Indian Oil Corporation Ltd, Refinery HQ, Scope 

Complex, New Delhi 

Demand analysis and selection of city for CGD

network establishment on proposed Dadri-
Panipat (RLNG) pipeline  

(Report submitted in partial fulfilment of Masters in Business

Administration (MBA) in Oil and Gas )  

Subodh Maithani,
8/1/2008
 DECLARATION

I, Subodh Maithani, hereby declare that the project titled “Demand analysis and selection of
city for CGD network establishment on proposed Dadri-Panipat (RLNG) pipeline” is an
original work done during my organization training as component of Masters in Business
Administration (MBA) in Oil & Gas Management of University of Petroleum and Energy
Studies, Dehradun from June 2, 2008 to July 31, 2008 with Indian Oil Corporation Ltd.  

Place: Delhi

Date: July 31, 2008 (Subodh Maithani)

Class of 2009

  Page II 
EXECUTIVE SUMMARY

Amidst increasing prices of crude oil and increasing environmental concerns Natural Gas has
been considered as one of the possible solution to the predicament. Many steps have been
taken all around the globe to combat the situation created by diminishing Oil reserves. Cross
border pipelines have now become so fissile and feasible to lay just because of the
seriousness of the existing energy conditions.

In India, several steps have been taken in an order to curb the energy scarcity out of which
introduction of NELP rounds, NGH Programme, CBM exploration programme and
harnessing of renewable sources of energy are commendable. Similarly, on the front of
downstream operations steps have been taken for making easy availability of natural gas to
the common people. The study on demand analysis and selection of city for CGD network
establishment on proposed Dadri-Panipat (RLNG) pipeline also covers on e of the major
portion of the City gas Distribution laying process.

The study covers the current scenario of Oil and Gas industry with a brief introduction to the
sources and existing statistical figures of Crude Oil and Natural Gas. It also covers the CGD
structure in detail and provides an easy access to the CGD network processing.

The study encapsulate the rationale and current status of proposed RLNG pipeline of IOCL
and carry out SWOT analysis of the organization regarding the City Gas Distribution network
establishment. It also calculates the potential demand of Natural Gas in probable areas and
cities.

The study proposes few suggestions regarding the marketing of Natural Gas and comes out
with a conclusion about the city selection for establishment of CGD network on the basis of
demand figures and some external factors.

  Page iii 
ACKNOWLEDGEMENT

The summer training at Indian Oil Corporation Ltd. (IOCL) had been a great exposure and
learning for me of working in a professional corporate environment. I take this opportunity to
express my gratitude to Mr. Manish Grover, Sr. Manager (BD-Gas Marketing), IOCL for
providing me this opportunity to undertake this study assignment “Demand analysis and
selection of city for CGD network establishment on proposed Dadri-Panipat (RLNG)
pipeline”.

Though the subject was difficult, but with the dedicated support and guidance from Mr.
Manish Grover, IOCL helped me in delivering the best.

I would also like to thank Mr. Alok Kumar Roy, Dy. Manager (BD- Gas), IOCL, my
reporting officer, for his continuous guidance and motivation all through the study.

There are many people who have contributed to the success of my study, I would like to
acknowledge my sincere thanks to ICICI officials especially to Mr. Pankaj Mathur, Mr.
Aqueel Ahmad, Ms. Seema Dikshit Venkatesh, Mr. Suman Kumar Mishra. Mr. Rajendra
Sharma, Mr. Kuldeep Verma, Mr. Navneet, Mr. Jayant and Mr. Praveen Kumar for providing
their valuable inputs and time.

I am also thankful to Mr. Indra Prakash, Chief Marketing Manager, Green Gas Ltd. I am
indebted to University of Petroleum and Energy Studies (UPES), Dehradun for providing me
an opportunity to work on this study.

Last but not least, I thank my family and friends for their moral support.

  Page iv 
TABLE OF CONTENTS
 
DECLARATION .............................................................................................................................................. II 
 
EXECUTIVE SUMMARY ................................................................................................................................ III 
 
ACKNOWLEDGEMENT ................................................................................................................................. IV 
 
LIST OF FIGURES .......................................................................................................................................... VI 
 
CHAPTER 1 ................................................................................................................................................... 1 
 
CHAPTER 2: NATURAL GAS ......................................................................................................................... 3 
 
CHAPTER 3: CITY GAS DISTRIBUTION .......................................................................................................... 12 
 
CHAPTER 4: INDIAN OIL CORPORATION LTD. .............................................................................................. 24 
 
CHAPTER 5: DADRI‐PANIPAT PIPELINE PROJECT .......................................................................................... 26 
 
CHAPTER 6: HARYANA (HRY) ...................................................................................................................... 29 
 
CHAPTER 7: UTTAR PRADESH (U.P.) ......................................................................................................... 35 
 
CHAPTER 8: REGULATIONS ......................................................................................................................... 46 
 
CHAPTER 9: SUGGESTIONS AND CONCLUSION ............................................................................................ 60 
 
ANNEXURE1. REFERENCES .......................................................................................................................... 63 

  Page v 
LIST OF FIGURES

Figure 1. LNG Supply Chain ..................................................................................................... 6

Figure 2. Interstate Gas Grid Envisaged by GAIL .................................................................... 7

Figure 3. Proposed route for IPI and TAPI pipelines ................................................................ 9

Figure 4. Distribution of Organic Carbon in Earth reservoirs to total Organic Carbon(18776.6

Gigaton ..................................................................................................................................... 10

Figure 5. Indian Gas Chain ..................................................................................................... 12

Figure 6. Segment size and profitability ................................................................................. 14

Figure 7. Process description of CNG network ...................................................................... 16

Figure 8. CNG process network............................................................................................... 19

Figure 9. Haryana..................................................................................................................... 29

Figure 10. District map of Panipat ........................................................................................... 30

Figure 11.Estimated industrial demand distribution of NG for Panipat district ..................... 31

Figure 12. Estimated Industrial demand Distribution of NG in Sonepat District ................... 33

Figure 13. Estimated Industrial demand distribution of NG in Baghpat district in year 2012-
13.............................................................................................................................................. 36

Figure 14.Estimated industrial demand distribution of NG for Meerut district ...................... 39

Figure 15. .Estimated industrial demand distribution of NG for Ghaziabad district .............. 41

Figure16.Estimated industrial demand distribution of NG for G.B. Nagar district ................ 43

Figure 17. Estimated industrial demand distribution of NG in Bulandshahr district ............. 44

Figure 18. Procedure for cancellation of exclusivity ............................................................... 57

  Page vi 
CHAPTER 1

1.1 INRODUCTION

The study titled “Demand analysis and selection of city for CGD network establishment
on proposed Dadri-Panipat (RLNG) pipeline” was intended to zero potential areas for
Indian Oil Corp. Ltd. in the possible and prolific state of Haryana and Uttar Pradesh and
finding out the best possible way to implement the CGD network. The study also provides an
insight on the selection procedure of a District/City for the establishment of CGD network on
a proposed pipeline and the rationale behind the selection. Promoting increasing and
extensive consumption of Natural Gas in Indian cities, the study provides a profitable channel
to the company to achieve desired goals with the fulfillment of its social commitment towards
the citizens of the state itself.

1.2 OBJECTIVES
The objective of this study can be stated as:

• To elaborate the CGD network establishment process;

• To analyze the sales potential in different parts of state of Haryana and Uttar Pradesh
along the Dadri-Panipat pipeline;
• To establish a study coherent to the existing work in an order to strategically
implement the CGD network in the prolific state;
• To provide an insight into the selection criteria of the city/district for CGD
establishment and;
• Suggesting some of the possible methods to be considered while making of the
implementation strategy.

1.3 METHODOLOGY

The study was a desk based research. Information on various aspects related to demand for
Natural Gas was collected through various reliable sources. Data regarding the existing
demand from IOCL senior decision makers is collected via e-mails and personal contact.
Though, due to non-disclosure policy of the organization not much of the information was
made available.

1.4 STRUCTURE OF THE REPORT

Chapter 2 introduces Natural Gas (NG) as a fuel of future in terms of its available resources
and benefits associated with it.

Chapter 3 gives an overview of the city gas distribution network with appropriate examples

Chapter 4 talks about the Indian Oil Corp. Ltd and its interest in CGD network establishment.
It also include SWOT analysis of IOC in terms of CGD network.\

  Page 1 
Chapter 5 briefly introduces Dadri-Panipat RLNG pipeline project and covers the rationale
and current status of pipeline laying process.

Chapter 6 covers the state of Haryana and two of its districts in order to ascertain the demand
of natural gas in those districts, covering Industrial, CNG and PNG demand.

Chapter 7 talks about Uttar Pradesh (UP) as one of the option available to the IOC Ltd. for
CGD network establishment and calculates the estimated NG demand for 6 cities.

Chapter 8 deals with the regulations laid down by PNGRB board, mandatory to any entity
interested in laying pipeline.

Chapter 9 comes out with conclusion and key learnings from the study.

  Page 2 
CHAPTER 2: NATURAL GAS

2.1 INTRODUCTION

Natural gas is a mixture of hydrocarbon gases and is a colorless, odorless fuel, environment
friendly energy source, which burns cleaner than many other traditional fossil fuels. It is
highly flammable hydrocarbon gas chiefly consisting methane CH4 and on the basis of the
concentration of methane it is also termed as Dry and Wet gas. In addition to it natural gas
may also include other gases such as oxygen, nitrogen, hydrogen, ethane, ethylene, propane
and even some helium. As far as its occurrence is concerned it occurs deep below the surface
of the earth in three principal forms- associated gas, non-associated gas and gas condensate.
Associated gas is found in crude oil reservoirs, either dissolved in the crude oil or in
conjunction with the crude oil deposits while Non-Associated gas occurs in reservoirs
separate from crude oil wells. It is also termed as dry gas. Gas Condensate is the hydrocarbon
liquid dissolved in saturated natural gas that comes out of solution when pressure drops
below dew point. Natural gas is used mainly in the industrial, commercial, transportation, and
domestic sectors out of which power and fertilizer sector consume maximum amount of
natural gas in India.

Natural Gas occupies about 8.5% of the total energy basket of the country which is much
lesser than the world average of 24%. However, the scenario is fast changing, largely because
of the expected increase in the availability of natural gas in the country. The structure of
primary energy consumption in India shows that coal (51%) still dominates as the major
energy source. Hydrocarbon (45%) is the next available energy provider of the nation.
Natural gas is fast emerging as an alternative; it meets around 9% of the primary energy
needs. Considering the global trend of shift in energy axis from oil to gas, the share of gas in
consumption pattern, in the Indian context is expected to increase gradually in the days to
come.

2.1.1 Applications of Natural Gas

Natural gas is used by the end user in different ways as per need. The various ways or
applications of natural gas in industry as well as household needs are:

1. Natural gas as a fuel in electricity generation by utilities;

2. Natural gas as a clean fuel in cooking and household needs in the form of Piped
Natural Gas (PNG);
3. Natural gas as a fuel for the boilers, furnaces, baking ovens and air conditioning in
Industries;
4. Natural gas as a motor fuel in the form of Compressed Natural Gas (CNG) and;
5. As a petrochemical and fertilizer industry feedstock.

  Page 3 
2.2 SOURCES AND SUPPLY

Natural gas in India is available through different channels. The two conventional ways of
sourcing natural gas are:

1. Exploration and production activities in India itself.

2. LNG supplies from different parts of world.

In addition to the above mentioned sources and supply modes some other means are also
followed by the Govt. of India in an order to ensure future energy securities which are:

1. Coal Bed Methane to ensure the availability of gas through large coal reserves
available in the country itself.
2. Transnational NG pipelines (eg. Turkmenistan-Afghanistan-Pakistan-India pipeline,
Iran-Pakistan-India pipeline etc.)
3. Natural Gas Hydrates Programme (NGHP) is employed in order to evaluate NG
hydrate resources and the possible ways to exploit them.
4. Underground Coal Gasification Programme.

2.2.1 Exploration and Production (E&P) sector of India

The E&P activities were promoted with the introduction of New Exploration and Licensing
Policy (NELP I) in 1997 which became effective in year 1999. So far 6 NELP rounds have
been successfully undertaken in which 162 shallow water, deepwater and onland blocks are
awarded to the National Oil Companies (NOC), PSUs, JVs and other foreign exploration
companies. The initial discoveries of Cambay basin, Mahanadi basin and Krishna Godavari
(KG) offshore were found to be interesting enough to promote more and more NELP bidding
rounds. Similarly, significant discoveries were also made in Rajasthan. As per the draft
utilization Policy-2007 of GoI E&P activities accounts for nearly 36% of total estimated
demand for the current year and it is supposed to increase in the coming future. Recently
NELP-VII was introduced with attractive offers and regulations which will definitely
enhance the E&P activities associated with the gas production. According to the sources GoI
is committed to offer exploration blocks in coming years and in the next five years, area
under exploration for Indian sedimentary basins is expected to increase from 44% at present
to 80%. By 2015, whole sedimentary basin area is planned to be brought under exploration.
Currently the Indian gas industry is eyeing on the supply from Reliance KG basin block
which will start supply of 8 MMSCMD of natural gas from the second half of the year 2008.

2.2.2 LNG supply scenario in India

With the growing energy demand and the current state of energy deficienc, LNG came out as
a boon for a country like India. From the current statistics it can be easily inferred that the
future of Indian energy scenario heavily depends on the LNG supplies. The current gas
availability position from various sources in country is as follows:

  Page 4 
                                                                                                                                         (in MMSCMD) 
Source   Present 
ONGC/OIL  53 
Pvt./ JVs  20 
Total Availability  73
LNG imports by PLL (long term1)  18 
2
Spot LNG   05 
Grand Total  96 
Table 1. Gas Availability Position in India (Source: Draft Paper on Utilization of Natural Gas- India-2007)

Since gas supplies through spot cargoes depends on the international market conditions, India
is focusing on the development of other gas terminals with long term contracted LNG supply
in addition to existing terminals of Dahej, Hazira and Ratnagiri. Similarly, consideration
about the estimated demand increase lead to the selection of Kochi and Mangalore for
development of LNG regassification/liquefaction terminals which will start its operations
from the year 2010-11 and 2011-12 respectively. The overall LNG projections associated
with the vision are3:

LNG Supply  2007‐08  2008‐09  2009‐10  2010‐11  2011‐12 

source 
Dahej  5.00  5.00  7.50  10.00  10.00 
Hazira  2.50  2.50 2.50 2.50 2.50 
Dabhol   1.20  2.10  5.00  5.00  5.00 
Kochi   ‐‐‐‐‐‐  ‐‐‐‐‐‐ ‐‐‐‐‐‐ 2.50 2.50 
Mangalore  ‐‐‐‐‐‐  ‐‐‐‐‐‐ ‐‐‐‐‐‐ ‐‐‐‐‐‐ 1.25 
Total LNG supply  8.70  9.6  15  20  21.25 
(MMTPA) 
Total LNG supply  30.45  33.60 52.50 70.00 74.375 
(MMSCMD)  
Table 2. . LNG Projections (Source: Draft Paper on Utilization of Natural Gas- India-2007)

Currently Dahej PLL is the major regassification terminal of India having long term contract
of 25 years with RasGas of Qatar for the supply of 5 MMTPA of LNG but with the advent of
a more active spot LNG market Shell Hazira regassification plant also came into existence in
an order to maintain the LNG supplies in the country.

1
Long term contract is one of the types of contract usually signed by the customer with the supplier in an order
to ensure LNG supplies for a long period of time.
2
Spot LNG is the LNG produced in excess of contractual arrangements &, therefore, available for sale outside
these long term contractual arrangements.
3
Hazira expansion plan to 5.00 MMTPA is not considered in the 11th plan while Mangalore terminal will
partially be commissioned in year 2011-12.

  Page 5 
Figure 1. LNG Supply Chain

The above figure shows the normal LNG supply chain network which comprises of different
facilities for the whole setup. In order to ensure perfect distribution to the end user a robust
pipeline network is required which is still a major challenge to India. Currently India has a
domestic gas pipeline network of 10500 km with current pipeline density of 116
km/MMSCMD. The total domestic gas pipeline network of India in comparison to some
other countries is shown below:

Country   Domestic gas pipeline network  Domestic gas pipeline 

(in km)  density 
 (in km/MMSCMD) 
USA  18341138  1086 
UK  265155  1016
Germany  230448  1015 
Italy  171699  975 
France  155943  1405
Pakistan  56400  1044
Spain  16295  319 
India  10500  116 
Table 3. Comparison of Gas Pipeline Network (Source: assocham.org, press release, May 5, 2008)

In order to cope with the inefficiency generated due to inefficient pipeline infrastructure
PSUs started working on the pipeline laying work and contributed significantly in its
development. The HVJ and DVPL pipelines are the best example of the pipelines laying
ability of the PSUs. The map shown below describes the interstate gas grid envisaged by
GAIL in year 2006 which was focusing on the coverage with a pipeline with a length of 1500
km.

  Page 6 
Figure 2. Interstate Gas Grid Envisaged by GAIL (Source: Corporate Presentation on National Gas
Pipeline and LNG by Mr. B.S. Negi (Dir. BD, GAIL India ltd.) on October2006)

The vision of GAIL generates a pipeline network of 15204 km length. Some of its projections
were based on the effective establishment of transnational pipeline (eg. Myanmar-
Bangladesh-India) which ensures the commitment of GoI in bringing Natural gas from
external sources.

Sl. No   Description   Pipeline Length (km)  

1   HVJ Pipeline (HVJPL   2700 

2   Dahej‐Vijaipur P/L project (DVPL)   610  

3   Dahej – Uran P/L Project (DUPLP)   474  

4   Dabhol‐ Panvel P/L Project  (DPPLP)   322  

5  Vijaipur –Kota Mathania (Rajasthan Sector) 565

6   Dadri‐ Nangal P/L Project (DNPLP)   572  

7   Kakinada‐Pune ‐Uran P/L project (KUPLP)   1024  

8   Kakinada–Chennai P/L project(KCPLP)   580  

9   Dabhol‐ Bangalore–Cannai P/L Project (DBCPLP)  1100 

10   Dahej‐Jamnagar‐Porbandar P/L Project (DJPPLP)   685  

  Page 7 
11   Jagdishpur‐Haldia  P/L project (JHPL)  876 

12   Vijaipur‐Auraiya –Jagdishpur P/L Project (VAJPLP)   571  

13   Kakinada –Haldia  P/L Project (KHPLP)   1037  

14   Kochi‐ Kanjjirkkod – Mnagalore  425 

15   Bangalore‐ Coimbatore – Kochi  440 

16   Chennai‐ Tuticorin   550 

17   Hyderabad‐ Vijaipur   1100  

18   Myanmar‐India Border to Gaya  1573 

  Total Pipeline Length  15204 
Table 4. Description of Envisaged Gail Pipeline Network (Source: Corporate Presentation on
National Gas Pipeline and LNG by Mr. B.S. Negi (Dir. BD, GAIL India ltd.) on October 2006)

2.2.3 Upcoming Resources

1. Coal Bed Methane (CBM): Coal Bed Methane (CBM) is NG found in coal beds and
used for a variety of purposes that range from domestic, commercial, industrial to
electrical power generation. Other gases that may exist in coal gas deposits in trace
amounts are ethane, propane, butane, carbon dioxide and nitrogen. Coal Bed Methane
(CBM) is natural gas found in coal beds and used for a variety of purposes that range
from domestic, commercial, industrial to electrical power generation. In 1997 Indian
government formed a CBM policy that established the Ministry of Petroleum and
Natural Gas as the CBM administrative agency. Key elements of that policy are:

• No upfront bonus.
• No signature bonus.
• No participating interest of the GoI.
• CBM development blocks awarded through a competitive bidding process.
• A 7 year tax holiday, beginning with the date of commercial CBM production.
• Freedom to market in domestic market at market determined prices.
• Imported equipment for CBM development exempted from customs duty
(DGH, 2004-05).

In May 2001, the Indian government for the first time offered blocks for exploration
and production of CBM through an international bidding process. Reliance Industries,
Essar, and ONGC won the bids for the blocks. The government launched a second
round of bidding on nine CBM blocks in May 2003. Eight blocks were awarded to
Reliance and ONGC. The third bidding round of CBM blocks was offered in
February 2006 in which GoI offered 10 blocks. Out of these, two blocks each were
located in the States of Andhra Pradesh, Chhattisgarh, Madhya Pradesh & Rajasthan
and one block each in Jharkhand & West Bengal.

  Page 8 
2. Transnational Pipelines: With the growing demand of NG as 21st century fuel the
need of laying transnational pipeline from the neighbouring gas rich countries was
experienced. Since pipelines provide natural gas at a lower cost than in other modes
they are much more preferred than other competitive modes of transporting natural
gas. Geographically, India is
flanked by large gas reserves
to the East, West and North
and thus strategically located
to meet its natural gas
requirements through
transnational pipeline. These
sources include the leading
countries in terms of their
proven gas reserves, viz., Iran
(15% of world’s reserves)
and Qatar (14% of world’s
resources). Similarly,
Bangladesh and Myanmar on
the Eastern side, and the
Central Asian Republic of
Turkmenistan in the North
Figure 3. Proposed route for IPI and TAPI pipelines
hold substantial gas reserves.
Considering that the Indian gas markets, especially those in the Northern and Eastern
parts of the country are at economic pipeline distance from regional gas reserves,
there is a price advantage of gas imports through pipelines vis-à-vis LNG route for
these markets, and therefore, all possibilities including need to be explored for import
of natural gas through pipelines. In these TAPI Gas Pipeline and IPI Gas pipelines are
the possible opportunities. The primary purpose of both the pipelines is to fulfill the
requirement of Gas deficit Northern India & Pakistan.

3. Natural Gas Hydrates: A gas hydrate is a crystalline solid; its building blocks
consist of a gas molecule surrounded by a cage of water molecules. Thus it is similar
to ice, except that the crystalline structure is stabilized by the guest gas molecule
within the cage of water molecules. Many gases have molecular sizes suitable to form
hydrate, including naturally occurring gases such as carbon dioxide, hydrogen
sulphide, and several low-carbon-number hydrocarbons, but most marine gas hydrates
that have been analyzed are methane hydrates. The reasons for increasing efforts in
the part of Methane Gas Hydrates are:
• It contains a great volume of methane, which indicates a potential as a future
energy resource.
• It may function as a source or sink for atmospheric methane, which may
influence global climate
• It can affect sediment strength, which can initiate landslides on the slope and
rise.
• The worldwide amounts of carbon bound in gas hydrates is conservatively
estimated to total twice the amount of carbon to be found in all known fossil
fuels on Earth.

  Page 9 
 Inn Indian conntext a lot off work is stilll Percenttage of ttotal 
leeft to be doone. At present only thee
reesource estiimation andd delineationn
carbo on quanttity
of prospectivve areas for f methanee 5% 0% Gas Hydratess
hyydrate has been done. Preliminaryy
sttudy of seeismic attriibutes from m 15%
Inndian deep water offshhore by Oiil 53%
annd Natural Gas Comm mission has 27
7% Fossil fuels
shhown the presence of largee
reeservoirs of methane hydrate aat
depths of 10000 to 3000 m, and has
suuggested thaat Krishna–G Godavari andd Land (includees 
soil, biota, peeat 
A
Andaman–Ni icobar Islannds may bee and detritus)
exxplored forr hydrates. About 7.55
T
Tcm of methhane is estimated in ann
arrea of abouut 80,000 km2 k from F Figure 4. Disstribution of OOrganic Carbbon in Earth
Inndian deep offshores, which is r
reservoirs to total Organic c Carbon(187776.6 Gigatonn
abbout 5 tiimes of the t total
coonventional gas reserves of the couuntry. Besidees, Gas Authhority of Inddia Limited is
caarrying exten nsive investiigations on m methane hyd drates.
T date, a laarge numberr of seismic data coveriing offshore areas of thee country haas
Till
been studied d including special proccessing of large data for identificcation of gaas
hyydrates signnatures. Baseed on these studies, threee areas in KG K Basin, Andaman
A Seea
annd west coaast were idenntified for fu further scientific investiggations. A roadr map waas
allso preparedd for NGHP4. As per thhe road map,, detailed geeoscientific investigation
i ns
w
were carried out in thee KG Basinn and Kerala-Konkan basin b by NGGHP througgh
N
National Insttitute of Occeanographyy (NIO). Baased on thee results of seismic data
sttudies and geoscientific
g investigatioons, ten sitess in Mahanaddi, KG & Kerala-Konka
K an
basins and An ndaman Seaa have been short listed for drilling/ coring of gaas hydrates in i
thhe deepwater. The drillin ng/ coring ffor gas hydraates is a veryy specializedd activity annd
Inndia will bee only third country in the world to t do so, aft fter USA annd Japan. Thhe
seervices for such speciallized activitty are not available
a com mmercially in the world.
W sustaineed efforts byy DGH, withh IODP & USA,
With U the drilllship JOIDEES Resolutioon
allong with alll the scienttific equipm ment and scieentists onbooard is workking in Indiaan
offshore sincee May 20066, under an aagreement beetween DGH H and a "US S Consortium m"
of companiess. After obttaining the gas hydratee cores seveeral scientifiic studies arre
being carriedd out onboardd the ship annd will also be carried oout in severaal laboratoriees
inn India, USAA and Canad da for whichh separate ag greements haave been siggned by DGH
annd correspoonding agenncies. The studies willl lead to understand gas hydrate
chharacterizatiion in Indiann offshore arreas and also o in carryingg out resourcces estimatees,
ass well as R&D
R in this field. Durinng drilling/ccoring by drrillship presence of hugge
quuantities of Gas Hydrattes has beenn detected inn one of thee wells in K.G. K Basin. A

4
NGHP is a consortium of o National E& &P companies (Oil and Naturral Gas Corporration Ltd., Gass Authority of
India Ltd & Oil India Ltdd.) and Nationaal Research Insstitutions (National Institute oof Oceanography, National
Geophysiccal Research Innstitute and Nattional Institute of Ocean Techhnology) steereed by MoPNG G and DGH in
order to acchieve the comm
mercial producction of Gas thrrough NG hyd drates beyond 2010.
2
 specialized core repository is also being constructed in Panvel, Mumbai for storing all
the valuable gas hydrate cores for future studies.

2.3 ADVANTAGES OF USING NATURAL GAS

Natural Gas offers multitude of advantages pertaining to the environment as well as the
energy efficiency. Some major advantages or benefits that it offers are:

1. It is a clean, efficient, safe and environment friendly fuel hence offer more efficiency
without sacrificing the environmental concern;
2. It does not required storage yard as the gas is directly delivered to the pipeline hence
offer less chances of any mishap due to storage leakage and spillage of storage tanks;
3. There is no risk of breakdown in fuel supply due to order processing delays to
replenish the fuel inventory;
4. It minimizes the manpower and mechanical power required for handling the fuel; and,
5. In terms of the current global oil scarcity it offers the advantage of being the most
efficient and profitable alternative fuel.

  Page 11 
CHAPTER 3: CITY GAS DISTRIBUTION

3.1 INTRODUCTION

With the growing concern about environmental aspect GoI started CNG rollouts in cities
suffering from increasing pollution. The CNG demand got a boost with the Supreme Court
directive on pollution reduction in 12 major cities in India and hence provided a platform to a
highly ambitious sector of City Gas Distribution in cities like Delhi. Mumbai, Surat,
Lucknow etc. Various organizations like GAIL, IOCL, BPCL, GGCL entered into this sector
by forming JVs with other players and provided the sector the necessary thrust it deserve.

The CGD network caters to the supply of Piped Natural Gas (PNG) to domestic Households
(HH) & small commercial/industrial establishments & CNG to automobile sector.
Considering CGD as the last milestone of Indian gas chain lot of efforts has been done by
various players and GoI to ensure last mile connectivity of gas which has been substantial in
the current decade.

Figure 5. Indian Gas Chain (Source: GGCL Investors Meet, March27, 2008)

With the introduction of PSUs in all of the sectors of the Indian gas chain the gas chain has
become more structured and organized. Currently major oil PSUs like Indian Oil Corporation
Ltd, Bharat Petroleum Corp. Ltd and Hindustan Petroleum Corp. Ltd are providing
substantial support in all parts of the gas chain with the formation of JVS like Green Gas Ltd
(GGL) in Lucknow & Agra, Indraprastha Gas Ltd (IGL) in Delhi-NCR etc. With a vision to
empower most of the cities and the citizens by providing access to natural gas oil PSUs are
coming up with more plans on CGD network development.

The demand pattern (Gas) zeroed by the Ministry of Petroleum and Natural Gas (MoPNG) in
its Draft Paper on Utilization of Natural Gas-2007 for CGD network is as follows:

  Page 12 
Year  Estimated Demand of Natural gas (In 
MMSCMD) 
2006‐07  11.00 
2007‐08  12.08
2008‐09  12.93 
2009‐10  13.83 
2010‐11  14.80 
2011‐12  15.83
Table 5. Estimated Demand Pattern of NG in CGD Networks (Source: Draft paper on utilization of
natural gas in India-2007)

Considering the above stated projections for the growing demand of NG it has been evident
that the CGD networks are going to get a special place in the Indian national government
policies. The table shown below will show the picture of estimated NG demand on a macro
level and will provide the comparative analysis of demand increase in CGD sector with
respect to the other sectors.

Sector wise Gas Demand Projections 2007‐12 (in MMSCMD) 
  2007‐08  2008‐09  2009‐10  2010‐11  2011‐12 
Power  79.70 91.20 102.70 114.20  126.57
Fertilizer  41.02  42.89  55.90  76.26  76.26 
CGD  12.08  12.93  13.83  14.80  15.83 
Industrial  15.00  16.05  17.17  18.38  19.66 
Petrochemicals/Refineries/Internal  25.37 27.15 29.05 31.08  33.25
Consumption 
Sponge iron/Steel  6.00 6.42 6.87 7.35  7.86 
Total  179.17  196.64  225.52  262.07  279.43 
Table 6. Source: Draft paper on utilization of Natural Gas in India-2007

  2008‐09  2009‐10  2010‐11  2011‐12  Average 

Percentage 
increase 
Power  14.43 12.60 11.19 10.83  14.70
Fertilizer  4.56  30.33  36.42  0.0  21.481 
CGD  7.03  6.96  7.01  7.0  7.76 
Industrial  7.00 7.00 7.04 6.96  7.76 
Petrochemicals/Refineries/Internal  7.01 7.00 6.99 6.98  7.76 
Consumption 
Sponge iron/Steel  7.00  7.00  6.99  6.94  7.76 
Table 7. Percentage increase in estimated gas demand in different sectors

The above drawn tables show that the projections are based on the estimated 7.0 percent
growth rate in sectors other than power and fertilizers. The inference that can be drawn easily
is that while the demand in power and fertilizer sectors will grow sharply because of more
and more requirements and introduction of CCGT (Combined Cycle gas Turbine) plants in
power sector the development work in establishing the CGD networks will be done in a
consistent and phased manner.

  Page 13 
The consumers of NG via CGD network are classified into different categories based on their
capacity and end use. They are broadly classified as:

Serial No.  Type of Consumer  Description 

1  Domestic consumers  Consumers  demanding  NG  for  cooking  as  well  as  for 
heating water etc. 
2  Commercial consumers While  Hotels,  Restaurants,  Sweetshops,  Hospitals, 
Offices etc. would primarily require gas for the Cooking 
and Hot Water requirement, there  are  large number of 
applications within such segments that can use gas.   
3  Industrial consumers   Industrial  Consumers  are  classified  in  two  primary 
categories, the Large Scale Industries (LSI) & Medium & 
Small Scale Industries5 
4   Transport Sector  Transport  Sector  need  NG  for  the  transportation 
purpose  and  catered  through  the  development  of 
Compressed Natural Gas stations network.  

All four types of consumers consume different amount of Natural gas in performing their
operations. They need NG via different channels and the form in which they receive NG is
also different (like automobiles receive it in the form of CNG while domestic HH receives it
in the form of PNG) leading to a different prices for them and creates a different margin with
each MMSCMD of gas supplied to them. In a nutshell, the profitability reduces from
commercial consumer to bulk consumer. The picture shown below will establish the relation
between some major factors considered while developing CGD network in a city.

Figure 6. Segment size and profitability (Source: GGCL Investors meet, March27, 2007)

5
The Large Scale Industrial units demand (more than 50,000 SCMD) would be supplied gas from trunk
pipeline i.e. Steel Grid at relatively higher pressures as compared to the other industrial segment while The
Medium & Small industrial units demand (less than 50,000 SCMD) would be met from distribution network
having a mix of Steel & Poly-Ethylene pipes depending on the need of the consumer in terms of pressure as well
as volume of Gas required.

  Page 14 
3.2 COMPRESSED NATURAL GAS (CNG)

Compressed Natural Gas, in short CNG is nothing but Natural gas compressed for the use of
transport sector. Due to its low density, it is compressed to a pressure of 200-250 kg/sq. cm to
enhance the vehicle on-board storage capacity. Principal constituents of NG are Methane and
Ethane, but most gases contain varying amounts of heavier hydrocarbons that are normally
removed by processing. After recovery of the heavier hydrocarbons, the remaining gas,
known as lean gas, is returned to the pipeline system. Natural gas is drawn from pipeline
system for compression and distribution as CNG. Predominantly Methane is available in the
lean gas; hence CNG contains mostly methane (normally not less than 85%).

CNG is one of the safest fuels as it has a high auto-ignition temperature of about 540 degree
centigrade and a very narrow range of flammability (i.e. 5% to 15%). In other words, if CNG
concentration in the air is less than 5% or above 15%, it will not burn. Further, it is lighter
than air and in case of any leakage, natural gas will go up in the air and chance of any
ignition is remote.

3.2.1 Types of CNG stations

CNG stations are of four major types depending upon the structure and operations:

1 CNG Mother Stations: Mother Stations are connected to the pipeline and have high
compression capacity. These stations supply CNG to both vehicles and daughter stations
through mobile cascades 6 . The Mother Station requires heavy investment towards
compressor, dispensers, cascades, pipelines etc.

2 CNG Online Station: CNG vehicle storage cylinders need to be fitted at a pressure of
200 bars. Online stations are equipped with a compressor of relatively small capacity,
which compresses low-pressure pipeline gas to the pressure of 250 bars for dispensing
CNG to the vehicle cylinder.

3 CNG Daughter Station: The Daughter Stations dispense CNG using mobile cascades.
These mobile cascades at daughter stations are replaced when pressure falls and pressure
depleted mobile cascade is refilled at Mother Station. The investment is least among all
types of CNG stations.

4 CNG Daughter-Booster Station: Installing a booster compressor can eliminate

drawbacks of daughter stations. The mobile cascade can be connected to the dispensing
system through a booster. Daughter booster is designed to take variable suction pressure
and discharge at constant pressure of 200 bars to the vehicle being filled with CNG.

The diagram shown below represents the actual flow of NG from trunk pipeline right up to
the end user.

6
Mobile cascades are cylinders mounted on a vehicle to transport CNG from mother station to daughter and
daughter-booster stations.

  Page 15 
 Figure 7. Process description of CNG network (source: corporate presentation by A.K. De, IGL)

3.2.2 Design parameters for CGD network

Pipeline pressure  Specifications 
Main transmission grid line pressure (High Pressure System) = 14‐19 bar, Steel 
Distribution/Service line pressure  (Medium Pressure System) = 4 to 1.5 bar, MDPE 
Domestic connection pressure  (Low Pressure System) = 21 mbar, GI Installation 
Supply pressure (large commercial consumer)  2 bar 
Supply pressure (small commercial consumer) 300 mbar
 

CNG dispensing facilities specifications 
Inlet Pressure: 14‐19 Kg / cm2
Outlet Pressure: 255 Kg/cm2
 

Cascade capacity specifications
4500 liters of water / cascade (around 31 cylinders)= 500 kg 
2200 liters of water / cascade (around 31 cylinders) = 350 kg 
 

Average filling capacity (in kg) 
Bus  80 
Car  8 
Auto  3.5

  Page 16 
 Total filling cycle time per vehicle (in minutes) 
Bus   8
Car   4 
Auto  2 
Table 8. Specifications related to the CGD network

3.2.3 Characteristics of CNG vis-à-vis Petrol

The quantity of CNG filled by the dispenser during refueling also depends upon pressure at
the dispensing station. At maximum permitted filling pressure (200 bar), an amount of 8/9/10
Kg CNG is stored in 40/50/60 liter size cylinders respectively which is equivalent
(approximately 11.2/12.5/14 liters of petrol equivalent. However the gas quantity depends on
ambient condition and actual fill pressure.

Since CNG is a gaseous fuel, storage capacity for CNG in a vehicle is comparatively less
than that of petrol. A Fuel switch on the dashboard is fitted to enable the vehicle to run on
petrol, in case it runs out of CNG. CNG has a much higher-octane value than petrol, making
it a superior fuel. Due to absence of any lead content in CNG, the lead fouling of plugs is
eliminated. Being a gaseous fuel, CNG mixes with air easily even at very low temperatures.

Main features distinguishing CNG from Petrol and Diesel are:

Properties  Unit  CNG Petrol Diesel 

Liquid specific  ‐‐‐  ‐‐‐  0.74  0.84 
gravity 
Heat of  BTU/lbs  ‐‐‐  160  200 
evaporation 
Density relative  Air = 1  0.6  3.4  3.9 
to air 
0
Auto ignition  C  540  232‐282  225 
temperature 
Flammability limit  % in Air  5 – 15  1 – 8  0.6 – 5.5 
0
Flame  C  1790  1977  2054 
temperature 
Octane no.  ‐‐‐  127  87  ‐‐‐ 
Cetane no.  ‐‐‐  10 10 45 
Table 9. Comparison of CNG with respect to Petrol and Diesel

3.2.4 Economies of CNG

The energy content per Kilogram (Kg) of CNG is very similar to that of petroleum based
fuels, but it has lower energy content per unit of volume. The excellent knock resisting
property of CNG allow use of a higher compression ratio resulting in an increased power
output and greater fuel economy when compared to petrol. CNG can be used in engines with
a compression ratio as high as 12:1 compared to normal gasoline (7.5:1 to 10:1). At this high

  Page 17 
compression ratio, natural gas-fuelled engines have higher thermal efficiencies than those
fuelled by gasoline. The fuel efficiency of CNG driven engines is about 10-20% better than
diesel engines.

Use of CNG in vehicles results in higher mileage per unit due to its superior characteristics.
The cost of CNG is also very competitive to that of petrol and diesel. Following table depicts
the price advantage of CNG vis-à-vis other petroleum fuels currently being used in vehicles.

Economies of CNG car

Price (Delhi)  Mileage (km  Cost per Km  Annual 

Fuel per Kg per unit) (in Rs) expenses
Petrol 50.62 18 2.81222222 98427.78
Diesel 34.86 14 2.49 87150
Auto LPG 16.5 0 0
CNG 18.2 25 0.728 25480

Table 10. Average distance traveled is 100 km/day. 350 operational days in a year
Economies of CNG bus
Price per unit  Mileage (Km  Annual 
Fuel (Delhi) per unit) Cost per Km expenses
Diesel  34.86 4 8.715 915075
CNG 18.2 4.4 4.13636364 434318.1818

Table 11. Average distance traveled is 300 km/day. 350 operational days in a year
It’s been evident from the above shown table that CNG offers more mileage and since per
unit price of CNG is lesser than the price of petrol and diesel in most of the cities the savings
get more escalated. In a nutshell, CNG offers more savings with better mileage in comparison
to other competitive fuels.

3.3 STRUCTURE OF CGD NETWORK

Setting up of a CGD network is a big task in itself in terms of management of public private
interest. It is not only a matter of distribution and marketing of the product it is also about
creating a feeling of security in the mind of prospective customers. PNGRB board has
provided the guidelines in the form of its “Draft Paper on Access Codes” which has clearly
mentioned the responsibilities associated with the transporter and shipper making things more
clear to both parties. The essential elements of a CGD network are:

1. Steel grid pipeline

2. City Gate Station (CGS)
3. District Regulating Station (DRS)
4. CNG stations
5. Service Regulator (SR)

  Page 18 
All of the above mentioned facilities are directly related to each other and thus have a deep
impact on the functioning of the whole CGD network. As far as the cost is concerned the
establishment of these fundamental facilities bring major cash outflow to the distribution
company. The networking is defined as:

Figure 8. CNG process network

The above figure shows constituents of an effective CGD network where each unit perform
its job to ensure the proper working of the system. A brief description of some of the units
mentioned above is given below:

1. City Gate Station: The point where custody transfer of NG from high / medium
pressure transmission pipeline to the CGD network takes place.
2. Distribution Pressure Regulating Station/ District Regulating Station:
“Distribution Pressure Regulating Station or District Regulating Station (DPRS)”
means a station located within authorized area for CGD network having isolation,
metering, pressure regulating and overpressure protection devices.
3. Service Regulator: It reduces the gas pressure from 4 BAR to 100 mBAR and
ensures the flow of gas at constant pressure at all time.
4. Meter Regulator: Installed before the meter, the meter regulator reduces the gas
pressure from 100 mBAR to 21 mBAR.

  Page 19 
3.4 INDRAPRASTHA GAS LIMITED (IGL)

Indraprastha Gas Ltd. is one of the leading gas distribution companies in India performing the
business of City Gas Distribution. It was incorporated in 1998 and took over Delhi City Gas
Distribution Project in 1999 from GAIL (India) Limited (Formerly Gas Authority of India
Limited). The project was started to lay the network for the distribution of natural gas in the
National Capital Territory of Delhi to consumers in the domestic, transport, and commercial
sectors.

The prime business objectives of the company are:-

• To provide a safe, convenient, reliable natural gas supply to our customers in

domestic and commercial sector; and,
• To facilitate conversions of commercial and private vehicles to CNG through external
agencies.

IGL got listed in December 2003 in BSE and became a public limited company. With a
public shareholding of 55% its gross income increased to Rs 596 crore in financial year 2007
(April-December) from Rs 7 crore in year 1999-00. As per the data available 92% of its
revenue comes out of CNG business while commercial sector contributes meager 6% in the
total revenue; 2% of its business comes out of its PNG distribution network.

The success story of IGL can also be termed as the after effect of the order of Hon. Supreme
court of India which forced Indian commercial vehicle owners to turn to CNG. In less than 10
years the total number of CNG vehicles in Delhi (including buses, autos, RTVs and others)
increased by more than 30 times of the total number of CNG vehicles present in year 1999-
2000.

In less than 10 years IGL has developed its own 64 CNG station and crossed the 150 mark on
account of total number of CNG dispensing station in Delhi. Currently IGL boasts of a chain
of 166 CNG dispensing stations with a total average daily CNG sale of 1.05 million kg/day
(FY 2008).

On the front of Piped Natural Gas (PNG), IGL serves the interest of 110000 domestic, 250
small commercial and 46 large commercial consumers and sells 31 MMSCM of PNG to the
customers. In last few years the status of the company rose up to a great extent which is
evident from its dividend distribution in last5 years. The dividend which has been paid to its
share holders has been increased to 30% of equity from 5% of equity in financial year 2003.
With a great success in Delhi IGL also set up its stations in NOIDA as a step towards the
future.

In terms of coverage IGL provide CNG to the consumers of Delhi, NOIDA, Greater Noida,
Ghaziabad, Gurgaon and Faridabad directly and indirectly. It envisages a dream of adding
highway mobile dispensing units and has a target of providing PNG to 3 lakh user families in
2010.

  Page 20 
The best part of IGL is its supply; the gas it delivers comes from the nominated fields which
enable it to provide NG at a cost much lower than the market price of NG.

3.4.1 Future Outlook

IGL is now focusing on conversion of private vehicles (private cars) to CNG. In this
connection efforts are being made on the private vehicle front encouraging them to convert to
CNG mode. IGL has been coordinating with CNG kit suppliers, Transport Department,
Automotive Research Association of India (ARAI) and Vehicle Research and Development
Establishment (VRDE) to ease the process for endorsement of the same on Registration
certificate of the vehicle.

The company is in the process of enhancing its compression capacity by adding new stations
and also by converting the daughter and daughter booster stations to mother and online
stations.

IGL is also working towards expanding its gas retail network to the other cities of National
Capital Region (NCR) viz. Noida including Greater Noida, Gurgaon and Faridabad. The
Company aims to lay natural gas pipe grid in these cities to set up CNG stations and
providing PNG to domestic, commercial and industrial sectors. Recently IGL has got
approval from MoPNG to develop 50 more CNG stations in NCR region and ministry has
also directed Delhi state urban development minister to support IGL’s expansion program by
providing land to the company at affordable price.

3.5 MAHANAGAR GAS LIMITED (MGL)

The MGL project started in 1995 from Chembur and now it has covered major parts of
Mumbai through its distribution network i.e. from South Mumbai to Mira Road and Sion to
Mulund & Thane. Today MGL has become a leading consumer friendly gas company with a
customer tally of 3.52 lakhs connected PNG users and around 970 small industrial &
commercial customers. It powers over 53,942 taxis/cars , over 1.28 lakh autorickshaws, 597
BEST buses,50 TMT Buses, 260 Private Buses and 45 Mini Buses across the city through its
network of 130 CNG stations having 637 dispensing points, thus contributing to more than
760 metric tonnes reduction of pollutants every day. MGL recently launched Piped Natural
Gas in South Mumbai to bring the convenience of Natural Gas to South Mumbaikars & is
expanding the pipeline network in Navi Mumbai.

In less than 2 decades MGL has established 130 CNG outlets in Mumbai, Thane, Mira-
Bhavander and Navi Mumbai in which 118 outlets exists in Mumbai only catering 1,59,850
CNG vehicles of Mumbai only. In gross figures MGL provide CNG to the existing 1,86,467
CNG vehicles in Maharashtra.

Out of the total number of CNG stations of MGL online stations account for 113 stations
while Mother and Daughter booster stations account for 4 and 13 stations respectively.

Over the years MGL has also made significant growth in PNG sector. MGL has laid network
of over 2299.74 km of medium pressure and lower pressure PE pipelines & 238 km of High
Pressure steel network to cater to over 6 lakh potential consumers in the city. It has already

  Page 21 
covered more than 3.52 lakh domestic, 934 commercial and 36 small industrial consumers.
With this MGL has become the largest city gas distribution company in India with reference
to consumer base. In addition to it MGL also provide services like Voluntary Deposit Scheme
(VDS) to its PNG customers to make the bill payment process more easy and convenient.

3.5.1 Future Outlook

MGL has made ambitious plans for CNG & PNG expansion in Mumbai, Thane & Navi
Mumbai. It has laid around 238 km of steel pipeline and 2299.74 km of polyethylene
pipeline. Further, the plan includes setting up of more number of CNG outlets as well as
enhancing CNG compression capacity and dispensing points to provide CNG to the vehicles
with minimum possible dry run and waiting. MGL has also started looking for opportunities
to expand its area of operations in the areas adjoining Mumbai city as well as providing value
added services to the consumers.

3.6 CITY GAS ACTIVITIES IN INDIA

The following cities are covered for City Gas Distribution in India.

S.No.  Cities  Company Company incorporated on

1.  Delhi  IGL (JV of GAIL and BPCL)  Dec 1998 
2.  Mumbai  MGL (JV of GAIL and BG)  May 1995 
3.  Lucknow & Agra  Green Gas Limited (JV of GAIL  Oct 2005 
and IOC) 
4.  Kanpur  Central UP Gas Limited (JV of  Feb 2005 
GAIL and BPCL) 
5  Hyderabad,  Bhagyanagar Gas Limited (JV  Aug 2003 
Vijaywada  of GAIL & HPCL) 
6  Ahmedabad  Adani Energy Limited  Jan 2004 
7  Surat, Ankleshwar,  Gujarat Gas Company Limited  1988 
Bharuch  (A Company controlled by BG, 
UK) 
8  Tripura  Tripura Natural Gas Company  July 1990 / restructured and 
Ltd ( JV of GAIL, Govt. of  inducted GAIL as a majority 
Assam and Govt. of Tripura  partner (29%) in Feb 2005 
9  Duliajan, Digboi,  Assam Gas Company Ltd.  March 1962 
Dibrugarh, Moran, 
Naharkatiya, 
Sivasagar, Nazira, 
Simaluguri and 
Tinsukia Town 
9  Pune  Maharashtra Natural Gas  Jan 2006 
Limited (MNGL), JV of GAIL 
and BPCL 
10  Indore / Madhya  Aavantika Gas Ltd (AGL), JV of  June 2006 
Pradesh  GAIL and HPCL 
11  Gandhinagar,  Sabarmati Gas Ltd, JV of GSPC  June 2006 

  Page 22 
 Mehsana &  and BPCL
Sabarkantha (in 
Gujarat 
12  Rajkot,  GSPC Gas  2006 
GandhiNagar, NH in 
Gujarat 
13  Ahmedabad  HPCL  2006 
14  Vadodara   GAIL  1969‐70 
Table 12. Cities covered for city Gas Distribution in India (as on April, 2007)

From the above shown table, it is clear that the CGD networks are successfully established in
more than 15 cities and producing very good results for the entities developing these
networks. With a vision to increase the number of cities covered by the CGD network about
74 more cities are zeroed by GAIL India Ltd. On the other hand Reliance Industries Ltd. has
proposed to lay a city gas distribution network in around 100 cities and towns during the XI
five-year plan. The details of the applications are as follows:

City(ies) targeted for  Gas source  Pipeline connectivity 

(Andhra Pradesh)  KGD/6 Kakinada‐Ahmedabad 
Vishakhapattnam,  Kakinada,  Vijayawada, 
Nalgonda, Hyderabad 

(Maharashtra)  KGD/6  Kakinada‐Ahmedabad 

Sholapur, Pune, Thane 
(Tamil Nadu)  KGD/6  Kakinada‐Chennai pipeline 
Chennai and 25 selected cities of Tamil Nadu 
(West Bengal)  NEC‐25 Kakinada‐Basudebpur‐Howrah
Kolakata, Midinapur, North 24 Paragana & 
Bardhaman 
(Karnataka)  KGD/6 Chennai‐Bangalore‐Mangalore
Bagalokot,  Bhatkal,  Kollegal,  Belgaum,  Bidar, 
Mangalore,  Bellary,  Channapatna,  Mysore, 
Gulbarga,  Chikmangalur,  Nanjangarh,  Hatti, 
Dandeli,  Puttur,  Hospet,  Devanhalli,  Sirsi, 
Mudhol,  Dod  Ballapur,  Tumkur,  Ramdurg, 
Hassan,  Dasarahalli,  Sankeshwar,  Hoskote, 
Bommanahalli,  Wadi,  Hubli‐Dharwad, 
Krishnarajapura,  Adyar,  Hunsur, 
Byatarayanapur,  Bangalore,  Karwar, 
Davangere 
Table 13. Details of proposed CGD network by RIL (as on April, 2007)

Out of the above mentioned cities, Reliance has already submitted EOIs for 52 cities to the
PNGRB Board for the development of CGD network. The above shown facts create an aura
of increasing number of CGD networks by the end of XI five year plan and thus making
CGD a promising venture to the companies eyeing for it in the coming future.

  Page 23 
CHAPTER 4: INDIAN OIL CORPORATION LTD.

4.1 INTRODUCTION

From refining and marketing activities to E&P activities in India and overseas, Indian Oil
Corporation has registered itself in every field of operation in petroleum sector. Its ubiquitous
presence in Oil & Gas industry and leadership in its all downstream operations is leading it
towards the overall success in every aspect. Presently IOC is the largest commercial
enterprise with leading market share of 44% in downstream sector. It is the highest ranked
Indian corporate in Fortune’s list of World’s 500 Largest Companies (#135). It is also ranked
as the 20th largest petroleum company in the world by Fortune Global 500. On domestic
grounds it has been quoted as India’s Most Trusted Fuel Pump Brand by ET brand Equity-
AC Nielson Survey 2007.

The major role that it plays in Gas sector ranges from sourcing to marketing. It has got 12.5%
stake in Dahej-PLL and is in the process of sourcing more LNG, building LNG infrastructure
and expanding the customer base further. An LNG import terminal is planned at Ennore near
Chennai. IOC has incorporated a Joint Venture named as Green Gas, (GGL) with GAIL for
City Gas Distribution at Lucknow and Agra. GGL has already commissioned 4 CNG Stations
(Mother Station – 1 no and Daughter Booster Station – 3 Nos) at Lucknow. In Agra, GGL
has commissioned 3 CNG Stations (1 Mother Station and 2 Daughter Booster Stations). The
average sale of CNG at Lucknow and Agra is approx. 31,000 & 24,000 Kg / day respectively.
Considering the current operation, the projected sale is around Rs 55 Cr. However, it is
estimated that after the development of the planned project activities in 4 to 5 years, the
turnover would be in the range of Rs 400- 500 crore.

IOC has Franchise Agreements with IGL and MGL for installation of CNG Dispensing
facilities at the existing retail outlets of MS / HSD in Delhi & Mumbai respectively. Further,
IOC has executed Franchise Agreements with Adani Energy Limited and Gujarat State
Petroleum Corporation (GSPC) for providing CNG Dispensing facilities at the retail outlets
in Ahmedabad City / R.O. at National Highways of Gujarat. It is also in discussion with
Green Gas Limited, SITI Energy Limited and GEECL to sign the Franchise Agreements for
Agra & Lucknow, Moradabad and West Bengal.

IOC and GAIL has also agreed to develop the CGD projects in other Eastern States i.e.
Assam, Bihar, Jharkand, Orissa. It has executed MoU with Great Eastern Energy Company
Limited (GEECL) for joint development of City Gas Project based on Coal Bed Methane in
Assansol and Burdawan. Finalization of Joint Venture Agreement for incorporation of a JV
Company for the purpose is in advanced stage. It is also in discussion with a company
(having gas reserves in India) to jointly develop city gas projects in various cities / states and
union territories like A.P., Maharashtra, Karnataka, Tamil Nadu, Kerala, Rajasthan, Madhya
Pradesh, Punjab, Haryana, Chandigarh, Himachal Pradesh, Uttaranchal.

4.2 SWOT

SWOT analysis of the OMC in context of the City Gas Distribution is discussed in the
following table.

  Page 24 
Strengths  Weaknesses
• Presence in most of the states.  • Scarcity of experienced individuals in 
• Prior experience as a partner in GGL.  CGD. 
• Stake in Dahej‐PLL and existing  • Currently no other gas source except 
exploration blocks in India and  Dahej‐PLL is available. 
overseas. 
Opportunities  Threats 
• Increasing demand for NG in Indian  • Increasing competition in CGD 
cities.  business. 
• Increasing NG prices.  
Table 14. SWOT analysis of IOCL in terms of CGD network operations

  Page 25 
CHAPTER 5: DADRI-PANIPAT PIPELINE PROJECT

5.1 INTRODUCTION

To feed the increasing demand of Natural Gas, Dadri-Panipat RLNG pipeline marketing and
laying rights were awarded to IOCL. The pipeline will be of 132 km length and will provide
an economic means of feeding NG to the captive power plant at Panipat refinery. The major
purpose behind the laying process of Dadri-Panipat spurline is to replace Naphtha with NG.
The RLNG pipeline will receive NG through HVJ pipeline at Dadri and will cater the needs
of about 7 districts falling in the vicinity of the proposed pipeline. Major districts which will
fall in the vicinity of the proposed pipeline are:

• Panipat (HR)
• Sonipat (HR)
• Baghpat (UP)
• Meerut (UP)
• Ghaziabad (UP)
• Gautam Budh Nagar (UP)
• Bulandshahr (UP)

The proposed pipeline route (as decided by the organization) originates from GAIL's Dadri
terminal and traverse towards north, crosses NH 24 near village Masuri, Hapur-bypass-road
(NH 58), River Hindon, River Yamunna, NH-1 and enters the ROW of MJPL at MJPL
Chainage 87.70 km ex-Bijwasan and continues up to MJPL Chainage 106.00 km ex-Bijwasan
and thereafter in common ROW of MDAJ hook-up line for approx. 5.5 km. A branch
pipeline to NFL will take off at Village Diwana near Panipat from the Dadri-Panipat R-LNG
pipeline. The pipeline route has been finalized so as to avoid human habitation, factories etc.,
as far as possible.

The proposed pipeline work is under progress and the plans for setting up robust CGD
network in some of the cities close to the proposed pipeline are under consideration.
Currently, IOC is considering overall demand of NG in the above mentioned districts and has
plans to set up CGD network starting from the selected cities in a phased manner. The cities
of the district that would be selected for the development of CGD network would be covered
in a multi phased format and will be supplied NG as per the requirement of the city itself. On
some technical and commercial grounds7 it has been calculated that the area within 25 km
range (on each side) of pipeline would be best for the initial phase of the CGD network setup
process and thus facilitate further establishment of the CGD network in whole district. On the
similar grounds industrial customers with demand of more than 3000 SCMD were zeroed to
find out the potential of NG demand in respective districts. Major cities complying with the
norms and regulations of PNGRB and satisfying the minimum Return on Investment (RoI)
requirement will be considered as the first preference. The study is aimed to investigate the
profitable and compatible aspects of cities and districts and thus provide the reasons and
rationalé for selection of the best possible choice.

7
The decision is taken after considering the limited supply in first phase of CGD network setup and the
industries located near the pipeline. PNGRB regulations are also considered while taking decision

  Page 26 
There are several reasons associated to the development of CGD network in the above
mentioned districts. The reasons range from the micro and macro economic impact to the
brand positioning and stretching of IOC product line. The selection of districts/cities would
be done on the basis of total NG demand assessment including Industrial, Domestic and
Automobile sector demand in the form of NG, PNG and CNG respectively and some other
factors. The overall NG demand potential for the above mentioned districts for particular
cities is calculated through the analysis of data available to the organization. While districts
are undertaken in an order to ascertain the total maximum potential for NG market, cities are
being focused after due considerations to the phased improvements to the CGD network
process itself.

5.2 SOURCING OF NATURAL GAS

Currently IOC is getting NG from Dahej PLL and Ratnagiri Gas and Power Pvt. Ltd. On
combination of both it comes out as 5.27+1.74 MMSCMD of Natural Gas, out of which a
handsome amount of gas is supplied to its existing customers. The table below shows the list
of existing customers and the contracted amount of NG supplied by IOC to them;

Customer  Existing Qty in  Revised Qty in MMSCMD 

MMSCMD
Essar Steel  1.5000 0.5000
CFCL  1.4700 1.4700
TCL  0.5300 0.5300
NFL  0.3400 0.3400
GSPC  0.9000 0.9000
Surya Roshni  0.0240 0.0300
HNGIL  0.1100 0.1100
LNG by Road  0.0500 0.2000
Naphtha Cracker  Nil  0.5000
Mathura Refinery  0.2500 0.2500
Gujarat Refinery  NIL  0.1500
CGD  NIL  0.1500
Osaram  0.0100 0.0100
Bhushan Steel  0.0100 0.0100
Benlon  0.0100 0.0100
LM Steel  0.0080 0.0080
Delta Foods  0.0070 0.0070
Allied Strips  0.0030 0.0100
SPL  0.0100 0.0100
GGL  0.0100 0.0350
Gujarat Glass  0.0100 0.0100
Amgen Power  0.0100 0.0100
Siti Energy  0.0100 0.0100
TOTAL  5.27  5.26
Table 15. Existing and revised contracted quantity of NG by IOCL

  Page 27 
On the basis of the above mentioned table it’s been evident that IOCL is having spare capacity of
0.1500+1.74 MMSCMD available for CGD operations (on ad-hoc basis).

5.3 METHODOLOGY FOR CALCULATION OF POTENTIAL NG DEMAND

The potential industrial NG demand for year 2012-13 is taken from the report submitted to
IOCL by MDRA group out of which three scenarios were drawn having a switching over
pattern of 45-59%, 60-74% and 75-89% for pessimistic, realistic and optimistic scenarios
respectively.

The PNG demand is calculated from the Indane LPG sales in the respective towns and cities
which were extrapolated to the total sales in that city/town by the market share of Indane
LPG in respective town/city. The result thus procured is converted into the total LPG demand
after considering the fact that domestic LPG accounts for 96% of the total LPG consumption.
The figures thus obtained are converted into NG equivalent using conversion factors and total
PNG demand is calculated.

CNG demand in the city/town is calculated from the vehicular population profile of the city
and some statistics related to it (mileage, avg. daily distance travelled). The total CNG
demand is thus converted to NG to calculate the potential NG demand.

While determining the PNG and CNG demand the switching over pattern is taken constant (at
10% upto year 2012-13) to create parity amongst all the cities/towns considered in the study.

5.4 CRITERIA FOR CITY SELECTION

While total expected demand of NG can be one of the major benchmark for the selection of
town/city for CGD network establishment some other factors like current status in terms of
EOIs and State Govt. policies and moves can also play major role in making decision. On the
basis of the experiences of IGL and MGL a checklist is prepared covering most important
aspects of city town selection in addition to the expected NG demand.

S. No.  Selection Criteria 
1  Closeness to the proposed RLNG pipeline 
2  Administrative action by the state to promote NG in the city/town 
3  Total population of the city/town
4  Status of the city/town in terms of EOI to the PNGRB Board 
5  Existing LPG and CNG demand 
6  Infrastructure of the city/town 
7  Level of urbanization in the city/town
Table 16. Possible selection criteria for Cities/Towns for CGD network establishment

  Page 28 
CHAPTER 6: HARYANA (HRY)

6.1 INTRODUCTION

Located in northern part of India, Haryana emerged as a separate state in the federal galaxy of
the Indian Republic after being carved out of the state of Punjab on November 1,1966. With
just 1.37% of the total geographical area and less than 2% of India’s population, Haryana has
carved a place of distinction for itself during the past three decades. Today Haryana is among
the most prosperous states in India, having per-capita income of Rs 49038 at current prices
(Source: Economic Survey of Haryana, 2007-08) in the country. It is a leading manufacturing
hub as it is also home to Maruti Suzuki India Limited, India's largest automobile
manufacturer, and Hero Honda Limited, the world's largest manufacturer of two-wheelers.
Panipat, Panchkula and Faridabad are also industrial hubs, with the Panipat Refinery being
the second largest refinery in South Asia. There is also an established steel and textile
industry in the state of Haryana.

When it comes to financial health Haryana one among the three best performing states in the
country. Haryana had the minimum fiscal deficit of 0.6 per cent in financial year 2006-07.
Haryana tops the list in terms of per capita investment in the fiscal year 2007 with an
investment of Rs 1,86,045 crore. Ninety-three of top Fortune 100 companies already have
their corporate offices and production bases in Haryana. In 2006-07 Haryana received foreign
direct investment projects of over Rs 11,000 crore in the state and corporate sector.

Recently, Haryana has come up with New Industrial Policy (NIP) which is formulated for
generation of rapid industrialization and
jobs to the people of Haryana. As per the
data available Haryana is equipped with
682 new industrial units with an
investment of 230 crore.

Famous for its industries and its cultural

values, Haryana is one of the most
prolific and growing states of India. The
fact file of Haryana and its growth
statistics corroborates the claims ade by
the Haryana Govt. Development of
Industrial estates like Precision Tools
Complex at Rohtak, Footwear Park at
Bahadurgarh and Aparel Park at Barhi
(Sonipat) are some of the recent works
that account for the increased industrial
growth of the state.

When it comes to the demographic

picture of this prolific states than it
becomes mandatory to mention that the Figure 9. Haryana (Source: www.haryana.gov.in)
Haryana state is home for a population
of 21,082,989 as per the census data 2001 and recorded a growth of 28.06% between 1991-

  Page 29 
2001 as compared to 21.34% of the national average during the same period. The sex ratio
(number of females per 100 males) declined to 861 from 865 as at the 1991 census. Total
literacy rate has increased from 55.85% to 68.59% in 2001 census.

As per the census total slum population stood as 1420407 and the urban population came out
as 6115304. In terms of fuel usage 1067110 houses use LPG as cooking fuel which is next to
firewood (110529 houses).

The principal cities of Haryana Include names of Faridabad, Panipat, Rohtak, Hisar, Sonipat,
Karnal Yamunanagar, Gurgaon, Bhiwani and Sirsa out of which Faridabad claims of the most
populated city and Panipat and Sonipat stands at third and fifth positions respectively.
Considering the economic and population status of Panipat and Sonipat and the distance
between the spurline and cities they have been selected for the demand estimation of NG in
them.

6.2 PANIPAT

The District is situated 90 km from Delhi (NH-1) on Sher Shah Suri Marg and have
significant place in history of
India. Panipat district was once a
part of district Karnal till 31
October 1989 but then upgraded as
a separate district including
Assandh tehsil of district Karnal. It
was reformed on January 1, 1992
and this time Assandh tehsil was
excluded from the district. Panipat
city is also famous as “City of
weavers” and it has a significant
place in international market for
handloom production. Darri,
carpet mat, table cover, bed sheet,
bed cover curtain etc. produced in
panipat are exported to Canada,
Figure 10. District map of Panipat
Japan, Germany and Australia.

The area of Panipat district is 1268 sq. km. and the total population of the district as per
census 2001 was 967,449 out of which male population accounted for 54% of the total
population. In terms of Agriculture, Panipat district boasts of an agricultural land of
2,664,398 hectare out of which 26,000 hectare of land is cultivated through canal while
77,124 hectare of land is cultivated through tubewell. Panipat district has 25,000 units of
Hand looms and 40,000 units of Pit looms. The total number of Small Industrial Units (SMIs)
in Panipat district was found as 2,899 and 37 large and medium Industrial Units are registered
in Panipat district. Some other Industries which are found in Panipat district are Power loom,
Shoddy spinning Unit, Carpet Industries, Open End Spinning Units, Barrack Yarn spinning
units, Carpet Spinning Units, Pickle Unit, Dying/printing Unit, Weaver Service Centre and
NITRA Lab & Training centre.

  Page 30 
The areas developed for Industry in Panipat are as under:

S.No.  Name of Estate  No. of total plots 

1  Industrial Area, Panipat 238
2  Sector 25, HUDA. P‐I, Panipat  162 
3  Sector 25, HUDA, P‐II, Panipat  519 
4  Sector 29, HUDA. P‐I, Panipat  277 
5  Sector 29, HUDA. P‐II, Panipat 670
6  HSIDC, Samalkha  77 
Table 17. Industrial estates of Panipat (source: panipat.nic.in)

6.2.1 Panipat Refinery

Located 20 km from the town of Panipat amidst lush emerald fields, India’s most modern
refinery, IOC Panipat Refinery, is located with a capacity of 12 MMTPA. Panipat refinery
was built at a cost of 3,868 crore and fulfils the long felt needs to meet the petroleum demand
of not only Haryana but also the entire north-west of India including Punjab and the states of
Jammu and Kashmir. The best part of the refinery is its ability to control the effluent
discharge rate and keeping it close to zero mark. The refinery has also made significant
contribution in social welfare of the people of Panipat by establishing a township close to
Panipat refinery and hence upgraded the standard of living by making consistent efforts to
raise the bar.

6.2.2 Demand estimation for Industrial Consumers in Panipat District

As per the results of the study carried out by MDRA (Marketing and Development Research
Associate) on behalf of Indian Oil Corp. the total estimated industrial demand for Panipat
district in year 2012-13 stands for 1.3456 MMSCMD of NG out of which three scenarios
(Pessimistic, Real, Optimistic) were predicted. The picture below describes the distribution of
projected industrial demand for 2012-13 presented by the MDRA group.

Figure 11.Estimated industrial demand distribution of NG for Panipat district (Source: MDRA
report)

  Page 31 
The above mentioned figure clearly states that Gohana Road Ind. Area is going to have
maximum demand of natural gas in the coming future. After that Asan Ind. Area and Madana
Ind. Area stands for the maximum NG demand potential. The projected demand under
different demand scenarios is :

Scenario Projected NG demand for 2012-13 (in SCMD)

Pessimistic 645911
Realistic 847758 
Optimistic 1049605 
In the above mentioned scenarios, the conversion rate is calculated as:

• Pessimistic Scenario: 45-59% of total estimated demand projection

• Realistic Scenario: 60-74% of total estimated demand projection
• Optimistic Scenario: 75-89% of total estimated demand projection

Out of the above mentioned scenarios the pessimistic scenario predicts the most likely
demand figures for NG in which National Fertilizer Ltd (NFL) acts as a major contributor to
the estimated industrial demand of Panipat district.

6.2.3 PNG demand estimation for Panipat City

No. of existing customers for Indane  69937 
Sale of Indane LPG in last one year (in MT)  9814.427 
Per capita consumption  140.3324
Market share of Indane In LPG business (in %)  50 
Total domestic LPG demand  in one year  19628.85 
Total LPG demand in Panipat City8  20446.72
Total demand of NG in SCMD (1 MT LPG= 1250 SCM NG)  70023.00952 
Total demand of NG for PNG supply (in MMSCMD)  0.070023009 
Expected contribution upto 2012‐13 @10%  0.007002301 
Table 18. Estimated PNG demand for Panipat City

6.2.4 CNG demand estimation for Panipat city

Type of  No. of  Daily  average  Mileage  Total  Total  Expected 
vehicle  Vehicle  dist.  Covered  (in  consumption  consumption  of  contribution 
by  vehicle  (in  km/kg)  of  CNG  in  kg  NG in SCMD (1kg  upto  2012‐
km)  per year9   CNG=1.28  SCM  13 @ 10% in 
  of NG)  SCMD 
Bus  ‐‐‐‐‐‐  300  4  ‐‐‐‐‐‐‐‐‐  ‐‐‐‐‐‐‐‐‐‐  ‐‐‐‐‐‐‐‐‐‐ 
3‐wheeler  ‐‐‐‐‐‐‐  100  40  ‐‐‐‐‐‐‐‐  ‐‐‐‐‐‐‐‐‐‐‐  ‐‐‐‐‐‐‐‐‐ 
4‐wheeler  ‐‐‐‐‐‐‐  100  21 ‐‐‐‐‐‐‐‐‐‐ ‐‐‐‐‐‐‐‐‐‐‐ ‐‐‐‐‐‐‐‐‐
Total  ‐‐‐‐‐‐‐‐           
Table 19. Estimated CNG demand for Panipat city

8
The total LPG demand in Panipat city is calculated by considering that domestic LPG demand accounts for
96% of the total LPG demand.
9
[(daily avg dist/mileage)*365*no. of vehicle]

  Page 32 
6.3 SONEPAT

Sonepat, located in the south-eastern part of Haryana, came into existence in 1972. Formerly
Sonepat was a part of Rohtak district. The number of sub-divisions of Sonepat is three. They
are Sonipat, Ganaur and Gohana. Among which Sonepat is the largest Tehsil. The town of
Sonipat acts as the district headquarter. The total area of Sonepat is 2,13,080 hectare.

According to the census of 2001, the total population of Sonepat is 12, 78,830, among which
6, 95, 314 are male and 5, 83, 516 female. About 75 % of total population of Sonepat belongs
to the rural part of it while only 25% of the population is considered urban. The major towns
of the Sonepat districts are Sonepat, Kharkoda, Gannaur and Gohana which accounts for
about 25% of the total urban population of the whole Sonepat district. The primary activity of
the people of Sonepat is agriculture.

On the front of industrial growth Sonepat is like a mixed bag of industries. With the
development of HSIIDC in Kundli the industrial growth of Sonepat is supposed to shoot up
in the coming years. Out of the major developing areas of Haryana Sonepat have a special
potential for accelerated socio-economic development.

6.3.1 Industrial demand estimation of NG in Sonepat district

As per the results of the study carried out by MDRA (Marketing & Development Research
Associate) on behalf of Indian Oil Corp. the total estimated industrial demand for Sonepat
district in year 2012-13 stands at 0.427427 MMSCMD of NG out of which three scenarios
(Pessimistic, Real, Optimistic) were predicted which states that the demand will touch the
mark of 0.269278 MMSCMD as per the realistic scenario. The picture below describes the
distribution of projected industrial demand for 2012-13 presented by the MDRA group.

Figure 12. Estimated Industrial demand Distribution of NG in Sonepat District (Source MDRA
Report)

  Page 33 
Out of the above mentioned demand three different scenarios were projected in which the
overall Industrial demand came out as:

Scenario  Projected NG demand for 2012‐13 (in SCMD) 
Pessimistic  205164 
Realistic  269278
Optimistic  333394 

The above table shows a demand of 0.2051 MMSCMD, 0.2692 MMSCMD and 0.3334
MMSCMD of NG in the Pessimistic, Realistic and Optimistic scenarios out of which realistic
figures predict the most likely demand of NG in year 2012-13. The major contributors to the
expected industrial demand of NG are Fresh and Healthy Enterprise Ltd, Avtar Steels Pvt.
Ltd and Bush Foods Pvt. Ltd.

6.3.2 PNG demand estimation for Sonepat City

No. of existing customers for Indane  50035 
Sale of Indane LPG in last one year (in MT)  5238.668 
Per capita consumption  104.7001
Market share of Indane In LPG business (in %)  50 
Total domestic LPG demand  in one year  10477.34 
Total LPG demand in Sonepat City  10913.9 
Total demand of NG in SCMD (1 MT LPG= 1250 SCM NG) 37376.35274 
Total demand of NG for PNG supply (in MMSCMD)  0.037376353 
Expected contribution upto 2012‐13 @10%  0.003737635 
Table 20. Estimated PNG demand for Sonepat City

6.3.3 CNG demand estimation for Sonepat city

Type of  No. of  Daily  Mileage  (in  Total  Total  Expected 
vehicle  Vehicle  average  km/kg)  consumption  consumption  contribution 
dist.  of  NG  in 
of  CNG  in  kg  upto  2012‐
Covered  by  per year   SCMD  (1kg  13 @ 10% in 
vehicle  (in    CNG=1.28  SCMD 
km)  SCM of NG) 
Bus  525  300  4 14371875 50400 5040 
3‐wheeler  3646  100  40  3326975  11667.2  1166.72 
4‐wheeler  7881  100  21  13697928.57  48036.571  4803.657 
Total  12052        110103.771  11010.377 
Table 21. Estimated CNG demand for Sonepat city

  Page 34 
CHAPTER 7: UTTAR PRADESH (U.P.)

7.1 INTRODUCTION

Uttar Pradesh also called as

U.P. is a state located in the
northern part of India. With
over 160 million people (as
per census 2001), it is India's
most populous state. Uttar
Pradesh covers an area of
236286 sq km with 70
districts and 631 cities. Out of
its 166052859 population
52% of the population
belongs to male section of the
society while 48% of females
are registered in the overall
picture of the state
population.

Uttar Pradesh consists of 183100 km of road network and 8152 km of railways network.
Main industries in U.P. are Cement, Vegetable oils, textiles, Cotton Yarn, Sugar, Jute, Lock
& Scissors, Carpet, Brasswares, Glasswares and Bangles. Uttar Pradesh covers a large part
of the highly fertile and densely populated upper Gangetic plain and shares an international
border with Nepal. It is also bounded by the Indian states of Uttarakhand, Himachal Pradesh,
Haryana, Delhi, Rajasthan, Madhya Pradesh, Chhattisgarh, Jharkhand and Bihar. Its major
cities include the names of Agra, Alahabad, Bareily, Ghaziabad, Gorakhpur, Jhansi, Kanpur,
Lucknow, Mathura, Merut, Moradabad, NOIDA and Varanasi while the other important
cities include the names of Kanpur, Aligarh, Azamgarh, Bahraich, Ballia, Banda, Barabanki,
Bijnor, Bulandshahr, Deoband, Etawah, Faizabad, Farrukhabad, Fatehghar, Firozabad,
Ghazipur, Gola, Gonda, Gorakhpur, Hameerpur, Kannauj, Khurja, Kushinagar, Lalitpur,
Mainpuri, Mirzapur, Moradabad, Muzaffarnagar, Noida, Orai, Pilibhit, Raebareli, Rampur,
Saharanpur, Shahjahanpur and Sultanpur.

7.2 BAGHPAT

Baghpat district is spread in an area of 1321 sq. km and lies in the east of Sonepat. It is also
the transit point for the proposed pipeline between Haryana and Uttar Pradesh. The main
commercial activity of the people living in this region is making and selling GUD and Sugar.
Apart from this, there are certain units who are involved in the making of shoes and
agricultural equipments. About 75% of its units are cottage units and produce Handloom
cloth.

  Page 35 
According to the current statistical figures there are about 200 handlooms and powerlooms
unit in Khekra Tehsil which mainly produce Rugs, Bed sheets, Bed-covers etc. All these units
export their products to Europian countries but lack in basic infrastructure which in turn
hampers the production capacity of these looms.

The population of Baghpat district is 1164000 (as per census 2001) and the population
density of Baghpat is 742 per sq km. from demand potential view Khekra and nearby
Dhundera industrial area may come out as two promising industrial clusters but considering
the major push towards the loom sector the demand of NG may not shoot up in the coming
years in Baghpat District as compared with other districts of Uttar Pradesh.

7.2.1 Industrial demand estimation of NG in Baghpat district

As per MDRA report submitted to IOCL the total industrial demand of NG in Baghpat
district stan35599 SCMD or 0.0356 MMSCMD which is quite lower than the demand
calculated for the districts of Haryana. The distribution of NG demand for year 2012-13 in
Baghpat district is shown in the picture below:

Figure 13. Estimated Industrial demand distribution of NG in Baghpat district in year 2012-13
(Source: MDRA report)

The demand for three different demand scenarios stands at:

Scenario  Projected NG demand for 2012‐13 (in SCMD) 
Pessimistic  17448 
Realistic  22900 
Optimistic  28353

  Page 36 
The major contributors to the expected demand of NG in Baghpat district are Si-Al SBEC
Bionergy Ltd. and Baghpat Co-operative Sugar Mill Ltd. with an estimated demand of
965144 SCMD and 501875 SCMD respectively.

7.2.2 PNG demand estimation for Baghpat City

No. of existing customers for Indane  11141 
Sale of Indane LPG in last one year (in MT)  1423.351 
Per capita consumption  127.7579
Market share of Indane In LPG business (in %)  60 
Total domestic LPG demand  in one year  2372.251 
Total LPG demand in Baghpat City  2471.094 
Total demand of NG in SCMD (1 MT LPG= 1250 SCM NG) 8462.651
Total demand of NG for PNG supply (in MMSCMD)  0.008462651 
Expected contribution upto 2012‐13 @10%  0.0008463 
Table 22. Estimated PNG demand for Baghpat city

7.2.3 CNG demand estimation for Baghpat city

Type of No. of Daily Mileage (in Total Total Expected
vehicle Vehicle average km/kg) consumption consumption contribution
dist. of CNG in of NG in upto 2012-
Covered by kg per year SCMD (1kg 13 @ 10%
vehicle (in CNG=1.28
km) SCM of
NG)
Bus  200  300  4  5475000  19200  1920 
3‐wheeler  100  100  40  91250  320  32 
4‐wheeler  200  100  21  347619.0476 1219.047  121.9047 
Total  2300    5913869.048 20739.047  2073.9047
Table 23. Estimated CNG demand for Baghpat city

7.2.4 PNG demand estimation for Baraut town

No. of existing customers for Indane  29920 
Sale of Indane LPG in last one year (in MT)  2719.243 
Per capita consumption  90.88379
Market share of Indane In LPG business (in %) 60
Total domestic LPG demand  in one year  5302.563 
Total LPG demand in Baghpat City  5523.503 
Total demand of NG in SCMD (1 MT LPG= 1250 SCM NG) 18916.10616 
Total demand of NG for PNG supply (in MMSCMD)  0.01891610616 
Expected contribution upto 2012‐13 @10%  0.001891610616 
Table 24. Estimated PNG demand for Baraut town

  Page 37 
7.2.5 CNG demand for Baraut town
Type of No. of Daily Mileage (in Total Total Expected
vehicle Vehicle average km/kg) consumption consumption contribution
dist. of CNG in of NG in upto 2012-
Covered by kg per year SCMD (1kg 13 @ 10%
vehicle (in CNG=1.28
km) SCM of
NG)
Bus  100  300  4  2737500  9600  960 
3‐wheeler  50  100  40 45625 160 16 
4‐wheeler  3000  100  21  5214285.714 18285.714  1828.5714 
Total  3300      7997410.714 28045.714  2804.5714 
Table 25. Estimated CNG demand for baraut town

7.3 MEERUT

Meerut district is located 72 km North-east of Delhi. It is spread across an area of 3,911 sq

km and has a population of 1,074,229 (as per census 2001). Meerut district is famous for
sports goods, musical instruments and Sugar industry. It is one of the principal cities of Uttar
Pradesh. It is also known as sports capital of India and due to its close proximity to Delhi it is
experiencing a rapid growth in all the sectors. Total population of commercial establishment
in Meerut comes out more than 500.

Meerut has also developed its base in handloom and powerlooms as well. The district has
also established considerable amount of industries including manufacturing, smelting, rubber,
paper, metal, engineering, handicrafts and milling of sugar, cotton, flour and oilseeds.

When it comes to petroleum products consumption Meerut figures very low because of the
unavailability of heavy major industries. The major industries available in Meerut accounts
for Sugar and Gur manufacturing unit which produce the required electricity from its own
byproduct Bagasse.

Meerut Urban Agglomeration which includes Meerut Cantonment area too has a population
of 1161716.and claims for the most populated cities of Meerut district

7.3.1 Industrial demand estimation of NG in Meerut district

As per MDRA Industrial Demand Analysis Report the total industrial demand of NG for
Meerut district stands at 82086.85 SCMD which is 0.082086 MMSCMD. The distribution of
NG in different demand centre is shown in the figure below mentioned;

  Page 38 
Figure 14.Estimated industrial demand distribution of NG for Meerut district (Source: MDRA report)

The industrial NG demand as per the three predicted scenario stands as:

Scenario Total expected Industrial demand of NG (2012-

13) in SCMD
Pessimistic 39401.685
Realistic 51714.71
Optimistic 64027.74

The above shown figures give a brief idea of the industrial demand of NG in year 2012-13 as
per different switch-over ratios and the realistic scenario gives a figure of 0.05 MMSCMD
for Meerut district which is not so encouraging. The major contributors to the NG demand in
Meerut are UP State Sugar Corporation and Mayur Textiles Processors with a demand of
1082517 and 21233 SCMD respectively.

7.3.2 PNG demand estimation for Meerut City

No. of existing customers for Indane  185293 
Sale of Indane LPG in last one year (in MT)  21197.248 
Per capita consumption  114.3985
Market share of Indane In LPG business (in %)  60 
Total domestic LPG demand  in one year  35328.75 
Total LPG demand in Meerut City  36800.78 
Total demand of NG in SCMD (1 MT LPG= 1250 SCM NG) 126030.0719 
Total demand of NG for PNG supply (in MMSCMD)  0.126030072 
Expected contribution upto 2012‐13 @10%  0.0126030072 
Table 26. Estimated PNG demand for Meerut city

  Page 39 
7.3.3 CNG demand estimation for Meerut city
Type of  No. of  Daily  Mileage  (in  Total  Total  Expected 
vehicle  Vehicle  average  km/kg)  consumption  consumption  contribution 
dist.  of  NG  in 
of  CNG  in  kg  upto  2012‐
Covered  by  per year   SCMD  (1kg  13 @ 10% 
vehicle  (in    CNG=1.28 
km)  SCM of NG) 
Bus  3150  300  4  86231250  302400  30240 
3‐wheeler  2856  100  40  2606100  9139.2  913.92 
4‐wheeler  27435  100  21 47684642.86 167222.85  16722.285
Total  33441      136521992.9  478762.05  47876.205 
Table 27. Estimated CNG demand for Meerut city

7.4 GHAZIABAD

Ghaziabad, declared as a district in year 1976 and is one of the most important districts of
Uttar Pradesh. The major reason for being boastful is the development of industries in it
which ranges from Iron and steel industries to food processing and Automobile parts. The
population as per census 2001 stands at 3290256 and is still increasing due to the increasing
rate of employment.

The major contributing factors to the increasing population of Ghaziabad are its closeness to
the national capital (it is the part of NCR) and the Industrial Policy of Delhi state which
restricted the growth of heavy and medium industries to control pollution. All this contributed
to the ever growing industries in Ghaziabad District.

According to the Census 2001, the urban population of Ghaziabad district is higher than the
rural population and the population growth that has been registered in the time period
between 1991-2001 is 47.47%. Out of the major towns Ghaziabad (M. Corp.) is the most
populated town with the maximum exposure to the industries. The total population of the
Ghaziabad town as registered in census 2001 stands at 968256 which is phenomenal.

7.4.1 Industrial demand estimation of NG in Ghaziabad district

The total demand of NG in Ghaziabad district (as per MDRA report) stood at a level of
1.172616 MMSCMD and the distribution of NG demand in different demand centers is
shown in the picture below:

  Page 40 
Figure 15. .Estimated industrial demand distribution of NG for Ghaziabad district (Source: MDRA
report)

The above shown picture also illustrates the probable NG demand for the upcoming industrial
areas. Out of the above mentioned demand centers Sahibabad Site IV Ind. Area and South
GT Road Ind. Area may prove out to be the best pick. Rathi Thermex Super and Modi
Industries Ltd. are the major promoters of the expected NG demand in Ghaziabad district
with a potential of 84880 and 61000 MMSCMD respectively.

The probable NG demand as per the three scenarios is:

Scenario  Total expected Industrial demand of NG (2012‐
13) in SCMD 
Pessimistic  562856 
Realistic  738748 
Optimistic  914642 

7.4.2 PNG demand estimation for Ghaziabad City

No. of existing customers for Indane 261537
Sale of Indane LPG in last one year (in MT)  39989.472 
Per capita consumption  152.9018 
Market share of Indane In LPG business (in %)  60 
Total domestic LPG demand  in one year 66649.12
Total LPG demand in Ghaziabad City  69426.17 
Total demand of NG in SCMD (1 MT LPG= 1250 SCM NG)  237760.8445 
Total demand of NG for PNG supply (in MMSCMD)  0.2377608445 
Expected contribution upto 2012‐13 @10% (in MMSCMD) 0.0237760845 
Table 28. Estimated PNG demand for Meerut city

  Page 41 
7.4.3 CNG demand estimation for Ghaziabad city
Type of  No. of  Daily  Mileage (in  Total  Total  Expected 
vehicle  Vehicle  average  km/kg)  consumption  consumption  contribution 
dist.  of CNG in kg  of  NG  in  upto  2012‐
Covered  by  per year   SCMD  (1kg  13 @ 10% 
vehicle  (in    CNG=1.28 
km)  SCM of NG) 
Bus  7228  300  4  197866500  693888  69388.8 
3‐wheeler  11165  100  40  10188062.5  35728  3572.8 
4‐wheeler  50479  100  21 87737309.52 307681.523  30768.1523
Total  68872        1037297.523  103729.7523
Table 29. Estimated CNG demand for Meerut city

7.5 GAUTAM BUDH NAGAR

Gautam Budh Nagar is a district of Uttar Pradesh in northern India. Noida is the
administrative headquarter of the district and the part of NCR too. It is spread in an area of
1354 sq km. the total population of Gautam Budh Nagar as per census 2001 is 1202030 in
which male population accounts for 54% of the total population.

The importance of Gautam Budh Nagar is due to its inclusion in the proposed Delhi-Mumbai
Industrial corridor. The growth of industries in the district has been such that I is not
restricting itself to the earlier designated industrial area of Noida further industrial areas like
Greater Noida and Taj Expressway Ind. Area are developed.

Noida is among the principal agglomerations of Uttar Pradesh state. As per the published
statistics Gautam Budh Nagar district boasts of 6218 Small Scale Industrial (SSI) units with
an investment of 2315 crore. Till date there are around 302 High Investment Projects in the
district and many of them are either functioning or about to start production in coming five
years.

7.5.1 Industrial demand estimation of NG in G. B. Nagar district

Total expected Industrial demand of NG in G. B. Nagar district for year 2012-13 stands at
6.537308 MMSCMD which is quite higher. The distribution of industrial NG demand in G.
B. Nagar district is shown below:

  Page 42 
Figure16.Estimated industrial demand distribution of NG for G.B. Nagar district (Source: MDRA
report)

The demand for different scenarios come out as:

Scenario  Total expected Industrial demand of NG (2012‐
13) in SCMD 
Pessimistic  3137908 
Realistic  4118504 
Optimistic  5099100

Gautam Budha Nagar consists of three big industrial areas- Noida, greater Noida and Dadri.
All of these have become destination for huge investments by MNCs. Dadri also incorporates
NTPC which has huge requirement of energy for power generation.

7.5.2 PNG demand estimation for Noida

No. of existing customers for Indane  52338 
Sale of Indane LPG in last one year (in MT)  7305.729 
Per capita consumption  139.5875
Market share of Indane In LPG business (in %)  60 
Total domestic LPG demand  in one year  12176.22 
Total LPG demand in Noida   12683.56
Total demand of NG in SCMD (1 MT LPG= 1250 SCM NG) 43436.86788 
Total demand of NG for PNG supply (in MMSCMD)  0.0434368678 
Expected contribution upto 2012‐13 @10% (in MMSCMD)  0.00434368678 
Table 30.Estimated PNG demand for Noida

  Page 43 
7.5.3 CNG demand estimation for Noida
Type of  No. of  Daily  Mileage  (in  Total  Total  Expected 
vehicle  Vehicle  average  km/kg)  consumption  consumption  contribution 
dist.  of CNG in kg  of  NG  in  upto  2012‐
Covered  by  per year   SCMD  (1kg  13 @ 10% 
vehicle  (in    CNG=1.28 
km)  SCM of NG) 
Bus  3158  300  4  86450250  303168  30316.8 
3‐wheeler  484  100  40 441650 1548.8 154.88
4‐wheeler  2754  100  21 4786714.286 16786.285  1678.6285
Total  6396        321503.085  32150.3085 
Table 31. Estimated CNG demand for Noida

7.6 BULANDSHAHR

District of Bulandshahr is situated between 28.4 degrees south and 28.0 degrees north latitude
and between 77.0 degrees and 78.00 degree longitude. The district is about 84 km in length
and 62 km in breadth. The geographical area of the district is around 4353 sq km.

As per census 2001 the total population of Bulandshahr district is 2,913,122 out of which
male population accounts for 53% while female population accounts for 47% of the total
population. The major towns of Bulandshahr district are Bulandshahr City and Khurja having
population of 176,425 and 98,610 respectively. Out of the total households of Bulandshahr
district 71.8 % of Households are of permanent status.

The cities of Bulandshahr are dominated by agricultural practices and does not reflect (except
Sikandarabad) very high industrial growth. There are mainly small, tiny cottage and
handicraft units are spread across the district.

7.6.1 Industrial demand estimation of NG in Bulandshahr district

Total estimated industrial
demand of NG in Bulandshahr
district stands at 0.137954
MMSCMD. The distribution of
Industrial NG demand in the
district is mentioned in the
picture.

The demand estimation as per the

pessimistic, realistic and
optimistic scenario is given in the
table below;

Figure 17. Estimated industrial demand distribution of NG in

Bulandshahr district (Source: MDRA report)

  Page 44 
Scenario  Total expected Industrial demand of NG (2012‐
13) in SCMD 
Pessimistic  96316.28 
Realistic  126415.1
Optimistic  156514 

The major contributors in the estimated industrial demand of NG in Bulandshahr district are
Orient Ceramics and Industries Ltd and U.P. Twiga Fiber Glass Ltd. having a demand of
60,786 and 24,142 SCMD.

7.6.2 PNG demand estimation for Bulandhahr city

No. of existing customers for Indane  25130 
Sale of Indane LPG in last one year (in MT) 3181.538
Per capita consumption  126.6032 
Market share of Indane In LPG business (in %)  60 
Total domestic LPG demand  in one year  5302.563 
Total LPG demand in Bulandshahr city 5523.503
Total demand of NG in SCMD (1 MT LPG= 1250 SCM NG)  18916.10616 
Total demand of NG for PNG supply (in MMSCMD)  0.018916106 
Expected contribution upto 2012‐13 @10% (in MMSCMD)  0.001891611 
Table 32. Estimated PNG demand for Bulandshahr city

7.6.3 CNG demand estimation for Bulandshahr city

Type of  No. of  Daily  Mileage  (in  Total  Total  Expected 
vehicle  Vehicle  average  km/kg)  consumption  consumption  contribution 
dist.  of CNG in kg  of  NG  in  upto  2012‐
Covered  by  per year   SCMD  (1kg  13 @ 10% 
vehicle  (in    CNG=1.28 
km)  SCM of NG) 
Bus  ‐‐‐‐‐‐‐‐‐‐‐  300  4  ‐‐‐‐‐‐‐‐‐‐  ‐‐‐‐‐‐‐‐‐‐‐  ‐‐‐‐‐‐‐‐‐‐‐ 
3‐wheeler  ‐‐‐‐‐‐‐‐‐  100  40  ‐‐‐‐‐‐‐  ‐‐‐‐‐‐‐‐  ‐‐‐‐‐‐‐‐‐‐ 
4‐wheeler  ‐‐‐‐‐‐‐‐‐‐  100  21 ‐‐‐‐‐‐‐‐‐‐ ‐‐‐‐‐‐‐‐‐‐  ‐‐‐‐‐‐‐‐‐‐‐
Total  ‐‐‐‐‐‐‐‐‐‐           
Table 33. Estimated CNG demand for Bulandshahr city

  Page 45 
CHAPTER 8: REGULATIONS

8.1 PETROLEUM & NATURAL GAS REGULATIONS BOARD (PNGRB) ACT

PNGRB act was enacted on 31st March 2006 to serve as a platform for the establishment of
Petroleum & Regulatory Board (PNGRB) to regulate the Midstream and downstream
operations (refining, processing, storage, transportation, distribution, marketing and sale) of
petroleum, petroleum products and natural gas. The PNGRB act was established to protect
the interest of consumers and entities engaged in specific activities relating to petroleum,
petroleum products and natural gas and to ensure uninterrupted and adequate supply of
petroleum, petroleum products and natural gas in all parts of the country and to promote
competitive markets and for matters connected therewith or incidental thereto.

The act provides the framework for the PNGRB Board by providing all essential elements of
a board ranging from the elementary definitions to the steps to authorizing an entity laying or
setting up a pipeline network. The PNGRB act also provides the structural framework of the
board and defines the powers associated with the board.

The PNGRB board thus formed falls under the purview of MoPNG and act as an independent
authority which acts as a watchdog for the entities engaged in any of the operations
mentioned above.

8.2 THE PNGRB BOARD

The PNGRB board came into action on 1st October, 2007 and as it has been prescribed by the
PNGRB act itself, the board came out with all the powers and duties associated to it. The
board came out with an objective of regulating the Refining, processing, storage,
transportation, distribution, marketing and sale of petroleum products, natural gas excluding
production of crude oil and natural gas so as to protect the interest of consumers and entities
engaged in specified activities and to ensure uninterrupted & adequate supply and to
promote competitive markets.

The board consists of a Chairperson, a Member (Legal) and three other members appointed
by the Central Government. The chairperson is awarded with powers such as the powers of
general superintendence and directions in the conduct of the affairs of the Board and in
addition to presiding over the meetings of the Board, exercise and discharge such other
powers and functions of the Board, as may be assigned to him by the Board.

8.2.1 Functions of the board

The functions of the board mentioned in the PNGRB act are as follows:

1. protect the interest of consumers by fostering fair trade and competition amongst the
entities;
2. register entities to-

  Page 46 
 • market notified petroleum and petroleum products and, subject to the
contractual obligations of the Central Government, natural gas;
• establish and operate liquefied natural gas terminals;
• establish storage facilities for petroleum, petroleum products or natural gas
exceeding such capacity as may be specified by regulations;
3. authorise entities to-
• build, operate or expand a common carrier or contract carrier;
• lay, build, operate or expand city or local natural gas distribution network;
4. declare pipelines as common carrier or contract carrier;
5. regulate, by regulations,-
• access to common carrier or contract carrier so as to ensure fair trade and
competition amongst entities and for that purpose specify pipeline access
code;
• transportation rates for common carrier or contract carrier;
• access to city or local natural gas distribution network so as to ensure fair trade
and competition amongst entities as per pipeline access code;
6. in respect of notified petroleum, petroleum products and natural gas-
• ensure adequate availability;
• ensure display of information about the maximum retail prices fixed by the
entity for consumers at retail outlets;
• monitor prices and take corrective measures to prevent restrictive trade
practice by the entities;
• secure equitable distribution for petroleum and petroleum products;
• provide, by regulations, and enforce, retail service obligations for retail outlets
and marketing service obligations for entities;
• monitor transportation rates and take corrective action to prevent restrictive
trade practice by the entities;
7. levy fees and other charges as determined by regulations;
8. maintain a data bank of information on activities relating to petroleum, petroleum
products and natural gas;
9. lay down, by regulations, the technical standards and specifications including safety
standards in activities relating to petroleum, petroleum products and natural gas,
including the construction and operation of pipeline and infrastructure projects related
to downstream petroleum and natural gas sector;
10. perform such other functions as may be entrusted to it by the Central Government to
carry out the provisions of PNGRB Act.

8.2.2 Powers of the board

Powers of the board mentioned in the PNGRB act are as follows:

1. The Board have jurisdiction to-

• adjudicate upon and decide any dispute or matter arising amongst entities or
between an entity and any other person on issues relating to refining,
processing, storage, transportation, distribution, marketing and sale of
petroleum, petroleum products and natural gas according to the provisions

  Page 47 
 mentioned in Chapter V of the PNGRB act, unless the parties have agreed for
arbitration;
• receive any complaint from any person and conduct any inquiry and
investigation connected with the activities relating to petroleum, petroleum
products and natural gas on contravention of-
i. retail service obligations;
ii. marketing service obligations
iii. display of retail price at retail outlets;
iv. terms and conditions subject to which a pipeline has been declared as
common carrier or contract carrier or access for other entities was
allowed to a city or local natural gas distribution network, or
authorisation has been granted to an entity for laying, building,
expanding or operating a pipeline as common carrier or contract carrier
or authorisation has been granted to an entity for laying, building,
expanding or operating a city or local natural gas distribution network;
v. any other provision of the PNGRB Act or the rules or the regulations
or orders made there under.
2. While deciding a complaint under sub-section (1) of the PNGRB act, the Board may
pass such orders and issue such directions as it deems fit or refer the matter for
investigation according to the provisions of Chapter V of the PNGRB act.

8.3 REGULATIONS FOR AUTHORIZING THE DEVELOPMENT OF CGD NETWORKS

These regulations are applicable to an entity which is laying, building, operating or

expanding, or which proposes to lay, build, operate or expand a city or local natural gas
distribution network (hereinafter referred to as CGD Network). The regulations also
introduce the fact that the consumers having NG requirement of less than 50,000 MMSCMD
will be supplied through the CGD network while the customers having requirement of
50,000-100,000 MMSCMD can be supplied through the CGD network or a separate NG
pipeline but customers with a requirement of more than 100,000 MMSCMD of NG will be
supplied by a separate NG pipeline only.

8.3.1 The Authorization process

Process  Time (in Days) 

EOI submission  0 

Preliminary assessment  15 

public consultation process  30 

invitation for bids  15 

  Page 48 
submission of application cum bid  60 + 3010 

grant of authorization  30 

Total number of days  150+30 
Table 34.The authorization process chart (Source: PNGRB notification 19th March, 2008)

In addition to the above mentioned process and timeline the entity is also supposed to get the
financial closure of the project from a bank or any other financial institution within a period
of 120 days of the grant of authorization. In case of internally financed project the entity
should submit the approval of its Board of Directors’ for the detailed feasibility report of the
project alongwith its financial plan within one hundred and twenty days of the authorization:
Provided that the Board may ask the entity to submit any further details or clarifications on
the financial closure.

8.3.2 Qualifying criteria for preliminary assessment

The board carries out a preliminary assessment of the EOIs with respect to the following
criteria:

1. Availability of NG.
2. Possible connectivity to an existing or proposed NG pipeline for supply of NG upto
the city gate of proposed CGD network, including LNG supply, tank wagons etc.
3. Any other relevant issue considered necessary by the board.

8.3.3 The Qualifying criteria for submission of application-cum-bid

The qualifying criteria for the submission of application cum bid for the development of
CGD network in a city is mentioned below:

A. Payment of application fee alongwith application-cum-bid (no need if paid earlier)

B. Technical capabilities

1. Entity should have laid HC pipeline of not less than 300 km on cumulative basis or
developed a CGD network in the past;
1. Shall have a joint venture (not less than 11% equity) with a technically capable firm having
experience of 300 km HC pipeline laying or development of CGD network;
2. Have intended to lay or build the CGD network on lump sum, turnkey or project management
basis through one or more technically competent firms which should have a prior experience
of laying not less than 300 km (on a cumulative basis) of HC pipeline or developed a CGD
network in the past; or
3. Or it should have at least three technically qualified personnel on its permanent rolls having
experience of not less than one year in:

10
If only a single bid is received in response of original advertisement published by PNGRB board.

  Page 49 
 • ROW acquisition and clearance.
• Design and acquisition of HC pipeline project.
• Pre-commissioning including hydro-testing and restoring.
• Safety of HC pipeline and installations.
4. Entity should be technically capable of operating & maintaining a CGD network as per
criteria namely:
• At least one year experience in operation and maintenance of a CGD network;
• Shall have a joint venture (not less than 11% equity) with a technically capable firm
having experience of not less than 1 year in operations and maintenance of a CGD
network;
• Entity intends to operate and maintain the proposed CGD network through an
appropriate technical assistance agreement for a period of at least one year with
another party having experience of at least one year in operations and maintenance of
a CGD network; or
• Entity has an adequate number of technically qualified personnel with experience in
commissioning, and operation and maintenance (O&M) of hydrocarbon pipelines and
also has a credible plan to independently undertake the O&M activities for a CGD
project on a standalone basis. It should have at least three technically qualified
personnel on its permanent rolls having experience of not less than one year in:
I. Commissioning of HC pipeline
II. Operations and Maintenance of NG pipeline and NG installations including
gas compressors.
III. Commercial issues including gas pricing, gas measurement accounting,
billing & collection.
IV. Safety of NG infrastructure.
C. The entity should meet the financial criterion mentioned in draft issued by PNGRB Board.

D. The companies must be registered under Companies Act-1956 and if it is not; than it shall
become a registered company under the act mentioned above.

E. The entity shall furnish a bid bond for an amount equal to:
• Rupees 50 million for a population of 5 million and subsequently higher for the
proportionate higher value of population.
• Rupees 30 million for a population of 1 million or more but less than 5 million.
• Rupees 20 million for a population of .5 million or more but less than 1 million.
• Rupees 15 million for a population of .25 million or more but less than .5 million.
• Rupees 10 million for a population of .1million or more but less than .25 million.
• Rupees 5 million for a population less than .1 million.
F. The entity should not have been imposed by any penalty under section 28 or chapter 9 of the
PNGRB act.

The bid bond mentioned above is-

• Encashed if an entity submitting the bid walks out.

• Released in case of the unsuccessful entity submitting the bid.
• Retained till the prescribed performance bond is furnished at the time of authorization
by the successful bidder.

  Page 50 
8.3.4 Bidding Criteria
The board has specified the areas of concern on the basis of which it identifies the best entity
for authorizing of CGD network. The points on which substantial emphasis is given thus act
as benchmark for evaluating the financial bids of the interested entities.

Bidding criteria  Weight assigned 
Lowness of the present value of the overall unit  40% 
network tariff for usage of the proposed CGD network 
by all categories of customers of natural gas 
(including supply of natural gas to online compressor 
for CNG) over the economic life of the CGD network 
project. 
Lowness  of  the  present  value  of  the  compression  10% 
charge for CNG for dispensing in the CNG stations in 
the proposed CGD network over the economic life of 
the project. 
Highness of the present value of the inch kilometer of  20% 
steel pipelines proposed to be laid in the CGD 
network during the period of exclusivity in terms of 
an exemption from the purview of the common 
carrier or contract carrier as specified in the 
Petroleum and Natural Gas Regulatory Board 
(Exclusivity for City or Local Natural Gas Distribution 
Networks) Regulations, 2008. 
Highness of the present value of the number of  30% 
domestic customers proposed to be connected by 
PNG by the entity during the period of exclusivity in 
terms of an exemption from the purview of common 
carrier or contract carrier as specified in the 
Petroleum and Natural Gas Regulatory Board 
(Exclusivity for City or Local Natural Gas Distribution 
Networks) Regulations, 2008. 
Total  100% 

On the basis of above mentioned criterion points the score for each participating entity is
calculated which highly depends on the weight assigned to each of the above mentioned
criteria. Entity with highest composite score is declared successful in the bid.

The grant of authorization is issued to the selected identity after it furnishes a performance
bond of an amount equal to:

• rupees one hundred million or five percent of the estimated project capital cost,
whichever is higher in respect of an authorized area with a population of five million
or more;
• rupees sixty million or five percent of the estimated project capital cost, whichever is
higher in respect of an authorized area with a population of one million or more but
less than five million;

  Page 51 
 • rupees forty million or five percent of the estimated project capital cost, whichever is
higher in respect of an authorized area with a population of half a million or more but
less than one million;
• rupees thirty million or five percent of the estimated project capital cost, whichever is
higher in respect of an authorized area with a population of quarter of a million or
more but less than half a million;
• rupees twenty million or five percent of the estimated project capital cost, whichever
is higher in respect of an authorized area with a population of one-tenth of a million or
more but less than quarter of a million;
• rupees ten million or five percent of the estimated project capital cost, whichever is
higher in respect of an authorized area with a population less than one-tenth of a
million.

Considering the basis of the performance bond it has been considered that that the
performance bond shall be revised by applying the above mentioned basis in case of
experiencing any change in the estimated cost project on completion of financial closure.

The rationale behind the introduction of this performance bond is to guarantee the timely
performance by the selected entity so that it would meet the targets and service obligations as
desired by the PNGRB board.

8.3.5 Pre and post commissioning activities

There are certain obligations which are imposed on the selected entities by the PNGRB board
in an order to protect the interest of consumers of NG. Some of the mandatory clauses which
provide the guidelines regarding the transfer of grant of authorization obtained by the entity
and submission of financial approval are as follows:

• The entity should achieve a firm natural gas contract with its supplier in a transparent
manner on the principal of “at an arm’s length” for a period equal to or more than its
exclusivity period within 90 days of authorization. The volume of the gas supply
under the agreement should be equal to at least 50% of the volumes considered for
defining the network tariff bid for each year of the exclusivity period.
• The grant of authorization to the entity cannot be renunciated by way of sale,
assignment, transfer or surrender to any other person or entity during the period of 3
years by the date of its issue.

The pre-commissioning activities/obligations of authorized entity includes submission of

progress report on quarterly basis including clearances obtained, targets achieved,
expenditure incurred, work in progress etc. The pre-commissioning activities also include the
compliance of entity to the relevant regulations for technical standards and specifications
regarding health and safety concerns to ensure smooth commissioning and operation of CGD
network. The board also monitor the progress of entity in achieving various targets with
respect to the CGD network project and can provide remedial action in case of any deviations
or shortfall from the mentioned targets.

Service obligations for the entity with respect to the PNG and CNG supply are as follows:

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 • The entity may take an interest-free refundable security deposit from domestic PNG
Customer towards security of the equipments (riser isolation valve before the
metering unit; ten meters of pipe up to the metering unit; metering unit; five meters of
pipe or tube from the metering unit up to the excess flow check valve-cum-isolation
valve; excess flow check valve-cum-isolation valve; and suraksha hose pipe of
standard size connecting the domestic PNG burner) and facilities including the labour
cost of installation towards last mile connectivity, that is, between the riser isolation
valve before the metering unit and the suraksha hose pipe connecting the burner in the
customer’s premises for an amount not exceeding rupees five thousand for a single
connection.
• The entity shall not exert any undue influence on any domestic PNG customer to
purchase natural gas burner stove or avail of any other service not connected with the
supply of natural gas.
• The entity shall convert the existing LPG burner stove of a prospective domestic PNG
customer into natural gas burner stove free of charge.
• The entity should maintain separate account books including detailed activities-based
costing records to segregate direct, indirect and common costs alongwith the basis of
allocation and the revenues earned.
• The authorized entity is not allowed to cross subsidize the costs between activity of
transportation and marketing of NG in CGD network.
• There would be no preferential access allowed to the entity itself or to any other entity
for the activity of transportation of NG in CGD network.
• The authorized entity is solely responsible for carrying out the technical and safety
audits.
• The authorized entity is bound to meet the service standards prescribed in PNGRB
regulations 2008.

8.3.6 Consequences of default or termination of authorization procedure

In case the authorized entity does not comply by the rules and regulations set by the board or
failure in doing the mentioned activities except for force majeure will lead to the following
procedure:

• The board will issue a notice to the default entity providing it a reasonable time to
take remedial action.
• No action will be taken if remedial action is taken by the default entity in the
stipulated timeframe.
• In case of failure to take remedial action the board may encash the performance bond
as per the mentioned basis:
For first default  25% of the performance bond 
For second default  50% of the performance bond 
For third default  100% of the performance bond + 
termination of authorization 
The entities have to replenish the performance bond within 15 days; after that their
authorization will be terminated. The procedure for the termination of the authorization
includes:

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 • Submission of details of the CGD operations and activities by the entity as per the
directions of the board within a period of 30 days of from the date of receipt of notice
of termination.
• Entity should continue the work until another entity is awarded with the authorization
by the board itself.
• The default entity shall have to provide an undertaking to indemnify the newly
authorized entity for any liability which may arise later as a result of its past actions.

8.4 EXCLUSIVITY

The PNGRB board offers some exclusive rights to the authorized entity in an order to
maintain the interest of the entity laying or building the CGD network. This exclusivity is
offered in the form of Marketing exclusivity and exclusivity for laying and building the CGD
network. The rationale and reasons behind offering of these exclusivities to the authorized
entity are explained below:

• The exclusivity offered is envisaged with a view to facilitate the development of a

planned and integrated CGD network alongwith the vision of providing some
incentives to the entity for its investment.
• The exclusivity also facilitates the integrated work by the same and hence leaves
minimum space for any delay in work progress.
• Exclusivity also offers the pace and speed required in the initial phase of the
development of CGD network in a particular city and makes the authorized entity
solely responsible for not meeting the desired targets.
• The exclusivity for the laying and construction of the proposed CGD network is
offered keeping the economic life of the project and hence offered for the time
period of 25 years (economic life of the project) while the marketing exclusivity is
offered with keeping NG demand build up in the city or local area and hence
offered for the time span of 5 years only (for the entity operating after the appointed
day11).

8.4.1 Exclusivity for laying, building or expansion of CGD network

The board may allow the entity laying, building or expanding the CGD network for the
economic life of the project in subject to the following terms and conditions:

• The entity will continue the expansion work throughout the economic life of the CGD
project by technically upgrading the network on time to time basis and will carry out
the replacement work needed to ensure the smooth operation of the CGD network
irrespective of the requirements pre and post-exclusivity period. The entity is also
supposed to meet the service obligations even during the post-exclusivity period.
• The economic life of a project starting on or after the appointed day commences from
the grant of authorization to the entity.

11
“Appointed day” stands for the day of establishment of the PNGRB Board (01-10-2007)

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 • The further extension of the period of exclusivity solely relies with the decision of the
PNGRB Board. The board may or may not extend the period of exclusivity in a block
of ten years at a time, depending on the satisfactory compliance of the entity with the
service obligations and quality of service norms provided in the PNGRB
notifications.
• Non compliance to the service obligations may lead to the cancellation of the
authorization and exclusivity of the entity.

8.4.2 Exclusivity from the purview of common or contract carrier

The PNGRB Board can allow exclusivity for an entity laying, building and expanding the
CNG network from the purview of common or contract carrier. The exclusivity thus offered
known as marketing exclusivity and provide exclusive NG marketing rights to the entity for
the time period mentioned as per the regulations and norms. The marketing exclusivity
offered to the entities as per their date of authorization is:

Date of authorization  Marketing exclusivity (in Years) 
Entity operating before the appointed day and  3 years from the date of issue of letter by the 
authorized by the GoI   PNGRB Board if the entity is operating for 3 years 
or more before the appointed day and 5 years if 
the entity is operating for less than 3 years 
before the appointed day. 
Entity authorized on or after the appointed day 5 years from the day of authorization.   

8.4.3 Service obligations

The entity allowed exclusivity to the entity proposing to lay, build or expand the CGD
network after the appointed day under the consideration of common or contract carrier should
comply with the below mentioned service obligations:

• The entity should provide domestic PNG connections as per the bid;
• Entity should lay and build pipeline as per the inch-kilometer bid;
• Entity should provide piped natural gas connection on demand to a domestic
consumer for cooking purposes within a distance of twenty five meters of the
metering unit at the consumer’s end till the tap-off in the pipeline; and
• The entity must reach all charge areas or wards in the authorized area through
pipelines of adequate size to meet the demand of the consumers in these charge areas
or wards.
• During the period of exclusivity allowed under regulation 6, the authorized entity may
supply compressed natural gas for dispensing either through CNG dispensing
facilities owned by itself or by any other entity and in the latter case, the other entity
shall be required to pay the compression charge for CNG to the authorized entity and
enter into a mutually agreeable commercial contract with the authorized entity for
either having the online compression facilities installed in its own dispensing facilities
wherein the online compression facilities shall be owned, installed and operated by
the authorized entity, or take delivery of CNG ex-online compressor station of the
authorized entity for subsequent dispensing in the authorized area.

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 • After the expiry of the exclusivity period allowed under regulation 6, any entity using
the CGD network for transportation of natural gas may use the online compressor
facilities of the authorized entity against payment of compression charge for CNG for
dispensing of CNG either by itself or by any other entity.

With the service obligation during the exclusivity period the entity is also awarded with the
post-exclusivity service obligations too which states that:

• The entity have to continue the expansion work of pipeline network by increasing the
penetration within all charge areas based on the demand of PNG domestic; beside
laying the necessary infrastructure for the adequate availability of CNG and at
adequate pressure in the CGD network, which could emerge out of entity’s own
requirement or that of other entities which may use the CGD network in the post-
exclusivity period.
• The entity has to allow third party access on a non-discriminatory basis to any entity
in its CGD network.
• The entity must provide piped natural gas connection on demand to a domestic
consumer of any entity within any charge area; provided that the distance from the
metering unit from the consumer-end to the tap-off point in the pipeline shall not be
more than twenty five meters.

8.4.4 Cancellation of exclusivity

The exclusivity offered to the entities can be cancelled on the below mentioned grounds:

• The exclusivity to the entity operating before the appointed day can be cancelled
either for the entire authorized area or some of the part, if the entity refuses or fails to
lay, build or expand the CGD network to meet the natural gas demand requirements
including the requirements of other entities allowed to use the CGD network post
exclusivity.
• Non compliance with the above mentioned service obligations.

The procedure for the cancellation of the exclusivity rights is mentioned in the next page:

  Page 56 
 Notice by the Board Remedial action taken by the
entity in stipulated time

No remedial action taken

by entity

Deduction of 25% of
Non replenishment of
performance bonus on 1st
performance bond
default

Replenishment of the Deduction of remaining amount

performance bond within and cancellation of exclusivity and
a week authorization

Deduction of 50% of
Non replenishment of
performance bond on 2nd
performance bond
default

Replenishment of the Deduction of remaining amount

performance bond within and cancellation of exclusivity and
a week authorization

Deduction of 100% of the

performance bond with the
cancellation of exclusivity

Replenishment of
Non replenishment Termination of
performance bond within 15
of performance bond authorization
days

Continuous flow of work

Figure 18. Procedure for cancellation of exclusivity

The above mentioned flowchart explains the procedure for the termination of the entity that
has been found guilty of not performing as per desired standards. In addition to the above
mentioned procedure it has been made clear by the board that any of the entity losing its
exclusivity for laying, building or expanding its pipeline network will automatically lose its
marketing exclusivity too.

8.5 NETWORK TARIFF AND COMPRESSION CHARGE FOR CNG

The cost of NG supplied in its compressed form is determined on a different basis which is
been exhaustively referred in process of authorization by the PNGRB Board. The basis for
determination of CNG price are clearly mentioned in the notification (dated March, 2008) of
PNGRB Board. The entity to which these regulations apply is supposed to submit all

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technical, operating and financial data of the CGD network project required by the board for
the determination of the network tariff and compression charges for CNG. The Discounted
Cash Flow12 methodology has been adopted by the PNGRB board in calculating the network
tariff.

8.5.1 Procedure for determination of network tariff and compression charge for
CNG
The network tariff and compression charge for CNG in a CGD network shall be determined
by considering a Reasonable Rate of Return13 on normative level of capital employed plus a
normative level of operating expenses in the CGD network.

1. Return on total capital employed for network tariff and compression charge for
CNG
• Return determined separately for capital employed in common infrastructure
(pipeline from tap-off point to the City Gate Station), online compressor and
related facilities excluding land for online compressing etc.
• Reasonable rate of return is applicable on total capital employed and the entity
is free to leverage the financing in any suitable manner.
• Total capital employed = Gross fixed assets in project - Accumulated
depreciation + Normative working capital14
• Gross Fixed Assets shall be equal to their actual historical cost of acquisition
(including cost of replacement and improvement) or that normatively assessed
by the board, whichever is lower.

2. Operating Cost
• Cost incurred in operation and maintenance of common infrastructure of CGD
network is computed separately in determination of network tariff while it
should be computed separately for online compressor facilities (for
compressing NG into CNG) in determination of compression charges for CNG
over economic life of project on actual or normative basis whichebver is
higher over the specified cost heads (e.g. consumables, utilities, salaries and
wages, repairs and maintenance, depreciation on fixed assets etc.)

3. Volume to be considered
The volume is used as a divisor for determination of unit network tariff and unit
compression charges should be equal to:
• Actual volume of NG transported in the network

12
Discounted Cash Flow refers to equating the inflows from the projected revenue earnings out of network
tariff and compression charge for CNG with the outflows of capital and operating expenditures over the
economic life of the project by discounting these flows at the reasonable rate of return. The volumes and
outflows are estimated over the economic life which results in the determination of the network tariffs and
compression charge for CNG required to be earned by the project to achieving the reasonable rate of return.
13
Rate of return on capital employed == 14% post tax (Remain fixed for economic life of network), considering
rate of return on long term risk free govt. securities.
14
Normative Working Capital = 20 days of operating cost excluding depreciation.

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 • Actual volume of NG compressed
4. Review of network tariff
• Review of network tariff is carried out separately for each review period.
• The review period normally considered for 5 years
• Past and present performance of the entity is monitored by the Board.
• Board can carry out the review in between two review periods in case of any
emergent condition mentioned in the draft

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CHAPTER 9: SUGGESTIONS AND CONCLUSION

9.1 LEARNINGS FROM THE STUDY

As the time is passing by the competition in City Gas Distribution business is increasing.
Recently the EOIs submitted by Reliance confirm stiff competition in near future. Now the
decision to set up CGD network in a particular city has become mandatory to the already
existing companies having a robust LPG and Liquid fuel retail network. Peeking into the
future gives an impression that the consumption of Petroleum liquid fuels and LPG is going
to decrease due to the increase in consumption of much safer and cleaner form of fuel like
Natural Gas.

The OMCs like IOCL, BPCL and HPCL which are having control in LPG and liquid fuel
retailing in most of the states are now forced to introduce their own CGD network in
prospective cities and thus increase their product line in an order to maintain their revenues.
Similarly industrial consumers are supposed to be tapped first, as industries shows increasing
economies of scale and have shorter span of payback period.

In addition to above, increasing demand of NG in states also pushing the retail companies to
go for more and more LNG contracts to ensure required NG supply as per their future vision
and local demand.

9.2 CONCLUSION

The table shown below compares the total estimated NG demand for year 2012-13 in
different districts for the development of CGD network and thus provides data regarding one
of the major benchmark for the decision.

City/Town  Estimated  Estimated NG  Estimated NG  Total 

Industrial  demand for PNG  demand for CNG  Estimated NG 
demand of NG in  distribution (in  distribution (in  demand  
the district in  MMSCMD)  MMSCMD)  (in MMSCMD) 
MMSCMD 
(Realistic 
Scenario) 
Panipat City   0.847758  0.007002301  ------------- --------
Sonepat City  0.269278  0.003737635  0.011010  0.2837 
Baghpat City  0.022900  0.000846265  0.00207  0.025816 
Baraut Town  0.022900  0.001616749 0.002804 0.0273207
Meerut City  0.05171471  0.012603007  0.047876  0.112189 
Ghaziabad town  0.738748  0.023776084  0.1  0.8625 
Noida   4.118504  0.004343686  0.032150  4.15499 
Bulandshahr City  0.1264151 0.001891611 -------------- 0.1283015
Table 35. Comparison of total estimated NG demand of cities

15
Figure incomplete due to unavailability of data

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From the above shown table few trends can be estimated which are;

Cities scoring maximum estimated industrial demand of NG: Noida > Panipat >
Ghaziabad > Sonepat > Bulandshahr > Meerut > Baraut > Baghpat

Cities scoring maximum estimated PNG demand: Ghaziabad > Meerut > Panipat > Noida
> Sonepat > Bulandshahr > Baraut > Baghpat

Looking from the Company’s perspective the total estimated industrial demand of NG has
maximum importance as it will provide the necessary thrust required in the preliminary stage
of the CGD network establishment. The CNG and small commercial customers come after
the industrial or bulk customers and the PNG customers are provided with the least priority
amongst the other form of NG requirement. Similarly other conditions like existing and
planned coverage of IGL in NCR region also affect the decision of CGD network
establishment.

Considering the estimated industrial NG demand as one of the most important factor, Noida,
Panipat, Ghaziabad and Sonepat come out with promising figures. The future development of
Noida and Ghaziabad sounds promising but with the increasing operations of IGL and
existing coverage of Adani Energy in Noida it may be difficult for IOCL to establish CGD
network, Similarly with the growing interest of IGL in developing its CGD network to the
NCR a major portion of Ghaziabad may be lost because of undue forces. Recently MoPNG
has directed Delhi Govt. to provide land to IGL in Delhi and NCR to avoid long ques of
vehicles. Another point which puts these two districts of UP in defensive state is the non-
existence of any legislation regarding the implementation of CGD network by the Uttar
Pradesh Govt.

Considering the options of Panipat and Sonepat city the first positive aspect which comes out
Panipat especially is existing infrastructure and facilities of Indian Oil Corporation Ltd. in the
form of Panipat Refinery and its township. Where Panipat refinery is one of the largest
refineries of India it also has a township which can be undertaken for PNG distribution in the
preliminary stages. Another major factor that has been associated with Panipat is the fact that
the pipeline is being laid for the upcoming Naphtha Cracker project which is to be installed in
the Panipat refinery itself and since Panipat city is not very far away from Panipat refinery it
may prove out to be matter of increasing Economies of scale with lesser payback period.
Sonepat being the next place to the Panipat refinery and with growing statistics may also
prove out to be the next possible option.

Another factor that adds up to the kitty of these two districts of Haryana is the industrial
Policy of Haryana State which promotes the use of Natural Gas in the state hence making
working conditions much better.

On the basis of above mentioned points it sounds feasible to employ CGD network
establishment in Panipat city and if possible then to follow it with Sonepat city. Leading the
total capacity to be installed to be dedicated to the CGD operations on yhe proposed RLNg
pipeline as………..

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9.3 SUGGESTIONS

The author recommends the following measures for the PSU to establish sound market
portfolio in Gas marketing;

• The OMC should equip its existing ROs on National Highways connecting the above
selected city to Delhi with CNG dispensing facilities. In this way the OMC will be
able to register its presence in the city from the neighboring state itself and hence will
catch the interest of all types of CNG customers. The move will also work out in a
positive manner for the industrial consumers and will facilitate the need of NG in their
existing or future industrial plans.
• The PNG distribution process should be started from the Panipat refinery township in
first phase of development in an order to achieve increasing economies of scale. This
move will enable the OMC to get authorization by the PNGRB Board.
• Simultaneously during the course of upgrading existing ROs on highways, existing
ROs of different companies having location in remote area of the city or outskirts
should be contacted for franchise option. In this way the OMC will be able to generate
a good amount of money during the initial stages which will be a profitable venture
with the outlets of other OMCs. In return the company will receive increasing market
presence and credibility.

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ANNEXURE1. REFERENCES

1. Market Demand Study (industrial Demand) for RLNG on proposed Dadri-Panipat

pipeline-March 28, 2008 by MDRA group.
2. http://www.censusindia.gov.in last accessed on June 30, 2008.
3. http://www.panipatrefinery.net/left.asp?mSection=Highlights last accessed on July
14, 2008.
4. http://www.infraline.com, last accessed on July 17, 2008.
5. Sanketak-2007, a ready reckoner to the growing districts in Uttar Pradesh.
6. Basic datasheet of Ghaziabad, Meerut, Gautam Budh Nagar, Bulandshahr, Baghpat,
Panipat, Sonepat from Census of India 2001
7. Statement of Dr. U. D. Chaubey, General Manager, Indraprastha Gas Limited on 8th
annual general meeting.
8. http://iglonline.net last accessed on June 12, 2008.
9. Corporate presentation, IOCL, March 14, 2008.
10. Corporate presentation by Om Narayan, IGL.
11. Press release in http://www.assocham.org on June 19, 2008
12. http://www.indianelpvii.com last accessed on June 23, 2008
13. http://www.petroleum.nic.in last accessed on June 6, 2008.
14. http://mahanagargas.com last viewed on June 26, 2008.
15. http://www.gglonline.net last viewed on June 26, 2008.
16. http://www.sonipat.nic.in last viewed on June 30, 2008.
17. http://www.haryanaindustries.nic.in last viewed on June 30, 2008.
18. http://pngrb.gov.in lat accessed on July 8, 2008.
19. Expression of Interest (EOI) submitted by GAIL India Ltd. and RGCL to the PNGRB
Board for CGD network development in Ghaziabad, Noida, meerut, Sonepat.
20. Corporate Presentation by Mr. B.S. Negi on cross border pipelines.
21. Internal Document on City Gas Operations in India by IOCL.
22. Dadri-Panipat pipeline map via http://infraline.com
23. PNGRB regulations on exclusivity, authorization and network tariff estimation.
24. PNGRB Draft Paper on Natural Gas Utilization Policy-2007.

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