Areas marked for city piped gas, CNG

Bids to be invited in February for 4 areas in Bengal, and 7 in Bihar and Jharkhand

By R. Suryamurthy in New Delhi
  • Published 9.11.18, 2:58 AM
  • Updated 9.11.18, 10:18 AM
  • 2 mins read
Natural Gas pipeline. (Shutterstock)

Four geographical areas in Bengal and seven in Bihar and Jharkhand are among the 50 places that would be put up for bidding for piped natural gas and retail CNG in the next round of auction to be held in February.

The Petroleum and Natural Gas Regulatory Board (PNGRB) has offered 50 geographical areas (GA), carved out by clubbing adjoining districts in 12 states, in the 10th round of bidding for city gas licences. Bids are due by February 5, the regulator said.

Darjeeling, Jalpaiguri, Uttar Dinajpur, Howrah, Hoogly, Nadia, North 24 Parganas and South 24 Parganas are the places which would be bid in the next round of auction.

Places in Bihar and Jharkhand that are lined up for bidding are Araria, Purnia, Katihar, Kishanganj, Arwal, Jehanabad, Bhojpur, Buxar, Khagaria, Saharsa, Madhepura, Lakhisarai, Munger, Bhagalpur, Muzafarpur, Vaishali, Saran, Samastipur, Nawada, Kodarma, Deoghar, Sheikhpura and Jamui.

Other states where bids have been called are Andhra Pradesh, Karnataka, Madhya Pradesh, and Uttar Pradesh.

Analysts said: “Since CGD businesses in large cities are more profitable, licences for them are expected to draw greater bidding interest. Bidders are also expected to favour GAs adjacent to existing pipeline networks. Increased participation from public sector oil majors is likely given the government impetus and higher weightage given to the number of new domestic connections in the bidding criteria.”

Bidders have been asked to quote the number of CNG stations to be set up and the number of domestic cooking gas connections to be given in the first eight years of operations. Also, they have to quote the length of pipeline to be laid in the GA and the tariff proposed for city gas and CNG, according to the PNGRB.

Companies having a net worth of not less than Rs 150 crore can bid for GAs with a population of 50 lakh and more while the same for GAs with a population of 20-50 lakh has been proposed at Rs 100 crore.

The net worth eligibility goes down with population, with a Rs 5 crore net worth firm being eligible to bid for GAs that have less than 10 lakh population.

The PNGRB said any entity with security CGD licence would have to enter into a firm natural gas supply agreement with a natural gas producer or marketer in a transparent manner on the principle of ‘arm’s length’ within 180 days of winning a licence.