Boom ahead for city-gas projects

The Petroleum and Natural Gas Regulatory Board (PNGRB) expects to award contracts in 7-8 cities every month starting next year, under its ambitious city-gas networks programme, chairman L Mansingh said on Wednesday.

The award of city-gas projects has been stuck in a legal tangle after state-owned Indraprastha Gas Ltd (IGL) got a stay on the process from the Delhi High Court in August. IGL had argued that a crucial section of the PNGRB Act — Section 16 — is yet to be notified by the government, thus denying the board the right to award city-gas licenses.

Mansingh said he expects the government to rectify the matter in the coming weeks. “The government is likely to give its stand (about notifying Section 16) in the next court hearing and that will settle the matter one way or the other,” he said, pointing out that the board is going ahead with identifying areas that can be assigned city-gas contracts.

“So far, we have identified around 330 geographical areas that lie close to existing and planned trunk gas pipelines,” he said. These areas are likely to be awarded projects over the next 3-4 years.

The earlier estimate was 200 cities by 2012. Most of the habitations identified will be along the east-west pipeline being constructed by Mukesh Ambani-owned Reliance Gas Transportation Infrastructure and the Gujarat-UP Hazira-Bijapur-Jagdishpur trunk line.

Mansingh also said he expects no scarcity in gas supply. The government has set aside around 5 million cubic metres of natural gas per day for such projects, he said.

“The government has assured us that gas supply will not be an issue since it will be increased to cope up with the demand,” he said, pointing out that such projects enjoyed priority after fertiliser and power projects.

Interestingly, in the absence of firm city-gas distribution projects, the government has allocated only 2.9 million cubic metres per day from Reliance Industries’ Krishna-Godavari basin fields.