GAIL is the pioneer of city gas distribution in India. GAIL took many initiatives to introduce PNG for households and CNG for the transport sector to address the rising pollution levels. Pilot projects were launched in early 1990s in two metros Delhi and Mumbai through joint venture companies Indraprastha Gas Limited (IGL) and Mahanagar Gas Limited (MGL) leading to the start of commercial operation of city gas projects. The results of these ventures are quite visible through the improvement in air quality in these cities.
Based on the success of IGL and MGL, GAIL has further set up six more JVCs viz Bhagyanagar Gas Limited, Andhra Pradesh; Avantika Gas Limited in Madhya Pradesh; Central U P Gas Limited & Green Gas Limited in Uttar Pradesh; Maharashtra Natural Gas Limited in Pune Maharashtra and Tripura Natural Gas Company Limited in Tripura for CGD projects in various cities.
However, Ministry of Petroleum & Natural Gas established the Petroleum and Natural Gas Regulatory Board (PNGRB) with effect from 01.10.2007, under the Petroleum and Natural Gas Regulatory Board Act 2006, to regulate the refining, processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum products and natural gas excluding production of crude oil and natural gas. The Petroleum & Natural Gas Regulatory Board Act-2006 provides the legal framework for the development of the natural gas pipelines and city or local gas distribution networks. With the arrival of the PNGRB the implementation of PNG in various cities is being taken up in a phased manner as and when the bids are called for by the Regulator.
In the future as and when the bids are called for the CGD network development by the PNGRB, interested entities may submit the bids and whoever is successful in the bidding will be authorized to develop the CGD network consisting of CNG & PNG infrastructure in that particular city. This has induced other entities to come into CGD projects and thus a competitive era in this field has been initiated.
In this competitive environment, a sincere and dedicated approach, energy and focus have been taken to maintain GAIL's leading position in CGD projects. This has necessitated the requirement of a new establishment of GAIL dedicated to CGD projects. Accordingly, for implementation of the city gas distribution projects smoothly, a wholly owned subsidiary of GAIL (India) Limited, GAIL Gas Limited, was incorporated on May 27, 2008 as a limited company under the Companies Act.
GAIL Gas Limited has been authorized by PNGRB and MoPNG for implementing City Gas Distribution Projects in Dewas (Madhya Pradesh), Kota (Rajasthan), Sonepat (Haryana), Meerut (Uttar Pradesh), Firozabad (Uttar Pradesh) and Vadodara (Gujarat).
As per the business plan, GAIL Gas would be expanding the CGD business in dedicated and aggressive manner and will facilitate re-investing returns from operational CGD projects into new projects thus reducing the need for fresh equity infusions by GAIL.
As per the estimate more than 200 cities have been identified for the development of CGD projects in a phased manner in synchronization with the commissioning of the pipeline. The details of these cities have already been forwarded to MoPNG by GAIL with a request for authorization for setting up of CGD network in these cities.
Gas supplied by GAIL to retail gas distributors serves more than 6,00,000 automobiles as Compressed Natural Gas (CNG) and over 6,50,000 households as Piped Natural Gas (PNG). Various cities are covered in the network.
PNG Network
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GAIL's City Gas Distribution initiatives are not confined to India. It has established its presence in the CNG and City Gas arenas in Egypt through equity participation in Fayum Gas, Shell CNG and Natgas; and has acquired a stake in China Gas Holding to pursue CNG opportunities in mainland China. GAIL plans to develop City Gas markets worldwide in collaboration with global oil and gas majors.
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