City Gas Distribution – Ready to change the landscape

CNG, PNG, prices, hiked, Delhi, NCR, NewsMobile, Mobile News, India, Business
CNG, PNG prices hiked in Delhi, NCR

While the country is struggling with increasing petroleum prices and discussions on this are rife, one piece of news went somewhat unnoticed. Government’s regulator PNGRB (Petroleum and Natural Gas Regulatory Board) came up with the mega 9th round of City Gas Distribution licensing round, which promises to make PNG and CNG (for vehicles and household/industries) available in total 174 districts across 22 states and to cover 29% of the population.

Unfortunately oil & gas has been Achilles heel for India; as one of the fastest growing economies in the world, India is forced to import 80% of its Oil & Gas requirement, resulting into a significant burden on the economy.

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Ever since the NDA government came to power in 2014, Oil & Gas has been one of the focus areas. GOI has primarily identified three focus areas to extract best for the country in this domain amidst uncontrollable constraint. First is to come up with more user-friendly revenue sharing modal while giving license for oil exploration. GOI has done this under a new policy HELP (Hydrocarbon Exploration Licensing Policy). HELP has replaced the earlier policy called NELP, which was based on production sharing.

Second is the GOI’s bid to embolden the blending of ethanol/methanol and biofuels in the conventional fossil fuels.

The third initiative is to push the share of natural gas in the energy basket of India. Currently, India is consuming around 55 bcm (billion cubic meter) of natural gas per year, out of which almost half is imported. Out of this 55 bcm, approximately 15-20% is being used as CNG & PNG and remaining gas is being consumed for power generation and as feedstock in urea/other process industries.

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Across the globe, natural gas is spreading its wings in a big way. The latest trend worldwide is that consumption of coal is coming down (due to severe issues in handling and environmental concerns) and use of natural gas is going up.

India still relies heavily on coal. As far as natural gas is concerned, the world average for natural gas share among all sources of energy is 24%, whereas for India it is just 6%.

GOI thus has set a target to increase this 6% to 15% by 2022. GOI’s bid is to increase use of natural gas in vehicles and the households by city gas distribution licensing rounds.

The push for natural gas has real merit attached to it. First and foremost, natural gas is the cleanest of all fossil fuels. Being the lightest among all hydrocarbons, natural gas burns effectively with little HC, CO and sulphur emissions. We have seen that how banning diesel buses and replacing them with natural gas buses has helped to diminish pollution in Delhi. Natural Gas is relatively safer (say than LPG) because being lighter than air, it fizzles quickly in case there is an accidental release.

But the most important is that natural gas is cheaper than other fuels. If all the fossil fuels are converted into the energy (in kcal or MBTU) they contain basis per unit mass calorific value; then natural gas costs almost half in comparison to petrol, diesel and unsubsidized LPG.

The backend infrastructure in this domain well supports the mega natural gas push. There are many LNG import terminal coming up in the country. Apart from that, work on TAPI (Turkmenistan–Afghanistan–Pakistan–India Pipeline) is underway, which alone will have a potential to deliver 14 bcm of gas to India each year.

PNGRB has been mandated by GOI to establish PNG/CNG infrastructure in the country. With this 9th round, total 50% population of the country has been covered. It will result into massive expenditure in the gas infrastructure in the country, which will further provide impetus to the economy and job scenario.

Another merit here is that India still has to import a significant amount of LPG despite having sufficient refining capacity for the other products. Since LPG is making headway in the rural areas due to UJJWALA YOJANA, natural gas is the right alternative to replace LPG in the urban areas to keep LPG consumption in control.

As a burgeoning economy and vast nation, there is almost an insatiable appetite for fossils fuels in India. Natural Gas indeed is the most optimised and viable solution, and it is ready to change the energy landscape in the country.

(The author is NewsMobile iJourno. Views expressed are personal)

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