228 geographical areas got nod for city gas projects till 10th bidding round: Oil Ministry
Feb 03, 2022
New Delhi [India], February 3 : The Petroleum and Natural Gas Regulatory Board (PNGRB) responsible for granting authorization for developing of City Gas Distribution network, has up to the 10th CGD bidding round, authorized a total of 228 geographical areas (GAs), comprising 407 districts in 27 states and union territories for the development of CGD networks, the government informed the Lok Sabha on Thursday.
Following the launch of the 11th CGD bidding round on September 17, 2021, PNGRB received 439 bids from 26 entities against 61 GAs. In the current round, 65 GAs are being offered. Letter of Intents (LoI) for 52 GAs have been issued by PNGRB to 13 entities. The Government plans to raise the share of natural gas in the country's energy basket to 15 per cent by 2030 from the current 6.3 per cent and city gas expansion is part of the roadmap.
Megha Engineering and Infrastructures Ltd (MEIL) walked away with the most 15 licences in the 11th round of CGD bidding and Adani Total Gas, which won licenses to expand the CGD network to 14 new GAs, will invest Rs 20,000 crore in the CGD sector in the next eight years.
State-owned Indian Oil Corporation (IOC) won eight city gas license. Bharat Petroleum Corporation Ltd (BPCL) won a license for four GAs, Assam Gas Company for three, Dinesh Engineers Ltd bagged licences for two while Hindustan Petroleum Corporation, GAIL Gas, Think Gas Distribution, IRM Energy, Indraprastha Gas and Sholagasco will get one licence each.
Analysts see increasing offtake by CGD entities as a key driver of expected growth in domestic gas consumption of 9 to 11 per cent in the current fiscal after witnessing some moderation in FY2021 due to the COVID-19 pandemic.
According to Sabyasachi Majumdar, Senior Vice President and Group Head, ICRA, demand revival, post easing of lockdown measures, expansion in the pipeline network, new LNG terminals and commissioning of new fertiliser plants are the other triggers.
Further, despite the increase in gas prices, the cost economics remain favourable for CNG and PNG (domestic) compared to alternate fuels, although the competitive intensity is higher in the case of industrial fuels.
