Companies

MEIL, Adani Total top winners at 11th CGD auctions

Rishi Ranjan Kala | Updated on: Jan 14, 2022
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PSUs win 23 bids

Hyderabad-based engineering firm Megha Enterprises (MEIL) has won the highest number of bids in the latest round of auctions for city gas distribution (CGD) licenses. Adani Total as well as state-owned Indian Oil Corporation (IOC) and Bharat Petroleum Corporation (BPCL) are the other top winners. Out of the total bids for 61 GAs in the 11th round of CGD auctions, MEIL won 15 GAs followed by 14 GAs secured by Adani Total — the JV firm of Adani Group and French energy major Total. IOC and BPCL won nine GAs and six GAs, respectively, whereas Navi Mumbai-based Dinesh Engineers won bids for four GAs. However, the majority of bids, totaling 23, were won by central and state public sector undertakings (PSUs). Besides IOC and BPCL, state government PSU Assam Gas secured 3 GAs, followed by Maharashtra Natural Gas (2 GAs). That apart, central PSUs Hindustan Petroleum Corporation (HPCL), GAIL, and Indraprastha Gas (IGL) also secured bids for one GAs each. The successful bidders will have to construct city gate stations or mother stations, lay the main pipeline and distribution pipelines, and install CNG stations, read the statement by MEIL, which placed bids for 43 GAs. Previously, the global engineering firm had won 3 GAs (Karnataka, Andhra Pradesh and Telangana) in the 10th round of bidding for CGD. Around 32 CNG stations have already become operational in the three states under the brand, Megha Gas, it added. Through building the CGD network, the government aims to promote natural gas such as Piped Natural Gas (PNG) for households and industries (for domestic or industrial consumption) as well as Compressed Natural Gas (CNG) used as fuel for vehicles and the automobile industry.  Last month, the Petroleum and Natural Gas Regulatory Board (PNGRB) said it has received more than 430 bids in the 11th round of bidding for setting up CGD in 61 GAs. Four GAs did not receive any bids. The oil sector regulator expects the exercise to bring an investment of more than ₹80,000 crore and generate employment. PNGRB had launched the 11th CGD bidding round in September 2021 for 65 GAs spread across 215 districts (212 complete and 3 part) in 19 states and one union territory covering 26% of India’s population and 33% of its area. In the 10th CGD bidding round in November 2018, around 50 GAs were authorised for the development of the CGD network. While in the ninth round of CGD bidding (May 2018), PNGRB offered 86 GAs covering 174 districts (156 complete and 18 part) spread over 22 states and union territories. At present, there are 228 GAs authorised by the regulator across 27 states and union territories covering around 53% of the country’s geographical area and 70 per cent of its population. In the past, the regulator has conducted 8 rounds of bidding for developing CGD infrastructure resulting in the award of 56 GAs, including 29GAs, which were initiated before PNGRB and 6 government-mandated GAs. As of November 2021, India had a total of 83.70 lakh PNG connections and 3,532 CNG stations on a provisional basis. 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. The CNG segment accounts for around 40 per cent of consumption in city gas distribution.

Published on January 14, 2022

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