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  • The past year has been an important one for the city gas distribution (CGD) sector. In May 2018, the biggest CGD licensing round offering 86 geographical areas (GAs) in 174 districts was announced. The bidding round received a good response from both domestic and global players. Over 400 bids were received for all the 86 GAs. Recently, on November 22, 2018, the foundation stone was laid for CGD projects in 65 GAs covering 129 districts. Besides, the tenth round of bidding has been launched for 50 GAs in 124 new districts.

  • Another turning point for the sector came with the amendment to the bidding criteria for setting up CGD networks. The amended regulation has addressed most of the sector's concerns. The market exclusivity period has been increased to eight years (as compared to five years earlier), 80 per cent weightage has been given to infrastructure creation (as compared to zero per cent earlier), tariff floors have been set to discourage unviable bids, the additional bid bond requirement has been removed, and penalties have been imposed for under achievement of MWPs.

  • In terms of network, 1,069,263 PNG connections and 244 CNG stations have been added in the past 18 months. CGD operations have commenced in Daman & Diu, Bhubaneswar, Dadra & Nagar Haveli, Kutch (West), Amreli, Dahod, Dahej-Vagra and Jalandhar cities. Meanwhile, authorisations have been granted to 14 new GAs.

  • Increasing importance is being given to deploying advanced IT and OT solutions such as enterprise resource planning, terminal automation systems, smart metering, customer relationship management, supervisory control and data acquisition, geographical information system, satellite surveillance and remote sensors.

  • Meanwhile, the government is exploring new eco-friendly and cost-efficient fuels to expand CGD network coverage. There are plans to set up 5,000 compressed biogas plants at an investment of about Rs 1.75 trillion in the next four to five years. These compressed biogas networks will be integrated with CGD networks to boost supplies to domestic and retail users. Further, Petronet LNG plans to launch around 20 LNG fuel stations on a 4,000 km route running from Delhi to Thiruvananthapuram.

  • Despite the aforementioned developments, an addition of 5.3 million PNG connections in the next two years for achieving the 10 million connections target by 2020 is no small task. The sector is facing several challenges including high execution risks associated with huge capital expenditure, the slow pace of pipeline build-up, low sales and customer penetration, and a high cost of providing last mile connectivity.

  • As the government is doing its bit with the launch of new bidding rounds, and facilitation of policy and regulatory amendments to increase private interest, etc., initiatives have to be taken to build an adequate pipeline network in the north-eastern or eastern states. Further, the state governments should create a more conducive business environment and financiers/lenders should introduce innovative methods of financing.

  • The mission of this conference is to analyse the trends, developments, challenges and opportunities in the CGD sector. The conference will also provide a platform to showcase the best practices and noteworthy projects.
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