Fresh guidelines on bidding for city gas distribution networks in 3 months

Gas regulator had cancelled fourth round of bidding for city gas distribution networks in Nov last year on concerns of irrational price bids

Fresh guidelines on bidding for the city gas distribution networks in the country will be putout for public feedback in another three months, said Petroleum and Natural Gas Regulatory Board (PNGRB) chairman S Krishnan on Saturday.

Companies are awaiting fresh guidelines for a year now after the regulator cancelled the fourth round of bidding for city gas distribution(CGD) networks in November last year on concerns of irrational price bids filed by some of them in an attempt to get the CGD regions.

Talking to reporters on the sidelines of a seminar on natural gas here, Krishnan said the guidelines for CGD bidding will be ready in 12 weeks and then the board will issue the final guidelines after inviting opinions from public and other stake holders.

However, the guidelines alone are not going help if the challenges in terms of availability of gas besides achieving a right mix of various sources of gas to make these projects viable, is not addressed in right earnest, he said.

"The challenge is to bring natural gas share in total energy basket to 25% from the present 10% level," he earlier said while addressing the seminar. Natural gas scenario in the country is expected to turn positive in the next 3-4 years once the transnational pipelines and the additional infrastructure to import liquified natural gas(LNG) are set up to meet the demand.

Efforts are also being made to meet short term requirement through floating terminals for LNG supplies, he said.

One such floating terminal with 3.5 million tonne capacity is being set up by the public sector GAIL(India) Limited at Andhra sea coast by December, 2013.

"Gas will be made available at AP shores by this time next year," S Venkatraman, director (Business Development) of GAIL told reporters.

GAIL is going to supply LNG at a market determined price, roughly at around $13- $14 per million British thermal units (MMBTU) to the consumers, according to him.

On whether this price would be viable for power plants to generate power, Venkatraman responded by saying that there are consumers in other sectors who are willing to buy natural gas at this price point.