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While calling for investments in the ninth round of bidding for the City Gas Distribution (CGD) network, the sector regulator PNGRB underlined the emerging opportunities in the LNG fuelled commercial transport and stated that it is preparing safety regulations for these vehicles.
Dinesh K Sarraf, Chairperson, Petroleum and Natural Gas Regulatory Board (PNGRB), said: “This is a very big opportunity for CGD companies. At their own stations, they can have LNG dispensing facilities for trucks. We have seen such trucks ply in China in large numbers. This will create a different segment to be catered in the CGD space. The players will be given gas from the pipeline and the LPG for truck fuel will be exclusive to them. They are actually saving a lot of cost when they use LNG for trucks.”
“The major challenge in making this a success is the LNG vehicles and their safety regulations. These vehicles will require separate safety regulations. Within this year itself, we will announce safety regulations for LNG vehicles,” said Sarraf on the sidelines of a road show for the 9th CGD bidding round held in Gandhinagar on Wednesday.
There is a good opportunity for original equipment makers in the commercial vehicle segment, who can design and work on the LNG fuelled engines.
The commissioning of the new network under the 9th round will be undertaken post the general elections in 2019. “The real infrastructure work would start post election. By April 2020, the actual supply would start,” he added.
Supply concerns
Commenting on the concerns of gas supply and the projected demand post the commissioning of the network under 9th round, Sarraf said that the domestic gas production is inadequate to meet the demand of all the sectors. But CGD for domestic and Compressed Natural Gas (CNG) has been accorded top priority in the allocation of the domestic gas.
“Others would need to either depend on imported gas or the domestic gas where the prices are not regulated. The commercial and industrial will be dependent on imported gas. The domestic and CNG will get the domestic gas,” he said, adding that to meet the growing demand for imported LNG, the country is adding 33.8 million tonnes of LNG import terminal capacities to the existing capacity of 26.7 million tonnes.
About 60.5 million tonnes per annum of capacities will be commissioned by 2025 in a phased manner. Similarly, the projected demand for gas for CGD sector will increase from about 20 mmscmd to about 100 mmscmd by 2025 as a result of increased penetration and expansion of the geographies.
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