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Annual CGD Conclave 2023

Introduction

Since its inception more than one-and-a-half decade back, the midstream and downstream oil & gas regulator PNGRB, has ensured amongst its many mandates, the rapid and effective spread of the CGD network in India. More than 5,700 CNG stations, domestic PNG connections exceeding 11 million, 38,000 Commercial CNG connections, and almost 17,000 Industrial PNG connections: these are the statistics that define the massive growth across all the segments of the fast-growing City Gas Distribution (CGD) sector in India. After the completion of XIth round for CGD bidding, almost 98% of the country’s population, across 630 districts, covering almost 90% of total geographic area of India, has been placed on the CGD network; cutting across 295 Geographic Areas (GAs). Already several Tier-III cities have been successfully placed on the CGD map of India as well. CGD sector now accounts for more than one-fifth of total natural gas consumption in India. As India aims at increasing the share of natural gas in the energy basket to 15% by 2030, from the current level of 6%, there is a huge market to be tapped in the CGD sector.

Imported gas in the form of LNG now accounts for almost 50% of gas consumption in India. Gas importing companies are now seeking a deviation from reliance on spot LNG markets. Pursuits for long-term contracts for LNG imports will create the much-needed room for lesser price volatilities for the end-consumers. Coupled with the capital investments in trunk pipelines, the CGD sector is firmly placed for massive growth in the coming years ahead. The North-East region in India remains an untapped market for CGD operations and will be pick-up with the expanding network of cross-country pipelines across Eastern and North-Eastern parts of India.

As the CGD market expands, digitalization initiatives are expected to pick-up fast as well. There will be a huge market for data capture and analysis; to initiate predictive maintenance, technical support, leading to better business decisions and sustain a robust CGD infrastructure. Applications for data capture, IoT, AI, ML; along with related software and hardware applications, will attract a lot of attention and investments from niche equipment manufacturers, as the CGD sector grows from here on. Successful data-based models will emerge with the bottom-line approach on how to serve the end-consumers better.

The CGD sector will also see a great demand build-up for consumption of Green Hydrogen. A successful case here is the implementation of Green Hydrogen blending in the PNG network in Kawas, Gujarat, by NTPC in association with Gujarat Gas. A 5% volume-to-volume blending of Green Hydrogen with PNG is a laudable step to start with. H-CNG buses will also pave the way for consumption of Green Hydrogen within the CNG network. There is also a tremendous untapped scope for a lot of small scale CGD applications such as gas based gensets, gas-based water heaters and space heating. It is understood that natural gas has the potential for replacing LPG and electricity within the CGD sector.

Natural Gas storage has now once again been seen as a possible solution to circumvent the challenges faced due to possible geo-political disturbances. This subject would need greater participation, technical and geological studies, investments and thought process from the concerned stakeholders; be it the pipeline operators, gas fields operators, regulators, and the Government alike.

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