Darjeeling marked for city piped gas, CNG.... Bids to be invited in February for 4 areas in Bengal, and 7 in Bihar and Jharkhand

R. Suryamurthy, TT,  New Delhi, 9.11.18, 2:58 : Four geographical areas in Bengal and seven in Bihar and Jharkhand are among the 50 places that would be put up for bidding for piped natural gas and retail CNG in the next round of auction to be held in February.

The Petroleum and Natural Gas Regulatory Board (PNGRB) has offered 50 geographical areas (GA), carved out by clubbing adjoining districts in 12 states, in the 10th round of bidding for city gas licences. Bids are due by February 5, the regulator said.

Darjeeling, Jalpaiguri, Uttar Dinajpur, Howrah, Hoogly, Nadia, North 24 Parganas and South 24 Parganas are the places which would be bid in the next round of auction.

Places in Bihar and Jharkhand that are lined up for bidding are Araria, Purnia, Katihar, Kishanganj, Arwal, Jehanabad, Bhojpur, Buxar, Khagaria, Saharsa, Madhepura, Lakhisarai, Munger, Bhagalpur, Muzafarpur, Vaishali, Saran, Samastipur, Nawada, Kodarma, Deoghar, Sheikhpura and Jamui.

Other states where bids have been called are Andhra Pradesh, Karnataka, Madhya Pradesh, and Uttar Pradesh.

Analysts said: “Since CGD businesses in large cities are more profitable, licences for them are expected to draw greater bidding interest. Bidders are also expected to favour GAs adjacent to existing pipeline networks. Increased participation from public sector oil majors is likely given the government impetus and higher weightage given to the number of new domestic connections in the bidding criteria.”

Bidders have been asked to quote the number of CNG stations to be set up and the number of domestic cooking gas connections to be given in the first eight years of operations. Also, they have to quote the length of pipeline to be laid in the GA and the tariff proposed for city gas and CNG, according to the PNGRB.

Companies having a net worth of not less than Rs 150 crore can bid for GAs with a population of 50 lakh and more while the same for GAs with a population of 20-50 lakh has been proposed at Rs 100 crore.

The net worth eligibility goes down with population, with a Rs 5 crore net worth firm being eligible to bid for GAs that have less than 10 lakh population.

The PNGRB said any entity with security CGD licence would have to enter into a firm natural gas supply agreement with a natural gas producer or marketer in a transparent manner on the principle of ‘arm’s length’ within 180 days of winning a licence. 

PNGRB puts up 50 cities on offer in 10th city gas licensing round

Press Trust of India/New Delhi 08 Nov 18: Oil regulator PNGRB on Thursday put up for bidding 50 cities including Gwalior in Madhya Pradesh, Mysore in Karnataka, Ajmer in Rajasthan and Howrah in West Bengal for grant of licence to retail CNG and piped natural gas.The Petroleum and Natural Gas Regulatory Board (PNGRB) offered 50 geographical areas (GA), carved out by clubbing adjoining districts in 12 states, in the 10th round of bidding for city gas licences.

Bids are due by February 5, according to PNGRB.

Bidders have been asked to quote the number of CNG stations to be set up and the number of domestic cooking gas connections to be given in the first eight years of operation. Also, they have to quote the length of pipeline to be laid in the GA and the tariff proposed for city gas and compressed natural gas (CNG), according to PNGRB.

The bid round comes within months of the close of the 9th round, which was the biggest ever city gas distribution licensing round where 86 permits for selling CNG and piped cooking in 174 districts in 22 states and union territories were offered.

The government is targeting raising share of natural gas in the primary energy basket to 15 per cent from current 6.2 per cent, in the next few years and the bid rounds are aimed at fulfilling that objective.

They are also aimed at meeting Prime Minister Narendra Modi's target of giving piped cooking gas connection to 1 crore households, roughly triple the current size, by 2020.

Cities on offer in the 10th round include Nellore in Andhra Pradesh, Muzaffarpur in Bihar, Kaithal in Haryana, Mysore and Gulbarga in Karnataka, Allapuza and Kollam in Kerala, Ujjain, Gwalior and Morena in Madhya Pradesh, Jhansi and Basti in Uttar Pradesh, Firozpur and Hoshiarpur in Punjab, Ajmer and Jalor in Rajasthan, Nainital in Uttarakhand and Darjeeling and Howrah in West Bengal.

Companies having a net worth of not less than Rs 1.5 billion can bid for GAs with a population of 5 million and more while the same for GAs with a population of 20-50 lakh has been proposed at Rs 1 billion.

The net worth eligibility goes down with population, with a Rs 50 million net worth firm being eligible to bid for GAs that have less than one million population.

PNGRB said any entity with security CGD licence would have to enter into a firm natural gas supply agreement with a natural gas producer or marketer in a transparent manner on the principle of 'at an arm's length' within 180 days of winning a licence.

The authorised entity has to achieve financial closure within 270 days from the date of grant of licence.

The winning company would have 8 years of marketing exclusivity in the given city. Licences given prior to 9th round provide for 5 years of exclusivity.

In the 9th round, which closed in July, billionaire Gautam Adani's group, state-owned Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Torrent Gas were the big winners.

Adani Gas won rights to retail CNG to automobiles and piped cooking gas to households and industries in 13 cities on its own and another nine in a joint venture with IOC.

IOC on its own won rights to seven cities while Bharat Gas Resources Ltd, a unit of state-owned BPCL, won a licence for 11 cities. Torrent Gas made 10 winning bids.

State gas utility GAIL's retailing arm, GAIL Gas, managed rights for five cities.

Prior to the 9th round, 91 GAs were awarded to firms like Indraprastha Gas and GAIL Gas, which are serving 240 million population, 42 lakh domestic consumers and 3.1 million CNG vehicles.

Of these, 56 GAs were awarded through bidding rounds and the rest on government nomination.