The government is working towards developing India as a gas-based economy by boosting domestic production and enabling the creation of better gas infrastructure. It has set a target of increasing the share of gas in the overall energy mix from the current level of 6 per cent to 15 per cent by 2030. With the relaxing of regulations by the Petroleum and Natural Gas Regulatory Board (PNGRB) and the success of the tenth PNGRB bidding round, 228 geographical areas (GAs) have been brought under the city gas distribution (CGD) network. The network now covers nearly 70 per cent of the country’s population and approximately 53 per cent of its area. With the eleventh bidding round expected to be launched soon, the regulator is working towards opening up more areas for CGD development.
Indian Infrastructure takes a look at the compressed natural gas (CNG)/piped natural gas (PNG) infrastructure, and the operations and expansion plans of key gas distribution companies…
Indraprastha Gas Limited
Indraprastha Gas Limited (IGL) is currently operating in nine GAs – Delhi, Noida, Gautam Buddh Nagar, Ghaziabad, Rewari, Gurugram, Karnal, Shamli and Muzaffarnagar. These GAs were allocated to IGL in the first nine rounds of CGD bidding. In the tenth round, IGL was awarded seven new GAs – Ajmer, Paliand and Rajsamand in Rajasthan; Kanpur, Fatehpur and Hamirpur in Uttar Pradesh; and Kaithal in Haryana. IGL’s current infrastructure comprises nearly 560 CNG stations, 1.6 million domestic connections, 3,000 industrial connections, 4,000 commercial connections, 15,000 km of medium density polyethylene pipe network, and 1,300 steel pipe networks spread across the National Capital Region and parts of Uttar Pradesh, Rajasthan and Haryana.
At present, IGL’s sales volumes stand at 6.44 mmscmd, which is globally among the highest being sold through a CGD network. As of March 31, 2020, the company’s profits
stood at approximately Rs 11.36 billion, 44.47 per cent higher than that in the previous year. In light of the government’s renewed focus on the gas sector, IGL is expanding its CGD network in its existing as well as newly awarded GAs. Work on building new CNG stations, providing domestic connections and laying steel pipe networks is under way in Kanpur, Muzaffarnagar and Kaithal. The minimum work programme (MWP) has already been achieved in Rewari and Karnal.
Meanwhile, IGL is lagging behind in Ajmer due to the outbreak of Covid-19 and the demography of the area. The PNGRB has provided the company an extension, and it is now expected to complete its MWP target by September 2021.
IGL is progressing positively in adopting world-class technological advancements and equipment such as dispensers and compressors. It is also looking to adopt technologies that would minimise the challenges in setting up infrastructure. Depending on the demand in remote areas, IGL will adopt a mobile CNG dispensing unit concept, rather than set up the entire infrastructure to dispense CNG. Despite the heavy investment required for supervisory control and data acquisition and automation, these technologies help to bring down the overall cost of the infrastructure.
Mahanagar Gas Limited
Mahanagar Gas Limited (MGL) is one of the leading PNG distribution companies in India. At present, it operates in three GAs in Mumbai and its surrounding areas – GA 1 is predominantly the Mumbai area, covering Sion, Mulund, Bandra, Tardeo, Chakala, Laxmi, Kandivali, Mira Road and Charkop; GA 2 covers Thane, Mahape, Ambarnath, Taloja and Sampada; and GA 3 covers Panvel, Lonavala and Shrivardhan.
MGL has a network of 417 km of steel pipelines and 4,975 km of polyethylene (PE) pipelines. It has a domestic PNG customer base of more than 1.1 million, 265 operational CNG stations and 62 district regulating stations. As per the latest available information, MGL’s daily gas sales volume stands at 3 mmscmd. It caters to almost 759,000 vehicles and 4,000 industrial and commercial consumers. Besides, all meters installed by MGL in the industrial and commercial segment are smart meters.
The PE pipeline network operated by MGL is at 4-bar pressure and is spread across the city. It is procured in coils so as to minimise the number of joints. The pipeline is laid with a typical 1 metre top cover, with reinforced cement concrete tiles and warning tape. Unlike steel pipelines, PE pipeline jointing is a fairly simple and easy procedure, and does not require much time. Further, the low pressure network is used inside residential premises. In order to ensure the safety of the pipeline network, patrols are conducted twice a day to ensure that there is no leakage of gas. Leak detention surveys are also conducted on a yearly basis, and odorant performance checks are conducted at the network extremities. The company has mapped its entire network with a geographic information system (GIS). With the help of GIS mapping, MGL is able to gauge how many customers will be affected if a particular section of the pipeline is closed for repairs.
As a part of its emergency response strategy, the company has 29 fully equipped emergency vans with an average response time of 30 minutes, available all year round. Further, the company provides a 24×7 toll-free calling facility, and has an emergency control room that handles all PNG/CNG-related complaints, provides SMS-based information to stakeholders, tracks its emergency vans and manages gas supply. MGL has deployed emergency teams in all regions where it operates. Moreover, it has ensured that it has an emergency response plan and a disaster management plan in place, as per PNGRB guidelines.
The Covid-19 outbreak has impacted MGL’s operations severely. At present, only 30 per cent of the workforce is allowed to report to work, which has hampered the functioning of the emergency control room, equipment maintenance, PNG network maintenance, patrolling and other important operations. In order to ensure uninterrupted gas supply and maintain smooth operations, IGL has deputed engineers on a 24×7 basis, procured vehicles for pick-up and drop-off of employees, and obtained permissions for emergency vehicles. Going forward, MGL aims to provide 180,000-200,000 connections every year. However, due to the Covid-19 pandemic and the resultant challenges, including a shortage of labour force, it is unlikely to meet its 2020-21 targets.
Pain points and the road ahead
Despite many favourable regulatory developments, the CGD sector continues to face some inherent issues. One of the key issues is the lack of support from state governments in terms of making land available for setting up infrastructure. Further, there are delays in securing approvals and permissions, which lead to huge time gaps between project planning and execution. The sector needs constructive reforms on both the policy and regulatory fronts. Another issue faced by the sector is high digging restoration and lease charges. Scattered demand in remote areas, lack of utilisation of CNG in public transport and lack of awareness among the public are some other challenges that hamper the holistic growth of the sector.
Going forward, it is imperative that operators discuss their issues with government authorities to resolve them efficiently. There is also an urgent need to ensure local availability of equipment and services. Besides, innovative designs and business models need to be explored and deployed.
Based on presentations by Manjeet Singh, Senior Vice-President, IGL; and Srinivasan Murali, Senior Vice-President, Operations and Maintenance, MGL, at a recent India Infrastructure conference