Power | Oil & Gas | Telecom | Roads & Bridges | Aviation | Ports & Shipping | Railways | Water | Finance
      home |  about us | careers | contact us

  • The prospects of the city gas distribution (CGD) sector have improved in the past couple of years. Fresh licences have been issued at a much faster pace. Gas availability has increased due to the priority being given to the compressed natural gas (CNG) and piped natural gas (PNG) segments. This has enabled companies to cut prices and regain competitiveness. In addition, permitting asset-owning CGD companies to freely price their products has removed uncertainties in pricing.

  • In terms of network, PNG connections have grown at a compound annual growth rate of 17 per cent, while CNG stations have grown by about 10 per cent in the past five years. Total sales in 2015-16 were close to 15 mmscmd.

  • However, for the sector to maintain this momentum, a number of issues need to be dealt with. Better prospects have led to increased interest due to which aggressive bidding has been witnessed in recent rounds. This poses a long-term risk for CGD entities, given the tough Minimum Work Programme and service standards set by the Petroleum and Natural Gas Regulatory Board (PNGRB).

  • CGD players face many challenges. Projects are exposed to high execution risks associated with huge capital expenditure and the slow pace of pipeline build-up. Besides, low sales and customer penetration, and high cost of providing last mile connectivity adversely affect project viability. Many of the geographical areas (GAs) in the 7th and 8th bidding rounds have not received any bids due to these reasons.

  • The government recognises these challenges and is taking measures to address these. PNGRB has formed a committee that has finalised its recommendations for alternative bidding models for the CGD network. Some of the key suggestions are increasing the exclusivity period for operating pipelines to 10 years and increasing the minimum net worth criteria..

  • Other challenges that require urgent attention include delays in obtaining clearances, high restoration charges by local authorities, asset management, pipeline network safety, leakage detection and metering.

  • Going forward, there is significant opportunity for all stakeholders in the sector. PNGRB has identified 223 GAs for future bidding depending on the gas connectivity spread and demand scenario in the areas. There is also a huge opportunity for technology players as most of the CGD operators are testing world-class technologies and best practices to ensure effective operations

  • 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 new technologies, best practices and noteworthy projects.
magazines | newsletters | research | conferences                                  terms & conditions | privacy policy | refund policy
© copyright 2006 India Infrastructure.com, All rights reserved.