a European company, headquartered in Germany, and doing business from a local Indian perspective. But, after all, that bridging was not so difficult because I had the previous experience of establishing and growing, for ten years, a foreign company in India.

To harmonize, integrate and localize TGE Gas Engineering at earliest as possible in a successful way is being a very rewarding experience. I became a kind of facilitator to my company in Germany. The facilitation consists in bringing the best industry practices of a European company and integrating it to the business potential that exists in India, providing the added-value result to our local clients. This is what primarily differentiates TGE Gas Engineering from other local engineering or contracting companies present in the Indian market.

In the interview with Mr. Haid, global CEO of TGE, he highlighted that TGE’s Indian operations were for now centered in 3 main areas: city gas distribution (CGD), Small LNG terminals and gas stations. How, in less than two years, did you manage to penetrate three of the most dynamic niches of the Indian natural gas industry?

TGE globally is very strong in EPC contracts. However, in India we decided that we should start by targeting the very promising CNG, PNG and CGD markets. These sectors don’t require turn-key solutions, but mostly PMC services. Therefore, we have started our Indian operations by offering PMC solutions, assisting the client in design engineering and overseeing the construction of the contractor. Of course the entry for TGE was not easy because we didn’t have past references, but I must say that in the last one year and a half year TGE has decisively entered the local market, particularly CGD, working closely with the PNGRB and industry majors who are investing considerable amounts, such as IGL and GSPC.

The past ten years of my accumulated experience of working with these clients helped me introduce TGE to the Indian market, even though TGE had no local track record. Now the company has been a success-story already – we have twelve CGD projects being executed, and we are doing twenty-five CNG stations in Gujarat.

With such a happening 2010, what are your expectations for TGE Gas Engineering for 2011?

In the last eighteen months we have established ourselves as a company that is now visible to the industry as a provider of engineering services in CGD, CNG stations and PNG. TGE has also been able to enter the EPC and the LNG terminal business through a partnership with Petronet LNG, and we have established LPG terminal operations through a partnership with IOCL.

All these new areas are breakthroughs that will continue to open new doors for our future development in the Indian market. TGE Gas Engineering growth projections for 2011-12 are based on these turn-key contracts that will catapult us to a very large presence in the booming Indian market.

In the coming year, TGE Gas Engineering shall be able to expand its product portfolio while also expanding our engineering services to our headquarters. This international outsourcing that we are already doing to our own headquarters is based on the good engineers we have available and their relative lower cost. Therefore, TGE India is more competitive to our clients in Europe than TGE elsewhere. For instance, right now we have a dedicated team of engineers who are working from our Delhi and Boon office providing services to our projects in Portugal, where we are building a big LNG terminal.

What assets and strategy explain TGE Gas Engineering’s success in becoming the partner of choice of so many relevant local and international players?

Our strategy is to target partnerships that go beyond contracting. TGE is entering partnerships where we are offering services on on-going bases to the clients, offering operations and maintenance support at the day-after and continue our relationship with our clients much beyond execution.

TGE Gas Engineering is also expanding its horizon to include LNG Distribution, a relatively new area in India. Actually, we are currently preparing our business strategy and we are at a very serious stage of discussions with companies like Petronet LND, IOCL and others for distribution of LNG from their terminals Kochi and elsewhere through trucks instead of pipelines. TGE makes possible to provide LNG through insulated trucks in liquid form (cryogenic form), the LNG is then brought to the clients’ premises and we convert it to gas in-loco, so the client can consume it directly. There are pipelines that are simply not feasible; in an energy-hungry country with insufficient infrastructure, TGE Gas Engineering has the solution to deliver natural gas wherever the demand is.

Energy supply and distribution is paramount to expand India’s economic growth and energy availability is a big concern for any country, India is no exception. TGE is really focused on making sure that the supply and distribution chain is effectively established by us as a key player.

The advantage that TGE has in the LNG supply distribution chain is that we have an excellent access of know-how in-house. We are not just a supplier in the chain; we are actually establishing the technology of handling LNG at minus 160C and converting it into gas supplied to the costumer. TGE’s technologies play a key role in providing the solutions our clients need to get the necessary energy at competitive prices. In a country with so many logistic hurdles, this is paramount.

Is the Indian market prepared for such technologies or do you have to educate them?

We visited a number of potential costumers, especially near Kochi last month, and I must say that I was positively surprised to find that most of our potential costumers were well aware of the technology that goes into the supply of LNG. When we started with CNG in India with buses, taxis and cars, especially in New Delhi, people weren’t even aware of what CNG stood for, but now the awareness seven or eight years later is very high thanks to the regulatory effort made in this direction. By law it is mandatory to all buses and taxis in Delhi to run on CNG. This helped to change the mind-set of the local population and promote cleaner and cheaper options.

We are looking at a platform where awareness levels are pretty high. So it is not going to be that difficult to disseminate the advantages that TGE’s technologies can bring to the Indian market.

What are your main ambitions and expectations for TGE Gas Engineering for the next three to five years in India?

I have a very positive image of the Indian energy market in particular and of the economy in general. The economy is expected to grow at an average of 8 to 9% in the next five years as opposed to minus or point five of developed economies. We at TGE Gas Engineering are very exited to be part of this success story by providing the necessary technologies to feed India’s fast growing energy demand. The Indian growth will reshape the world energy market and TGE Gas Engineering is willing to reshape India’s.

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