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    India's Gujarat State to be Fully Covered by Piped Gas: Report

Summary

The western Indian state of Gujarat will be the first state in the country to be fully covered under city gas distribution (CGD) network.

by: Shardul Sharma

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India's Gujarat State to be Fully Covered by Piped Gas: Report

The western Indian state of Gujarat will be the first state in the country to be fully covered under city gas distribution (CGD) network once the latest bidding round for allocating CGD licence is over, according to India’s downstream regulator, Petroleum and Natural Gas Regulatory Board (PNGRB).

“Gujarat is going to be the first state in the country with 100% CGD network coverage in the next couple of months,” said PNGRB chairperson DK Sarraf, who was in Gandhinagar, the state capital, June 13 for the investors’ meet organised as part of the latest round of CGD bidding, Times of India reported June 14.

In a bid to expand the area covered by the CGD network, India has embarked on its biggest bidding round for allocating licences. In Gujarat, eight geographical areas (GAs) have been opened for bidding. The eight GAs being offered under the latest round of bidding in Gujarat cover districts such as Surendranagar, Narmada, Porbandar, Junagadh, Mahisagar, Tapi, Dangs and Gir Somnath, parts of the districts of Morbi, Botad, Navsari, Kheda and Surat. Countrywide, PNGRB has opened 86 new GA’s for bidding. The bidding process is expected to be completed by July 10 and licences are expected to be allocated by October.

Talking about the robust development of the city gas distribution market in Gujarat, Sarraf said, “Natural gas accounts for 25% of the total energy consumption in Gujarat, which is higher than 24% average in the world.” With 1.75mn connections, Gujarat has the highest number of households connected with piped natural gas (PNG) across India. The state also has the highest number of industrial (4,417) and commercial (17,439) PNG connections, Times of India said.

Gujarat, Mumbai and Delhi National Capital Region (NCR) are the only regions in India with meaningful CGD network. This means the CGD segment in India is highly concentrated, with the top three companies accounting for most of the sales volumes: namely, Mahanagar Gas in Mumbai and adjoining districts, Indraprastha Gas in Delhi NCR and Gujarat Gas in major cities in Gujarat.

The Narendra Modi government is looking to increase the share of gas in India’s energy mix from 6-7% at present to 15% in next five years. The government believes CGD segment will a major demand driver.