Megha Engineering, Adani Total among winners in CGD auction

Hyderabad-based Megha Engineering and Infrastructures has won 15 geographical areas (GA) in the latest round of auctions for city gas distribution (CGD). According to sources, Adani Total Gas, a joint venture between the Adani Group and French energy giant Total, has won the second-highest 14 GA in the first tranche of the 11th round of CGD auctions.

The other winners in the auction include Indian Oil (9 GA), Bharat Petroleum (6), Dinesh Engineers (4) and Assam Gas (4). The government had received more than 430 bids against 61 GA in December in this round of bidding, where 65 GA spread over 215 districts in 19 states and one Union Territory were offered. The successful bidders will have to construct city gate stations or mother stations, lay the main pipeline and distribution pipelines and install compressed natural gas (CNG) stations.

A present, there are 228 GA authorised by the Petroleum and Natural Gas Regulatory Board (PNGRB) in 27 states and UTs, covering about 70% of the country’s population. After the 11th round, CGD networks are expected to reach more than 90% of the population.

The present share of gas in the energy basket of the country is more than 6%, and the target is to take it to 15% by 2030. CGD uses 22% of natural gas in the country, and is the second-largest gas consuming category followed by fertiliser. The PNGRB recently invited bids for five new GA for the second tranche of the 11th round of bidding.

The CGD sector receives cheaper domestic gas under an administered price mechanism for the domestic piped natural gas (PNG) and CNG categories. However, liquefied natural gas has to be purchased from outside to meet the industrial and commercial PNG demand. The CNG segment comprises around 40% of consumption in CGD. As of November 2021-end, there were 83.7 lakh domestic PNG connections and 3,532 CNG stations across the country.

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