The gas pipeline infrastructure in the country has witnessed significant developments over the years, backed by various initiatives in the sector. The gas grid has consequentially undergone prominent network expansion, leading to enhanced transportation of natural gas from the source to consumers across various regions of the country. The natural gas pipeline network in India has increased from around 14,000 km in 2018 to over 24,000 km as of August 2024. Further, during April-August 2024, the total natural gas consumption stood at 30 billion cubic metres.
Current scenario and coverage
Burning of natural gas is considered to be relatively cleaner than coal and petroleum products, leading to lesser emissions. This, in addition to various other motivating factors, has driven efforts to increase the share of natural gas in the primary energy mix. In line with this, the “One Nation One Gas Grid” initiative has seen an increased focus over the years.
The Petroleum and Natural Gas Regulatory Board (PNGRB) provides authority to entities for the development of a city gas distribution (CGD) network in a specified geographical area (GA). Under this, compressed natural gas is used mainly as an auto fuel and piped natural gas (PNG) is used for the domestic, commercial and industrial segments.
The CGD network coverage in 2014 stood at 66 districts, with the number of PNG connections at 2.54 million. Further, there were only 57 GAs authorised for the development of CGD network in the country till 2014. Notable progress has been witnessed over the years with the coverage rising to 630 districts in 2023, and the total domestic PNG connections rising to around 10.39 million.
In March 2024, the 12th CGD bidding round witnessed the offering of eight GAs covering six North-eastern states – Arunachal Pradesh, Meghalaya, Manipur, Nagaland, Sikkim and Mizoram–and two union territories – Jammu & Kashmir and Ladakh. A total of 103 districts were covered in this round.
Now with the completion of all 12 rounds of the CGD bidding, 307 GAs have been authorised for the development of CGD networks. This covers almost 100 per cent of the country’s total geographical area and is spread across 733 districts in 34 states and union territories.
Further, as per the PNGRB, 33,475 km of natural gas pipelines have been authorised as of June 2024. This includes 24,921 km of operational natural gas pipelines and 10,789 km under construction.
Recent developments
One of the most notable ongoing projects in the sector is the Pradhan Mantri Urja Ganga pipeline. The project entails an investment of around Rs 129.4 billion and spans 3,306 km, extending through Jagdishpur-Haldia-Bokaro-Dhamra. The project aims for the provision of environment-friendly gas to areas that are untouched so far and to bring the benefit of lower natural gas prices to these areas. A major part of the pipeline has already witnessed completion. However, as of June 2024, the project was reportedly stuck due to delays in right-of-use (RoU) availability and is now likely to be completed by March 2025.
Another project for the main trunk GAIL gas transportation pipeline at Kolkata is soon to be completed. This follows the resolution of an 800 metre hurdle. Additionally, Oil and Natural Gas Corporation Limited reportedly has plans for setting up mini LNG plants. These are aimed towards the evacuation of natural gas from wells that are located in areas not connected with pipelines. Five sites for the same have been identified in Andhra Pradesh, Jharkhand and Gujarat. These mini plants would convert underground gas pumped into LNG by supercooling it to -160 degrees Celsius. The LNG would then be transported to the nearest pipeline through cryogenic trucks.
The sector, as a whole, is also seeing a move towards sustainability. The government has launched a study to evaluate the cost-effectiveness of transporting green hydrogen from renewable energy zones to ports via pipelines. Further, as of March 2024, the PNGRB was also evaluating the feasibility of transporting hydrogen via the existing natural gas pipelines through blending. In line with this trend, Adani Total Gas Limited recently commenced blending around 2.2-2.3 per cent of green hydrogen in PNG supplies in Shantigram, Ahmedabad.
Integrating technologies
Gas pipeline infrastructure has also transformed with the integration of digital technologies for operations, and for the management of the entire pipeline stretch. Geographic information systems (GIS) have played a major role in the management of assets in the gas pipeline network. ESRI, for example, provides GIS solutions for CGD networks. With these solutions, up-to-date asset performance and maintenance history can be obtained. Resource allocation can be maximised, and costs can be decreased. Further, it is cloud-enabled, implying that workflows can be accessed securely any time and on any device. Various technologies and digital solutions have also been devised for gas leak detection and prevention.
Challenges
Transportation of energy through pipelines has been widely adopted due to its environment friendly nature, economics, reliability and energy efficiency, among other benefits. The sector is, however, faced by some challenges. Regulatory requirements and hurdles in the right-of-way acquisition are time consuming, and also lead to delays in projects. Further, laying pipelines also poses difficulty in terrains such as forests and defence lands in terms of approvals and permissions. Challenges also arise from the fact that the CGD network does not necessarily translate to access to PNG.
Another challenge is the existence of monopolies in the sector. Energy infrastructure in mature markets usually follows the common carrier principle and gas pipelines can be accessed by any user or supplier, irrespective of ownership. Such a scenario is, however, not present in India, where there are various access-related issues. In an effort to address these, a committee has been formed to provide recommendations on the splitting of entities that are engaged in both the transportation and marketing of natural gas, and for ending monopolies of city gas retailers, where it is required. Further, as per the PNGRB, it is essential to declare GAs as common carriers or contract carriers in order to ensure fair competition and efficiency in CGD.
Outlook
There are plans for an investment of $67 billion over the next six years in the natural gas sector, for the provision of natural gas to consumers at a stable price. With recent measures adopted, natural gas consumption is expected to grow three fold to 500 million metric standard cubic metres per day by 2030. The government also targets to increase the share of natural gas in the energy mix to 15 per cent in 2030, which stood at 6.2 per cent as of March 2024. Investments are also expected in the Northeastern states and northern territories of Kashmir, and by 2025, CGD is expected to cover the entire Northeast.
The gas grid, almost entirely available across the country, is likely to witness further expansion backed by these plans and targets. Efforts are also under way for effective monitoring and management of assets relating to the CGD network through the use of technology. Looking ahead, overcoming key challenges and ensuring availability through the existing pipeline infrastructure will shape the sector in the coming years. w