Adani Gas To Invest Rs 9,000 Crore On Distribution Networks Over Next 10 Years
A pressure gauge sits on pipework. (Photographer: Qilai Shen/Bloomberg)

Adani Gas To Invest Rs 9,000 Crore On Distribution Networks Over Next 10 Years


Adani Gas Ltd. will invest up to Rs 9,000 crore in setting up city gas distribution network over the next 10 years to retail compressed natural gas to automobiles and piped cooking gas to households in those areas where it won licences in the recent bidding round, its Chief Executive Officer Suresh Manglani said.

Adani Gas on its own and in a joint venture with state-owned Indian Oil Corporation has won city gas licence for 38 geographical areas spread over 71 districts in 15 states in recent bid rounds.

"AGL is moving at breakneck speed in order to achieve the commitments made in these bidding rounds and the investment in these projects is pegged at around Rs 8,000 to Rs 9,000 crore in the coming decade," he said.

As part of the government vision to raise the share of natural gas in the energy mix to 15 percent by 2030 from current 6.2 percent, the oil regulator Petroleum and Natural Gas Regulatory Board has in last couple of years conducted two licensing rounds that have expanded the coverage of city gas network to over 400 districts covering 70 percent of the population of the country.

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Entities winning city gas licences have committed to supply piped natural gas to about 5 crore homes and set up 10,000 CNG dispensing stations.

"Just to set the context, since Independence only 57 lakh homes have been provided with piped natural gas and only 1,900 CNG stations have so far been set up across India," he said.

He, however, rued the "cumbersome and time consuming" process of obtaining permission for laying pipelines or setting up CNG stations.

"While the authorisations for development of city gas distribution networks are granted by centre or regulator, the actual work of project execution has to be carried out in the states and union territories," he said. "The process of grant of permissions/right of the user by the various centre and state authorities has remained extremely cumbersome and time-consuming. This would be one of the key bottlenecks in ensuring that the mammoth target sets are achieved."

He said while a push is being made towards a gas-based economy with open access and gas exchange being planned, key issues such as the inclusion of natural gas in the Goods and Services Tax regime and ban on polluting fuels remain critical.

"Going forward with more clarity emerging on these fronts, the CGD sector is expected to grow exponentially with the simultaneous development of last-mile connectivity of gas as well as infrastructure creation," he said.

At the end of September 2019, Adani Gas had six city gas projects operational with 86 CNG stations and 0.41 million residential customers. It supplied 1.55 million standard cubic meters per day of gas through these.

The company plans to scale up the CNG outlets to 1,550 by 2027 and connect 6 million households with piped natural gas, he added.

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