City Gas Distribution and new gas pipelines
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❡— Past few years have witnessed tremendous growth in City Gas Distribution (CGD) business in India. Today CGD sector is on the threshold of a new era ❡— Industry expert
❡— Since 2014, we have doubled the CGD networks. It is now in 94 geographical areas spread across 130 districts. State governments are showing renewed interest in city gas expansion ❡— Pradhan, Union energy minister
❡— We will be looking to add 142 more cities in the next 2 rounds of bidding!! ❡— GAIL
✴ New CGD will cover eg. Bhopal; Ludhiana and Jalandhar; Barmer, Alwar and Kota; Coimbatore and Salem; Allahabad, Faizabad, Amethi and Rai Bareli; Dehradun; Burdwan in West Bengal
Govt had promised 1cr piped gas connections by 2020 in FY18 budget. It has now brought out a gigantic tender to cover 20 states & 2UTs, or equal to 1/4th area & 29% pop!!. Alternatively, CGD will be available to 86 new GAs in 174 districts.
▬ CGD currently reaches 240m people. 3.9m places are connected but progress on new connections has been slow.
▬ Firms like Indraprastha Gas Ltd and GAIL Gas Ltd serve 4.2m domestic consumers and 3.1m CNG vehicles (via CNG filling stations)
▬ Lukewarm response to earlier tenders: Only 56 / 91 GAs (district groupings) were successfully tendered. Rest were granted on nomination.
Govts wants a successful tender, widespread coverage and faster uptake. Only genuine and profitable offers will bring sizeable Rs70,00cr investment in the sector. If successful, gas in the energy mix will rise from 6% to 15%. Bidding parameters (like lesser bank guarantees) will be business friendly to increase chances of success. Regulation for operators will be lessened.
https://economictimes.indiatimes.com/industry/energy/oil-gas/half-of-india-will-have-access-to-piped-natural-gas-for-cooking-soon-dharmendra-pradhan/articleshow/64082565.cms
▬ Bidding earlier had been faulty as it didn't encourage widespread connections and didn't limit final consumer prices. Thus progress in new connections & customer uptake was slow.
▬ Bidders will now specify no. of new connections & CNG filling stations over their term. Those that will do more will be favoured
▬ Exclusive license will be increased to 8yrs. Financial closure, supply agreement with gas providers and eligibility criteria were modified to improve implementation
▬ State govts can reduce the cost of gas connections by providing easier access to land.
〰️〰️〰️〰️〰️〰️〰️〰️〰️〰️〰️〰️
❡— Past few years have witnessed tremendous growth in City Gas Distribution (CGD) business in India. Today CGD sector is on the threshold of a new era ❡— Industry expert
❡— Since 2014, we have doubled the CGD networks. It is now in 94 geographical areas spread across 130 districts. State governments are showing renewed interest in city gas expansion ❡— Pradhan, Union energy minister
❡— We will be looking to add 142 more cities in the next 2 rounds of bidding!! ❡— GAIL
✴ New CGD will cover eg. Bhopal; Ludhiana and Jalandhar; Barmer, Alwar and Kota; Coimbatore and Salem; Allahabad, Faizabad, Amethi and Rai Bareli; Dehradun; Burdwan in West Bengal
Govt had promised 1cr piped gas connections by 2020 in FY18 budget. It has now brought out a gigantic tender to cover 20 states & 2UTs, or equal to 1/4th area & 29% pop!!. Alternatively, CGD will be available to 86 new GAs in 174 districts.
▬ CGD currently reaches 240m people. 3.9m places are connected but progress on new connections has been slow.
▬ Firms like Indraprastha Gas Ltd and GAIL Gas Ltd serve 4.2m domestic consumers and 3.1m CNG vehicles (via CNG filling stations)
▬ Lukewarm response to earlier tenders: Only 56 / 91 GAs (district groupings) were successfully tendered. Rest were granted on nomination.
Govts wants a successful tender, widespread coverage and faster uptake. Only genuine and profitable offers will bring sizeable Rs70,00cr investment in the sector. If successful, gas in the energy mix will rise from 6% to 15%. Bidding parameters (like lesser bank guarantees) will be business friendly to increase chances of success. Regulation for operators will be lessened.
https://economictimes.indiatimes.com/industry/energy/oil-gas/half-of-india-will-have-access-to-piped-natural-gas-for-cooking-soon-dharmendra-pradhan/articleshow/64082565.cms
▬ Bidding earlier had been faulty as it didn't encourage widespread connections and didn't limit final consumer prices. Thus progress in new connections & customer uptake was slow.
▬ Bidders will now specify no. of new connections & CNG filling stations over their term. Those that will do more will be favoured
▬ Exclusive license will be increased to 8yrs. Financial closure, supply agreement with gas providers and eligibility criteria were modified to improve implementation
▬ State govts can reduce the cost of gas connections by providing easier access to land.
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- City Gas Distribution: An Indian perspective
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❡— Past few years have witnessed tremendous growth in City Gas Distribution (CGD) business in India.
Today the CGD sector is on the threshold of a new era.
Sizeable implementations (of CGD projects) have resulted in developing a deeper understanding of concepts involved in engineering, regulatory, and financial domains ❡—
REPLY 45w - Status report on piped gas connections
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Govt has been slow in adding new piped gas connections (1.1m in 3yrs) to meet its target of 10m piped connections by 2020 (3.9m out of 10m done). Customer concentration to Gujarat, Maha, Delhi persists, due to low uptake by site users. CNG filling stations are expanding. GAIL says govt plans to bid out142 more cities in next 2 rounds and GAIL will ensure all are bid out.
Status report on gas pipelines---------------------------------------------
The ongoing expansion of gas pipeline network will bring gas to states that have been left behind: Western UP from a spur of W-E pipe. Urja Ganga pipe will bring gas from Odisha coast to East India states (Od, Jh, Ch, WB, Bh, UP). S India pipe will cover TN, Kar & Kerala. Pipe from Assam fields can cover NE.
REPLY 45w - Easier regulations
Amended regulation has addressed most of the concerns. Marketing exclusivity period for authorised entities will be 8 years as compared to 5 years earlier,” said K Ravichandran, Senior Vice President at ICRA.
Infrastructure build out
The bidding criteria have been revised to assign 80% weight to infrastructure creation so that gas network penetration is maximised. Earlier this was zero!!
Encouragement of forecourt LPG
Guidelines also provide for the bidder to dispense natural gas in the liquefied form.
Penalty for non-compliance
“A Year-by-year penalty will be levied if the proposed PNG connections and CNG stations are not developed. The shortfall for judging non-compliance is cumulative,” he said.
The regulator will impose a penalty of Rs 750 for shortfalls in each piped gas connection, Rs 1,50,000 for missing each inch-kilometre of the pipeline, and Rs 20 lakh for each natural gas station not installed.
Exclusion of non-serious bids
Discretionary power to do so where bids are too low and too high
REPLY 45w - GAIL fast-tracks work on City Gas Distribution project
Natural gas is seen as spurring economic development. This is particularly useful for backward East India. Gas will lead to the growth of fertilizer plants, power plants, refineries, steel plants, city gas distribution and other Industries.
GAIL is following in step with Govt policy, by laying piped gas connections and expanding gas usage. It has almost doubled its capex for FY18. "We have detailed plans for expansion of gas infra in coming years. Board has approved capex of Rs 3500cr for CY. More capex will follow the tender for 142 cities in the next 2 rounds."
It has till date awarded Rs. 7500 crore for ongoing pipeline projects of approx 4000 km in S & E India. Contracts awards have been ramped up, eg Rs. 5400 crore were awarded last FY incl pipeline procurement (Rs 3500 cr) & laying (Rs. 1900 cr).
1. South
⌂ KochiKottanad-Mangalore project (phase 2) in Kerala and Karnataka
2. East
⌂ 665km spur of existing HVJ-DVPL pipeline (lands nr Kanpur after passing through MP & Gujarat): Order for remaining 350km placed
⌂ 2655 Km Jagdispur-Haldia-Bokaro-Dhamra pipeline (JHBDPL) project: Work has started from coastal Odisha, with cities there having received CGD connections. Work will wind its way north to Jharkhand & Bihar before entering Eastern UP.
REPLY 41w
KochiKottanad-Mangalore project (phase 2): land acquisition hurdle seems to have been overcome.
thehindu.comREPLY 45w - 45w
- Existing gas pipeline (solid lines) and future lines (dotted). E India pipeline goes from Odisha coast to UP
REPLY 45w - PSUs and Private sector are building new gas pipelines.
From: https://www.slideshare.net/MarkPeterson25/gail-76682126
REPLY 45w - 45w
- Proposed and existing gas pipelines from all sources incl RGTIL, GSPL, private sector
REPLY 45w - Another depiction of proposed and existing gas pipelines.
REPLY 45w - A good read for understanding LNG import details, requirements, LNG infra and gaps in pipelines.
For example, Kochi LNG is underutilised due to delay in the build out of pipelines. "India's LNG value chain lacks a sufficient gas pipeline network connecting terminals with demand centres."
"India's LNG ship-building sector is at a nascent stage and needs domestic and foreign investment to mature. A fully developed LNG shipping sector in India would not only help meet domestic requirements but also would serve global markets."
LNG demand--------------------
In 2016, govt pushed natural gas to stranded gas power stations and urea plants. This and lower prevailing gas prices boosted India's demand for LNG imports.
Out of 24,150 MW gas power capacity, some 14,305 MW lacks access to domestic gas. As such they were could only avail expensive imported gas and were left stranded. Govt did manage the opening of 5,942 MW via subsidised gas. This help was withdrawn as lack of power demand meant help for gas projects came at the expense of more viable projects based on coal.
REPLY 45w - Urja Ganga
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Govt is/ has encouraged a shift from biomass cooking to use of cylinder gas by providing free connections to the poor (Ujjwala Yogana scheme). Govt is targeting broader uptake of gas via PNG through city gas distribution infra (CGD). It is improving gas supply to fuel refill stations via LPG (liquefied petroleum gas) and CNG (compressed natural gas).
India has plenty of upside in gas consumption. Percentage of gas consumed in urban areas via CGD is15%. In China, it is 44%. Also uptake of piped gas connection si highly concentrated to 3 areas (90% in NCR, Gujarat & Mumbai).
Urja Ganga is a trunk gas pipeline that weaves from Odisha coast to Eastern UP. A branch will go to Guwahati in Assam and link with upcoming NE regional gas grid. The primary pipeline is 1500 km or 10% of the requirement. Bhubaneswar in Odisha become the first "station city" to get benefited by UG pipeline. It is also the first city in Odisha to have CGD.
Structure of CGD operations-------------------------------------------
Long distance pipelines are owned by large corporations. The private sector owns their own small networks. A reseller buys gas and sells it to the final customer. There is usually one one pipeline owner and one reseller for any one area.
REPLY 35w - 34w
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