The Petroleum and Natural Gas Regulatory Board (PNGRB) chairman L Mansingh said that 19 out of the total 330 city gas distribution (CGD) networks identified in the country for supply of natural gas to domestic users are located in Andhra Pradesh.
At a conference on ‘Andhra Pradesh: Hub of natural gas in India’, organised by the Confederation of Indian Industry on Tuesday, Mansingh said the government was planning to start gas supplies for transportation and cooking to at least 100 cities and towns in less than three years.
“The growth in the gas sector would be bigger than that of the telecom sector. Currently, 10 cities have piped gas networks for domestic use,” he said, adding about 2.5 million vehicles would run on gas in three years from the present 700,000.
India currently has a gas pipeline network of around 10,000 km. State-owned gas transportation major GAIL (India) Ltd operates around 7,000 km pipeline with most of it in northern and western regions.
Mansingh said pricing of gas would be governed by market conditions. “Exports are not allowed from new discoveries and this would ensure that the prices are kept at reasonable levels. The board has received expression of interests for Surat-Paradip and other pipeline projects,” he said. It has referred some proposals for a wider discussion.
He asked the state government to reduce VAT on gas from 12 per cent to 4 per cent to make gas available at lower costs than other fuels — coal, petrol, diesel, naphtha. “Create a demand for gas in the state to use it in the state only,” he said.
Reliance Industries Limited (RIL) international operations (exploration and production) president Atul Chandra said exploration and production businesses were fraught with risks and therefore the production sharing contracts should not be altered.
RIL has announced that the gas output from the D6 block in the Krishna Godavari basin would be ramped up to 80 million cubic metre per day (mcmd) shortly. India’s gas production has increased to about 120 mcmd, including 44 mcmd from D6.
Speaking on the occasion, chief minister K Rosaiah said Andhra Pradesh was committed to industrialisation. “A few problems surfaced recently, but the Centre would sort them out,” he said, adding the state was strengthening the infrastructure requirements with focus on expansion of gas-transmission pipelines.
The Andhra government will pick up five per cent equity in Bhagyanagar Gas Limited (BGL) , which has already taken up the city gas distribution project in Hyderabad, Vijayawada and Kakinada.
BGL proposes to provide 266,000 domestic connections and 50 CNG stations for public transport in the next five years in Hyderabad.
The company would lay a 645-km pipeline in Vijayawada and provide around 225,000 domestic connections in five years apart from 1,000 connections by July next year. The first online CNG-based depot would be commissioned in April 2010 while the first CNG station in Kakinada would be commissioned in January 2010, the chief minister said.
The state has appointed Infrastructure Corporation of Andhra Pradesh (Incap) as the nodal agency for the development of gas project in other towns.
Rosaiah also urged the Centre to revive the fertiliser plants in the state by allocating the required natural gas at the earliest. Indian Farmers Fertiliser Cooperative Limited (IFFCO), the world’s largest fertiliser cooperative, had proposed to set up an ammonia-urea plant of 726,000 tonne capacity at Nellore during 1992 but could not implement due to nonavailability of natural gas, he said.
