Capstone Turbine Corp (NASDAQ:CPST), the maker of clean-energy microturbines, announced Thursday that its first C200 Signature Series microturbine was headed to India’s oil country in the northeastern state of Assam.
The order secured by Brio Energy Pvt Ltd, Capstone’s exclusive distributor in India, marks the first C200 Signature Series microturbine order from India’s booming oil and gas sector.
The unit is scheduled to be commissioned in July and will be installed in Assam, an oil-rich state in the northeastern region of India. The flare gas fueled C200S microturbine will generate on-site power for the remote oilfield operation while at the same time reducing the flaring of associated gas which negatively impacts the environment.
The company said the order underlines the opportunity represented by India’s high-octane economy, which is ranked the third-largest market by purchasing power parity.
India’s economy grew an average of around 7.3% a year in the almost five years under recently re-elected Indian Prime Minister Narendra Modi.
“India is a newly developing market for Capstone and has the potential to become a significant part of our double-digit revenue growth plan and would contribute to our revenue diversification initiative,” said Capstone CEO Darren Jamison. “This initiative yielded positive results in fiscal 2019, where we sold to 63 different distributors in 41 different countries.”
Jamison said Capstone was building its near-term profitability plan around four core business initiatives and key strategic pillars related to improving cash flows, double-digit revenue growth, improving diversification and increasing operating expense absorption.
Ability to provide onsite power
The company said that due to the remote nature of some of the oil locations in places like Assam, operators not only have to sink capital into exploration, but generate their own power or deliver diesel fuel daily.
“Capstone turbines offer the operator the ability to use available wellhead gas as free fuel for low emission, high-reliability onsite power generation,” said the company.
India is currently a net importer of oil and gas as the country is the third-largest energy consumer globally. Through new policies and foreign investments focusing on increased oil exploration, India is looking to reduce its oil import requirement to 67%, from more than 82%.
Promising win for local distributor
“This is a promising win for our local distributor, and we anticipate capitalizing on this first installation with increased business going forward. Oil deposits were first discovered in the region pre-1900 but it was not until recent years that we saw a push by the government to grow production,” said Jim Crouse, executive vice president of sales and marketing at Capstone. “Realizing that there is increased need, the Government in India announced that it has plans to expand the existing gas pipeline network across the country by committing nearly $10 billion to the project.”
Capstone, based in Van Nuys, California, offers a product lineup of microturbines that can produce anywhere from 30 kilowatts to 10 megawatts of power, operating on a variety of gaseous or liquid fuels. To date, Capstone has shipped over 9,000 units to 73 countries.
Contact Uttara Choudhury at [email protected]