Bid & Tender
All of Eastern India to Have Domestic Piped Natural Gas Connections by 2020

Date : Oct 31, 2016

As part of the National Alliance government’s strategy to promote clean fuel in the country, petroleum and natural gas ministry plans to provide piped domestic cooking gas connections to every household in eastern India by 2020. This push for piped natural gas (PNG) comes in the backdrop of the government deciding last month to provide a viability gap funding of 40% to GAIL (India) Ltd to construct the Jagdishpur-Haldia and Bokaro-Dhamra gas pipeline project. The Cabinet Committee on Economic Affairs (CCEA) approved grant of around Rs.51.76 billion for the project which has an estimated cost of Rs.129.40 billion.

 

“We are working to provide domestic piped natural gas in the entire eastern India by 2020. The work is in progress and we are hopeful to reach the target,” said a petroleum ministry official requesting anonymity. The project will encompass five states—Uttar Pradesh, Bihar, Jharkhand, West Bengal and Odisha—and connect them to the national gas grid.

 

Currently, there are 3,163,588 domestic piped natural gas connection in the country as of 31 March 2016. Another government official confirmed the development and said, “Bengal and Odisha in specific are being targeted and we hope to achieve the target by 2020.”

 

The CCEA in its September decision also approved Rs.190 billion development plan of city gas distribution (CGD) pipeline in eight cities—Varanasi, Patna, Ranchi, Jamshedpur, Kolkata, Bhubaneshwar and Cuttack—which have a combined population of 12.5 million. India has set a target of natural gas contributing 15% to its energy mix. The country is also planning a natural gas hub for market pricing discovery, as reported by InfraCircle on 14 September. Experts say that PNG has advantages over liquefied petroleum gas cylinders.

 

“With piped gas the hassle of getting and replacing a cylinder is done away with. Moreover, with piped gas one can keep a check on the consumption with an installed metre. Subsidies can also be regularised in a better way with piped gas,” said Sanjay Grover, partner at EY, a consultancy. Queries emailed to a petroleum ministry spokesperson on 25 October remained unanswered. According to the Petroleum Planning Analysis Cell, part of the ministry of petroleum and natural gas, India’s gas pipeline grid length is 16,250km. The country’s domestic gas production fell by 4.70% to 31.14 billion cu. metre (bcm) in financial year 2015-16 from 32.69 bcm in the previous year.

 

Given the expected increase in India’s natural gas demand from 473 million standard cu. metre per day (mscmd) now to 494 mscmd in 2017-18 and 523 mscmd in 2018-19, the government is working towards creating an infrastructure for the same. It recently accorded CGD networks the status of public utility. A public utility status would allow the CGD system which comprise of networks such as domestic PNG to increase its reach. The status makes it comparatively easier to secure government licences and clearances, and brings CGD networks under the ambit of Essential Commodities Act. According to petroleum and natural gas regulatory board, the total amount of CNG and PNG sold through CGD networks in the first quarter of the current financial year is 15.102 mscmd.