City gas network gets EoI from just Reliance

Reliance Industries is the only company that has submitted expression of interest (EoI) for the proposed city gas distribution or CGD networks in Tamil Nadu, Petroleum and Natural Gas Regulatory Board (PNGRB) chairman L Mansingh said.

“We expect more players to enter the fray once we start the bidding process,” he added.

PNGRB has identified six cities in the state including Chennai, Coimbatore, Salem, Tiruchy and Tuticorin to start with. The proposed investment would be Rs 400-800 crore.

For a city like Chennai, it would be around Rs 600 crore. To lay an 18 inch pipe for a km, the cost would be between Rs 3.5 crore and Rs 4 crore.

Mansingh said this would be the right time for Tamil Nadu to think about the pipeline project as the resources in KG and Cauveri basins were high.

“These projects will change the current scenario like shortage of fuel and LPG significantly,” he said, adding that proper infrastructure and government support should be in place including the single window clearance system for the investors.

Representatives of PNGRB are planning to meet the state chief secretary to discuss the legal aspects.

Mansingh said the regulator had already approached other state governments, of which Andhra Pradesh and Gujarat responded positively for the single window clearance mechanism. It expects the same from the Tamil Nadu government.

Speaking about the country as a whole, he said in the first phase, six states of Andhra Pradesh, Tamil Nadu, Gujarat, Maharashtra, Uttar Pradesh and Haryana will have CGD networks.

So far, PNGRB has received 73 EoIs from global and domestic players including Reliance Industries Ltd, GAIL, Gujarat Gas, GSPL, Adani Group and the existing CGD players, which were permitted by the government before the regulator was formed.

The regulator is conducting roadshows across the country to encourage more players to enter the segment. Companies, which are taking up the projects, will get infrastructure rights for 25 years and marketing rights for 5 years, said Mansingh.