Bharat Gas Resources Ltd, the subsidiary of refining and marketing firm Bharat Petroleum Corp Ltd (BPCL) involved in the city gas distribution business, would invest around Rs 80-90 billion to complete 11 projects it bagged in the ninth round of bidding, a senior company official said. These projects come with strict commitments on execution, and have to be completed within eight years from the date of award, said BPCL’s executive director Rajendra Natekar.
The Petroleum and Natural Gas Regulatory Board (PNRGB) has estimated Rs 700 billion of investments for all the 87 projects allocated in the ninth round, one of the largest round to date, covering 150 districts. The formal inauguration of the projects are slated for Thursday, and PNGRB would also launch the tenth round, opening up another 50 areas. Till the end of the eighth round, there were 90 projects in all awarded.
All the projects awarded under the ninth round have to achieve financial closure by May next year, and the promoters have bid with Rs 500 million bank guarantee, Natekar said. The projects awarded are all around the existing large natural gas pipelines and the maximum coverage would be about 200 km. The tenth round is also following a similar strategy of awarding areas that have proximity to major natural gas pipelines.
“Obviously, there is a cost. It depends on how attractive the area is, but that is part of the capex, and all of us have gone with the idea in mind that we have to pull a pipeline for 200 km,” Natekar said. BGRL said it would be looking at all the 50 areas under offer and bid aggressively if it is convinced of the demand. India is aiming to increase the natural gas mix in its energy basket and raise the share of natural gas to 15 per cent from the current 6.5 per cent. As far as the CGD coverage goes, PNGRB estimates by the end of ninth round 50 per cent of the country would be covered, and 75 per cent at the end of the tenth round.
