India has embarked on a massive expansion of City Gas Distribution (CGD) to develop large-scale nation-wide infrastructure for making Piped Natural Gas (PNG) available to domestic, commercial, industrial consumers, CNG vehicle owners and automobile manufacturers.
The Petroleum and Natural Gas Regulatory Board (PNGRB) is mandated to authorize entities to lay, build, operate or expand city or local natural gas distribution network (CGD Network) for which it calls for the competitive bids from entities for laying, building, operating or expansion of CGD networks. The authorization to the entity gives the physical exclusivity to lay, build, operate and expand CGD Network which includes CNG & PNG for period of 25 years.
CGD Network project envisages marketing of Piped Natural Gas (PNG) to various customers in domestic, commercial & industrial segments and Compressed Natural Gas (CNG) to the automotive segment. As of December 31, 2021, Petroleum & Natural Gas Regulatory Board (PNGRB) has authorized about 33,768 km length of natural gas pipeline network across the country. Out of this, 20,334 km length of natural gas pipelines, including spur lines, are operational and a total of 15,194 km length of pipelines is under various stages of construction.
Petroleum and Natural Gas Regulatory Board (PNGRB) organizes CGD bidding rounds, in which Public Sector Units (PSUs), joint venture (JV) entities as well as private companies participate to bid for City Gas Distribution rights for Geographical Areas offered under specific bidding rounds. The government provides cheap domestic gas to the CGD segment under the administered price mechanism (APM) for domestic PNG and CNG categories. However, liquefied natural gas (LNG) is imported to meet industrial and commercial PNG demand.
Bharat Petroleum participates in CGD bidding rounds through its wholly-owned subsidiary Bharat Gas Resources Limited (BGRL) and in association with JV companies.