India's City Gas to Mushroom: Pradhan

Almost half of India’s population will be under city gas distribution (CGD) coverage once the latest bidding round for CGD licence is over, country’s oil minister Dharmendra Pradhan said May 8.

Through the ninth bidding round for CGD licences, India is rolling out networks in 86 new geographical areas covering 174 districts. That will enable CGD coverage in nearly half of India's 640 districts and about half (or 610mn) of the population, the minister said. The bidding process which kicked off May 8 is expected to be completed by July 10.  

The minister said the government had been successful in doubling the coverage of CGD networks to 94 geographical areas spread across 130 districts. Speaking at the roadshow for the ninth CGD bid round in New Delhi, Pradhan said this is the largest ever round. It covers 20 states and two union territories of the country and reaches 29% of India’s population.

The bid process, he said, has been rationalised and investor-friendly parameters evolved to attract serious bidders, encourage competition and some unattractive requirements have been removed. Last month, the downstream regulator, the Petroleum and Natural Gas Regulatory Board (PNGRB), announced significant changes to the rules  for obtaining licences for CGD and for retailing compressed natural gas (CNG).

Pradhan stressed the importance of reforming India's gas sector. PNGRB plays an important role in refining the gas use model and is turning from a regulator into a facilitator. A 1,500-km mini gas grid in the remote north eastern states connecting all state capitals is being developed by a joint venture of five state owned companies, he said.

PNGRB chairman DK Saraf said that the current LNG infrastructure is a bottleneck and India’s regasification capacity needs to be increased from its present 26mn mt/yr to about 50mn mt/yr by 2022.