Adani, IOC, HPCL, BPCL in fray for city gas licence; govt gets 400 bids

Latest round to bring investment of about Rs 700 billion

Around 400 bids have come for 86 geographical areas on offer under the ongoing round, the ninth one, for city gas licensing. 

Tuesday was the final date for these. The technical bids would be opened between Thursday and the week after.

Adani Gas, part of Adani Group, has bid for a little more than 50 areas. The three government-owned oil marketing companies — Indian Oil Corporation (IOC), Bharat Petroleum Corporation and Hindustan Petroleum Corporation — have also bid aggressively for a majority of the blocks. 

Adani has reportedly bid jointly with IOC in some areas, through an exiting joint venture.

Other state-owned companies in the fray are GAIL Gas, Indraprastha Gas and Mahanagar Gas. Other major private companies in the race include Subhash Chandra’s Essel Group, the Sudhir Mehta-led Torrent Group, Haryana City Gas, Cadilla Group company IRM Energy, Sanwariya Gas and Hiranandani Group.
 

The Petroleum and Natural Gas Regulatory Board (PNGRB) said the current round of bids, once awarded, would bring investment of about Rs 700 billion and “play a significant role in achieving the shift towards a gas-based economy, with natural gas as the next-generation, cheaper and environment friendly fossil fuel”. 

PNGRB had launched this ninth City Gas Distribution Bidding Round on April 12. The 86 geographical areas on offer cover 174 districts (156 completely and 18 partly) in 22 states and Union Territories. This is expected to cover an additional 24 per cent of India’s area and 29 per cent of its population. “A lot of new players are expected to participate in the current rounds. With widespread expansion, the sector will open up for new vendors and contractors. Since it covers 176 geographical areas, during the initial years companies might face some supply chain issues due to lack of proper infrastructure,” said Rahul Chopra, managing director of Haryana City Gas, refusing to confirm whether his company is participating. 

The government is planning to finalise the successful entities by October, after technical and financial evaluation of the bids. PNGRB said it was trying to expedite the process.

Earlier, it had 16 roadshows in major Indian cities and in Dubai, during May-June. It has specified a floor rate of Rs 30 per million British thermal units for city gas and Rs 2 per kg for CNG.