New Delhi: The petroleum and natural gas regulator will complete by the end of March the bid process for piped gas distribution projects in six cities, which have received as many as 16 initial bids, a top official has said.
“We will open price bids shortly and complete the (bidding) process by March-end,” B.S. Negi, member, Petroleum and Natural Gas Regulatory Board (PNGRB), said. “We are happy with the response.”
The six cities—Meerut, Mathura (both in Uttar Pradesh), Kakinada (Andhra Pradesh), Kota (Rajasthan), Sonepat (Haryana) and Dewas (Madhya Pradesh)— have received bids from companies such as Indian Oil Corp. Ltd (IOC), Bharat Petroleum Corp. Ltd (BPCL), and Reliance Gas Transportation Infrastructure Ltd (RGTIL), among others.
“While the maximum bids totalling five have been received for Sonepat, Mathura has received a single bid from GAIL (India) Ltd’s city gas subsidiary GAIL Gas Ltd,” said a person close to the matter, requesting anonymity.
“Sonepat has received the maximum bids from companies such as IOC, along with Adani Energy, BPCL and Indraprastha Gas Ltd (IGL),” he said. “DSM Infratech, RGTIL and Bhagyanagar Gas Ltd have bid for (city gas distribution in) Kakinada,” he added.
The average cost of each project is Rs400 crore. Bid winners will enjoy 25 years’ exclusivity for developing infrastructure; they will also get marketing exclusivity for three to five years.
On Mathura getting only one bid, PNGRB’s Negi said: “It was an isolated case.”
U.D. Choubey, chairman and managing director, GAIL, had said on Monday that GAIL Gas has bid for all six cities.
The country’s gas utilization policy puts city gas distribution fourth on the priority list, after fertilizer, petrochemical and power projects.
These city gas distribution projects are largely eyeing Reliance Industries Ltd’s (RIL) gas output from its reserves in the Krishna-Godavari basin on the eastern coast of India, that is to start shortly.
RIL’s peak output from the basin is expected to be 80 cu. m of gas. They are also looking at regasified liquefied natural gas as a source.
“It is a good response as not all of them are very attractive cities,” said Anish De, chief executive of Mercados EMI Asia, an energy consulting firm. “An attractive city is the one which has a good mix of CNG (compressed natural gas) and industrial loads along with piped natural gas. The level of response in general is quite reasonable.”