Pradhan says ₹1.2 lakh cr investment planned for city gas network expansion

India will see an investment of about ₹1.2 lakh crore in the roll-out of city gas network in almost 300 districts by 2030 as a massive expansion is planned for Compressed Natural Gas (CNG) dispensing stations and pipelines supplying cooking gas to household kitchens, Oil Minister Dharmendra Pradhan said on Monday (August 26).

With a license to retail CNG and piped gas to household kitchens given out for 136 geographical areas (GAs) in the past one year, the coverage of city gas network would be 70 per cent of the country’s population, he said here.

Pradhan was speaking at an event organised to mark the commencement of work on 50 GAs awarded in the 10th bid round to firms such as Indian Oil Corp (IOC), Adani Gas, and Bharat Gas earlier this year. “Five years ago, city gas distribution (CGD) network spanned 34 GAs and now it has expanded to 228 GAs covering 406 districts,” he said.

CNG stations retailing the environment-friendly fuel to automobiles has expanded from 938 (five years ago) to 1,769 and will further be expanded to 10,000 by 2030, he said, adding that CNG-run vehicles are expected to cross 2 crore, up from about 34 lakh now. Household kitchens getting piped cooking gas has doubled to nearly 52 lakh and licenses awarded would take the number to 5 crore by 2030, he said.

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Oil regulator Petroleum and Natural Gas Regulatory Board (PNGRB) has, in one year, awarded licenses for setting up city gas distribution networks in 136 GAs. While ₹70,000 crore investment was committed in 86 GAs awarded in the 9th city gas bid-round in August last year, another ₹50,000 crore was committed in the 50 GAs awarded in the 10th round in March this year.

“The investment proposed is about ₹1.2 lakh crore,” he said. “Less than 20 per cent of the population was covered by city gas distribution network in 2014 and now after the award of 10th bid round, this will reach 70 per cent.” While 86 GAs, made up of 174 districts, were offered for bidding in the 9th round that concluded in August last year, 50 GAs, comprising of 124 districts, were offered in the 10th round.

The massive expansion of the city gas distribution network is a part of the government’s efforts to raise the share of natural gas in the energy basket to 15 per cent by 2030 from the current 6.2 per cent. Natural gas is cleaner and an environment-friendly fuel and is intended to replace some of the polluting coal and liquid fuels consumed currently.

With the completion of the 10th round of bidding, CGD would be available in 228 GAs comprising 406 districts spread over 27 states and Union Territories covering approximately 70 per cent of India’s population and 53 per cent of its geographical area.

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As many as “225 bids from 25 entities were received up to February 5, 2019 – the bid closing date (for the 10th round). And the PNGRB finalised the bids in a record time of 21 days,” PNGRB Chairman D K Sarraf said.

Prior to this, CGD licenses had been given for 178 GAs covering 280 districts (263 districts completely and 17 districts partly) spread over 26 states and UTs. These covered about 50 per cent of India’s population (as per the 2011 Census) and 35 per cent of its geographical area.

State-owned IOC won licenses to retail gas in 10 cities, while HPCL won rights for nine towns in the 10th city gas bid round. IOC won city gas distribution licenses for nine cities, most of them in Bihar and Jharkhand, on its own and one in a joint venture with Adani Gas.

HPCL, a subsidiary of state-owned Oil and Natural Gas Corp (ONGC), won licenses to retail CNG to automobiles and piped natural gas to households in nine cities in Uttar Pradesh and West Bengal. A consortium of LNG Marketing Pte Ltd and Atlantic Gulf & Pacific Company of Manila Inc won rights for nine cities in Andhra Pradesh, Karnataka, and Kerala.

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Gujarat Gas Ltd won rights for six cities, while state gas utility GAIL India’s unit GAIL Gas Ltd won rights for four. Indraprastha Gas Ltd and Torrent Gas won rights for three cities each, while Adani Gas and Bharat Gas Resources Ltd, a subsidiary of state-owned Bharat Petroleum Corp Ltd (BPCL), bagged two cities each.

In the 10th bid round, 2 crore piped natural gas connections have been committed to be given and 3,500 CNG stations will be set up. Besides, a 58,000-inch kilometer of steel pipeline will be laid for the supply of gas.