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City-based Jay Madhok Energy Pvt Ltd has outbid state-owned GAIL Gas, Oil and Natural Gas Corp (ONGC), Hindustan Petroleum (HPCL), Indian Oil-Adani combine and Bharat Petroleum (BPCL) to win the rights to sell CNG and piped gas in Jalandhar.
The Petroleum and Natural Gas Regulatory Board (PNGRB) last month issued authorisation letter to Jay Madhok Energy to sell compressed natural gas (CNG) to automobiles and piped cooking gas to households in Jalandhar for 25 years.
PNGRB said the company will have to comply with its rules governing city gas distribution.
In all, 26 companies submitted 51 bids for the seven cities offered in the third round of auction of city gas distribution licences in July 2010 – Asansol-Durgapur in West Bengal, Bhavnagar, Kutch-East, Kutch-West and Jamnagar in Gujarat, and Ludhiana and Jalandhar in Punjab.
Jalandhar attracted the second-highest bids, with 12 firms in the fray, including Hindustan Petroleum (HPCL), GAIL Gas, Indraprastha Gas, Indian Oil-Adani Gas, GSPC Gas, BPCL-ONGC-OIL, Lanco Infratech, HCC Infrastructure and Jay Madhok Energy.
PNGRB said it opened price bids last month and awarded rights for Jalandhar to Jay Madhok.
Jay Madhok Energy is considered the favourite to win Kutch-East and Ludhiana, the city that received the most bids, with offers from 16 companies. Licences for these and other cities are yet to be decided by the regulator.
PNGRB, in its September 6 order to Jay Madhok Energy, said the company has to start laying the gas distribution network “within a period of 180 days from the date of this authorisation.”
The network will cover an area of 338 square kilometres in Jalandhar and the company is likely to begin selling gas there within a year, with sales estimated to reach 2.5 million standard cubic meters per day in five years.
Jay Madhok Energy has already tied up for gas supplies.
The PNGRB said the firm will add 46,800 customers every year in the first four years.
In response to the auction, Kutch-East received eight bids, Asansol-Durgapur received seven, while Kutch-West and Jamnagar district received four and two bids, respectively.
Bids were made on four aspects – network rate, inch kilometres of steel pipelines, number of domestic connections in the first five years and compression charges from six to 25 years.
Network rate had the highest score of 40 while the number of domestic connections was given a weightage of 30.
Compression charges and inch kilometres of steel pipelines carried weightages of 10 and 20, respectively.
The PNGRB has planned a phased roll-out of the city gas distribution network, covering more than 300 cities and towns across various states.
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