Adani Group, Indian Oil win big in bidding for city gas distribution

Adani Group, Indian Oil win big in bidding for city gas distribution

Gautam Adani-led Adani Gas, Indian Oil Corporation, Sudhir Mehta-led Torrent Gas, Bharat Gas Resources and Gail Gas have managed to get the maximum number of geographical areas in the ninth round of city gas distribution (CGD) bidding.

The Petroleum and Natural Gas Regulatory board has issued letter of intent to 18 successful bidders for 48 Geographical Areas (GAs) on Friday. In the bidding launched on April 12, about 86 Geographical Areas (GAs) covering 174 districts (156 complete and 18 part), spread over 22 States and Union territories (UTs) were up for grabs. Once the tenders were closed, around 406 bids were received for 86 geographical areas.

While Adani Gas got 11 areas through joint ventures and six single bids, IOC was successful in grabbing nine geographical areas. Those who won more than five blocks include Torrent Gas, Gail Gas and Bharat Gas Resources.

Other major players are Subhash Chandra-led Essel Group (1), Cadilla Group company IRM Energy (2), Assam Gas Company (2), Oil India (2), Think Gas (1), Unison Enviro (2), Maharashtra Natural Gas (1), Consortium of of AG&P LNG Marketing and Atlantic Gulf & Pacific (1), Megha Engineering and Infrastructures (3), Tripura Natural Gas Company (2) and Green Gas (2).

Meanwhile, existing major companies such as Gujarat Gas and Indraprastha Gas managed to grab only one block each.

During the current round, PNGRB has kept a floor tariff of Rs 30 per million metric British thermal unit (MMBTU) for city gas and Rs 2 per kilogram for CNG.

"As per provisions of the CGD Authorisation Regulations, authorisation shall be granted to the successful bidders after receipt of the requisite Performance Bank Guarantee from the concerned entities," PNGRB said in a statement. It added that the remaining areas are being evaluated and outcome of the same will be announced shortly.

As part of the bidding process, PNGRB had organized 16 roadshows in major cities across India and internationally in Dubai during May-June 2018. Out of the total 86 areas on offer, Adani had put in the maximum number of bids of 52, out of which 20 areas were in tie-up with IOC.

At present, city gas network is available in 91 GAs, catering only about 4 million piped natural gas (PNG) and 3 million compressed natural gas (CNG) consumers. Through the current round of bidding, city gas distribution (CGD) volumes are expected to increase from 25 million metric standard cubic metres per day (mmscmd) to 50 mmscmd in five years.

A maximum of 15 bids were received for areas, including Srikakulam, Vishkhapatnam and Vizianagram districts in the State of Andhra Pradesh. In order to maximise gas penetration and to meet the target of having 15 per cent share of gas in overall energy market, the government has revised the bidding criteria too during the current round by giving 80 per cent weightage to infrastructure creation, compared to zero per cent earlier.