New Push To Develop City Gas Distribution Network

Petroleum and Natural Gas Regulatory Board (PNGRB) in its 111th board meeting held on 27 April 2022 has approved issuance of letters of intent (LoI) to the three successful entities for retailing CNG to automobiles and piped cooking gas to households in five geographical areas (GAs), spread over 27 districts in five states.

State-owned Bharat Petroleum Corporation Limited (BPCL) won the licence for a GA comprising Lakhimpur Kheri, Sitapur, Bahraich, Shrawasti, Balrampur, Siddharth Nagar & Maharajganj districts in Uttar Pradesh and the GA comprising Koriya, Surajpur, Balrampur and Surguja districts of Chhattisgarh.

Hindustan Petroleum Corporation Limited (HPCL) won the licence for a GA made up of Banka in Bihar as well as Dumka, Godda, Jamtara, Pakur and Sahibganj districts in Jharkhand. It also won the licence for GA made up of Birbhum, Murshidabad, Maldah and Dakshin Dinajpur districts of West Bengal.

GAIL Gas Limited, a unit of state gas utility GAIL, won the licence for the GA made up of Kondagaon, Bastar, Sukma, Narayanpur, Bijapur and Dantewada districts in Chhattisgarh.

The Petroleum and Natural Gas Regulatory Board had offered five GAs in the 11A city gas distribution (CGD) bidding round. The technical bids were opened on 8 April 2022, wherein 21 bids were received from the seven bidders. All the 21 bids were technically accepted and based upon the evaluation of financial bids, LoI to successful bidders for above five GAs was issued on 27 April 2022.

The sixth GA of Yanam in Puducherry was later added to the 11A bidding round and bids for the area are due on 10 May.

CGD Network

A city gas distribution (CGD) network is the interconnected network of pipelines to make supply of natural gas in the form of piped natural gas (PNG) to domestic, industrial or commercial premises and compressed natural gas (CNG) for use as auto-fuel in a specified GA.

PNGRB identifies GAs for authorising the development of CGD network in synchronisation with the development of natural gas pipeline connectivity and natural gas availability.

Under the Petroleum and Natural Gas Regulatory Board (PNGRB) Act 2006, PNGRB grants the authorisation to the entities for developing a CGD network (including PNG network) in a specified GA of the country.

Establishment of CNG stations and providing PNG connections are part of development of CGD network and the same is done by the authorised CGD entities in their authorised GAs as per the minimum work plan (MWP). Investment for the development of CGD network and natural gas pipeline infrastructure is done by the authorised entities, both private and public as per the techno commercial requirements.

CGD Coverage

Till May 2014, coverage of CGD networks could be expanded to about 34 GAs spread over 66 districts (part/full) in different parts of the country. It should be noted that the first CGD bidding round took place in 2008 in which six GAs were allotted.

In order to expand the reach of natural gas in the country, PNGRB had launched the 11th CGD bidding round on 17 September, 2021 for development of CGD Network in 65 GAs spread over 215 districts (212 complete and three part) in 19 states and one Union Territory covering 26 per cent of India’s population and 33 per cent of its area. Bids were received against 61 out of 65 GAs and PNGRB has issued letter of intent(s) to successful bidders with regard to 52 out of 61 GAs.

The above mentioned five GAs bid-out under 11A CGD bidding round along with the previously bid out 61 GAs under 11th CGD bidding round cover 28.47 per cent of the country’s population and 34.66 per cent of its area.

Upon finalisation of bids under these rounds, approximately 88 per cent of the country’s area is authorised for development of CGD network to provide access to natural gas to approximately 98 per cent of the country's population.

Primary And Secondary Energy

Primary energy consumption refers to the direct use or supply at the source of energy that has not been subjected to any conversion or transformation process. Common primary energy sources are coal, oil, natural gas, and biomass (such as wood). Other primary energy sources available include nuclear energy from radioactive substances, thermal energy stored in earth's interior, and potential energy due to earth's gravity.

Primary energy sources are mostly converted in industrial utilities into secondary energy sources; for example coal, oil or gas converted into steam and electricity. Primary energy can also be used directly. Some energy sources have non-energy uses, for example coal or natural gas can be used as a feedstock in fertiliser plants.

India’s Energy Mix

India is the third largest energy consumer in the world after China and the US and also one of the fastest growing energy consumers. In the year 2019, the primary energy consumption in the country was about 813 million tonnes of oil equivalent (Mtoe).

According to a report titled “India Energy Outlook 2021” released by the International Energy Agency (IEA), over 80 per cent of India’s energy needs are met by three fuels: coal, oil and solid biomass. Coal has underpinned the expansion of electricity generation and industry, and remains the largest single fuel in the energy mix. Oil consumption and imports have grown rapidly on account of rising vehicle ownership and road transport use. Biomass, primarily fuelwood, makes up a declining share of the energy mix, but is still widely used as a cooking fuel.

While the share of natural gas in India’s primary energy mix has largely remained flat in recent years at around 6 per cent compared to global share of 24 per cent, overall energy demand has risen rapidly, and there have been significant shifts in demand for natural gas in specific sectors of the economy.

Natural gas has increasingly become a preferred choice of fuel globally as it is a cleaner source of energy in comparison with other conventional fuels such as coal and oil, is found in abundance in the world as the production of natural gas has been on a rise and is more efficient way of producing useful energy and is cheaper on calorific value basis than oil. This explains India’s ambition to increase the share of natural gas in its primary energy mix to 15 per cent by 2030, up from 6.7 per cent in 2021 and 6.3 per cent in 2020.

In order to move forward, thrust has been put to enhance domestic gas production, encourage the greater utilisation of LNG and augment LNG import capacity, completion of national gas grid and speedier roll out of CGD network across the country.

The increased thrust on the CGD network can be seen in the numbers of CNG stations established by various authorised entities which has increased from 1,742 on 31 March 2019 to 3,878 on 31 January 2022. The pipelines being laid by the CGD entities have also increased from 161,992 inch kms to 352,961 inch kms on 31 January 2022.