PNGRB invites bids for 86 city gas pacts, eyes Rs70,000 Cr investment

PNGRB invites bids for 86 city gas pacts, eyes Rs70,000 Cr investment

New Delhi: India, the biggest emitter of greenhouse gases after the US and China, has invited bids for 86 contracts under its largest city gas distribution (CGD) licensing round.

The Petroleum and Natural Gas Regulatory Board (PNGRB), which has put these 86 geographical areas (GAs) on offer under the ninth bid round, expects to attract investment of around Rs70,000 crore.

The contracts entail supplying piped cooking gas and compressed natural gas (CNG) to 174 districts across 22 states and Union territories.

The bid documents will be released on 12 April, while the licences will be awarded by October 2018, PNGRB chairman D.K. Sarraf said at a roadshow.

The bid round comes in the backdrop of the National Democratic Alliance government pushing for a gas-based economy. India plans to connect 10 million households to piped natural gas by 2020.

The market for gas and clean fuel is huge, Union petroleum minister Dharmendra Pradhan said at the roadshow.

The focus on piped natural gas follows initiative taken by the government to provide free cooking gas connections to 80 million poor families under the Pradhan Mantri Ujjwala Yojana.

India has CGD networks in 91 GAs operated by 36 firms. With 16,500km of pipelines in operation, 42 lakh domestic consumers and 33,000 industrial and commercial consumers, 19% of India’s population has been covered by the CGD network.

The 86 new GAs on offer will cover 24% of the country’s area and 29% of its population.

The bid rounds come in the backdrop of India’s plan to reduce its carbon emissions by 33-35% from its 2005 levels by 2030, as part of its commitments to the United Nations Framework Convention on Climate Change adopted by 195 countries in Paris in 2015.

Also, according to a World Health Organization report released this month, Delhi remains the most polluted city in the world.

According to PNGRB, the regulations in the current bid round have been relaxed to increase marketing exclusivity from five to eight years, with infrastructure exclusivity provided for 25 years.

“After this round, India shall have CGD coverage in nearly 50% of the total 640 districts in the country and about 50% (61 crore) of the population of the country,” the government said in a statement.

Gas accounts for around 6.2% of India’s primary energy mix as compared to a global average of 24%. The government plans to increase this to 15% by 2030. India’s gas demand is expected to be driven by the fertilizer, power, city gas distribution and steel sectors.

India’s energy demand is expected to grow at 4.2% per year over the next 25 years. The country currently consumes 145 million standard cubic meters a day (mmscmd) of gas. This includes liquefied natural gas (LNG), making India the world’s fourth-largest LNG importer.

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