The city gas distribution (CGD) sector has been impacted greatly due to the Covid-19 pandemic as various restrictions led to a sharp decline in the volumes of CGD entities. However, with the gradual ease in restrictions all CGD entities are recovering and operating at almost pre-Covid levels now. Further, domestic demand for natural gas is expected to grow by approximately 10 per cent Year-on-Year in financial year (FY) 2022. The increase in domestic demand offers a great opportunity to CGD entities to further expand their network and complete infrastructure development activities in their geographical areas.
At the recent ISUW 2021 conference, Tarun Kapoor, Secretary, Ministry of Petroleum and Natural Gas (MoPNG) shared his views about the growth of CGD sector in India, the progress of infrastructure development, various government reforms and the future plans to cater the rising demand. Excerpts…
Progress so far
The CGD sector in India is currently working towards developing infrastructure and streamlining rules and regulation to ensure that the services reach the consumers in an efficient manner. Currently, 7.5 million households in the country have been provided with a piped natural gas (PNG) connection, whereas, the number of households using liquefied petroleum gas stands at around 290 million. Hence, there is a great scope for growth of the CGD sector in the domestic PNG segment.
The industrial segment is also expected to eventually shift to natural gas due to various reasons such as environmental concerns, cost economics etc. In Delhi, all industrial units have already shifted to natural gas and similar course of action is expected in other urban cities. Further, the commercial segment also offers a lucrative market to the CGD sector as it is expected to gradually shift towards natural gas.
On the infrastructure development front, the sector is working extensively towards getting the trunk network in place to connect the entire country. Currently, around 18,500 km of trunk pipeline has been completed as against the target of 34,000 km. The remaining network is expected to be completed in the next 2-3 years as every month certain portion of the pipeline is getting commissioned and the work is progressing in full swing.
The distribution process is also progressing at a healthy pace as 53 per cent of the country’s geographical area has already been tendered out. The CGD entities are working to develop their authorised geographical areas and in the next few years all urban areas of the country are expected to be connected to the CGD network. Meanwhile, the rural areas of the country will also come under the ambit of CGD network in the next decade or so.
With the laying of a piped network, a lot of opportunities open up because gas produced from various sources can also be injected back into the network. MoPNG is constantly thinking of innovative methods to inject compressed bio-gas into the network. Along with this, it is also looking into alternatives such as hydrogen blending. It is expected that this can be achieved easily without any major changes in the infrastructure. The ministry is also planning on gradually utilising many other domestically produced alternatives which can be blended into the same gas network. Just like in solar powered systems, wherein people can produce their own electricity and put it back into the grid, in future, people will be able to produce their own gas from various sources (such as kitchen waste), use it and put it back into the network if there is a surplus. In order to integrate all the producers and consumers of gas seamlessly, it is imperative to bring smart metering into practice.
MoPNG is steadily progressing on the policy front by enabling regulations through PNGRB, such as working of the gas exchange and unification of tariffs. The government is also expected to come up with a transport system operator soon. This will ensure that the transportation of gas is not monopolised and the consumers are benefited. The sector is likely to witness more policy changes so as to facilitate injection of compressed biogas into the network and reforms for pricing to enable more domestic gas production. In a bid to ensure this, the government has given marketing and pricing freedom to domestic gas producers (expect for Oil and Natural Gas Corporation and Oil India Limited) thereby enabling the country in moving towards an open gas market.
It is expected that in the future all households, commercial and industrial establishments will be connected with PNG which will be reasonably priced. Natural gas is a much safer and environment friendly alternative to liquid petroleum gas. All stakeholders have to work in coordination with the government to maximise the infrastructure of gas network and help India reach its 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. Further, making the entire system smart would add value to the gas network.
Mr Tarun Kapoor is Secretary to the Government of India in the MoPNG. He is a member of the Indian Administrative service with over 33 years’ experience at the state and national level. Before taking over as Secretary, MoPNG, Mr Tarun Kapoor was posted as Vice Chairman, DDA. He has worked as Additional Chief Secretary in Government of Himachal Pradesh looking after various departments from time to time like Power, Environment and Forests, Food and Civil Supplies, Excise, PWD etc. He has also worked as Joint Secretary in the Ministry of New and Renewable Energy looking after National Solar Mission for five years. He also worked in Satluj Jal Vidyut Nigam Ltd, a CPSE in the area of hydro power.