Tamil Nadu has announced City Gas Distribution (CGD) Policy 2023 to promote the adoption of natural gas by the State as a green and clean fuel.

The policy will also ensure faster implementation of CGD infrastructure in the State, ensuring compliance with safe operations and reliable/uninterrupted supply of natural gas by maintaining their asset integrity by all the CGD entities.

The policy will also facilitate permissions/clearances/charges, standardised and uniform in a time-bound manner for all the CGD entities by providing a policy framework on the necessary support mechanism. It will also develop applicable rules/regulations to encourage the use of natural gas for industrial/commercial, transport, and household purposes in a phased manner.

Guidelines for encouraging CNG/LNG as a preferred transport fuel, LNG bunkering in fishing vessels and Inland waterways; conversion of diesel generators in telecom service towers with gas generators, and taxation and finance-related aspects will be issued by the State government from time to time, upon the readiness of CGD entities in establishing the CGD networks across the State, and ensuring uninterrupted supply of natural gas to all the customers, the policy says.

Critical requirement

In Tamil Nadu, the CGD is presently under implementation in seven Geographical Areas (GAs) covering 15 districts (up to 9th and 10th bidding by PNGRB). In the 11th bidding, another 23 districts were authorised, covering all 38 districts of the State.

Nearly 2.28 crore PNG (Domestic) connections and around 2,785 CNG stations will be developed, as per the commitment by various CGD entities. It has an overall investment potential of around ₹35,000 crore and an initial employment generation capacity of around 20,000 people, both under direct and indirect categories, due to the expansion of CGD infrastructure. Further, value-added services have an investment potential of ₹500 crore in the natural gas value chain.

There is a critical requirement to facilitate the development of CGD infrastructure in various States. In general, timely permission from various departments, but not limited to land-owning agency/Civil agency/Municipal Corporation, District Magistrate (regarding no objection certificate for setting up CNG stations), and fire department, are required in the execution, the policy says.