Commodity Online
CHANDIGARH: City Gas Distribution (CGD) is taking off in a big way in India thanks to the increased gas availability in the near future, soaring alternative liquid fuel prices and an evolving supportive regulatory framework, the segment offers substantial benefits to investors as well as consumers.

Petroleum and Natural Gas Regulatory Board (PNGRB) which regulates and oversees the development of the industry has already initiated the bidding process for the project. L Mansingh, Chairman, PNGRB said that after the first successful round of bidding for six cities including Kakinada, Dewas, Kota, Mathura, Meerut, Sonepat, the Board is in the process of second round of bidding for seven cities which include Rajahmundry, Yanam, Sehdol, Jhansi, Allahabad, Ghaziabad and Chandigarh. The bids for the second round are due to be opened on 25th June 2009.

City Gas Distribution Network promises to the investors as well as to the consumers, Mansingh told a recent roundtable on CGD Networks organized by Confederation of Indian Industry (CII) Himachal Pradesh State Council.
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Updating the industry about the 21 tenders sold so far for the second round, Mr Mansingh said that there is a dire need to bring environmentally sustainable projects. The Board would try to play the role of an “Enabler” and has already notified 14 regulations which detail the procedure for entities to secure authorization for setting up, expanding, operating CGD networks in the country. However, positive participation by the industry is critical to contemplate and implement the projects.

Quoting the success stories of Surat Tile Industry, which could be revived because of SMEs switching over to the usage of natural gas, Mansingh highlighted the catalytic role Gas could play in changing the economic scenario by impacting all aspects including the quality of life of the man on the street. The use of gas in cogeneration of power, refrigeration and heating yields 75% to 90% thermal efficiency.

Given this efficiency and the economic advantages of natural gas, industrial and commercial institutions are likely to switch to the single-fuel application, once natural gas becomes easily available. Also, the power and fertilizer sectors have accounted for approximately 70% of the consumption of natural gas in the country. The demand from other sectors would be developed around them, added Mansingh.

The City Gas Distribution is governed in India by PNGRB ACT 2006 and the Board has received expression of interest for setting up networks in around 60 cities. Setting up CGD networks in cities within a radius of 100 to 150 km would lead to an increase in gas demand as both intra-city and inter-city transport would be able to move to gas.

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