Road map for wider city gas distribution

The scale of the PNG and CNG network will make India a key destination for all major global suppliers of compressors, dispensers, meters and technology solutions

India witnessed a paradigm shift in the city gas distribution (CGD) sector in 2018-19. Proactive efforts by the Petroleum and Natural Gas Regulatory Board (PNGRB) over the ninth and tenth bidding rounds are expected to take nationwide CGD coverage to a new high. The development presents an opportunity to give more than seven out of 10 Indians living in 400 districts across 27 states and Union Territories seamless access to cleaner fuel. 

Under these rounds, 21 entities committed to invest in the new CGD network. With this, India will now see fast track development of compressed natural gas (CNG) and piped natural gas (PNG) infrastructure. 

Currently, PNG connections reach 5.1 million homes, and there are 1760 CNG stations across more than 100 districts. We are now looking at a 10-fold rise, with 50 million new PNG connections and 10,000 new CNG stations. The opportunity also opens the door to users of public transport, restaurants, hotels, small eateries, temples, crematoriums and micro, small and medium enterprises (MSMEs).

The next eight years will see a massive jump in PNG and CNG infrastructure, with the laying of over 20,000 km of steel pipelines and 100,000 km of polyethylene pipelines, attracting investments of $15-20 billion.

Enhanced mobility of CNG vehicles has been a major impediment to its adoption by owners of private vehicles. The expanded CNG network will offer customers the option of choosing a CNG station convenient to them, on the lines of other retail products and services.

The scale of the above numbers will make India a key destination for all major global suppliers of compressors, dispensers, meters, fittings and technology solutions. Domestic suppliers and construction contractors have started adding new capacities to reap the full benefit of the huge upside in infrastructure development. 

India will reap substantial social and economic benefits through development of green fuel corridors, generation of millions of jobs and a major thrust to MSMEs, not to mention the enormous impact on the environment by cutting air pollution. 

It also promises to give a significant push to start-ups and homegrown government initiatives such as Skill India and Make in India. This will also be an integral component of India’s plan to increase the share of natural gas to 15 per cent of its energy mix.  

The key issue is whether we are prepared to deliver these big numbers. While the answer is yes, we need to critically review the cumbersome and time-consuming processes and policies in place since the pre-PGNRB era, and be open to bring in reforms. 

It is essential that the government’s philosophy of improving ease of doing business percolates down to the implementation of key projects such as CGD network expansion. Ease of doing business must be reflected in approval processes. Conventional systems involving multiple authorities should make way for a fast-track, milestone-based professional certification process.   

While PNGRB has granted authorisation, infrastructure development has to take place under the authority of state governments and various central governmental authorities. Besides, the PNGRB and the petroleum ministry, state governments, gas transportation companies, oil marketing companies (OMCs) supporting co-location of CNG stations in petrol pumps, pollution control boards, Petroleum and Explosives Safety Organisation (PESO), National Highways Authority of India (NHAI), Indian Railways (IR) and public works departments (PWDs) are key stakeholders playing important roles in the development of CGD networks. Currently, CGD entities have to approach each of the stakeholders and clear their permission processes. 

One way to resolve such impediments is to bring all key stakeholders on a single platform by constituting a CGD Development Council (CDC). The CDC may include representatives of the ministry of petroleum and natural gas, ministry of finance, state governments, NHAI, IR, the PNGRB, PESO, OMCs and other stakeholders.

The key plan of action for the CDC should be to formulate a single uniform policy for the whole country. The overarching goal is to fast-track CGD development through single-window clearance, formulation of policies to incentivise natural gas adoption (by developing freight corridors), rationalisation of various government charges, a grievance redress mechanism, and inter-stakeholder issues.

The council would be a standing forum for at least the next three years, meeting every quarter. It will be an empowered body and should be in a position to take binding decisions. It will have the authority to call any agency, CGD company or gas transmission company, or seek the help of professional agencies. 

Coherence and strong government will drive the initiative. The central government can urge the state governments to see the larger benefits of developing PNG and CNG infrastructure in states. 

CDC will be a forum where all stakeholders can deliberate and take informed decisions. CGD companies will have to put their full resources solely into achieving committed PNG and CNG numbers. This will also increase the share of natural gas in the energy basket, as committed by India at international forums.    

The writer is CEO,  Adani Gas Ltd