New Delhi: India’s City Gas Distribution (CGD) sector is set for significant growth, with industry leaders calling for policy reforms, infrastructure expansion, and strategic investments to drive the country’s energy transition. These insights were shared during the Economic Times Oil & Gas Annual Conference & Expo 2024, at a panel discussion on Future of City Gas Distribution: Innovation and Opportunities.
Focus on expanding infrastructure
The CGD sector is seeing a surge in investments aimed at expanding infrastructure and capabilities. GAIL Gas Ltd is targeting its efforts across 16 Geographical Areas under its authorization. “We have already invested ₹5,000 crore in CGD networks and plan an additional ₹10,000 crore by 2030 to enhance infrastructure and expand reach,” said Goutom Chakraborty, CEO, GAIL Gas Ltd.
Bharat Petroleum Corporation Ltd (BPCL) is focusing on project execution as it commits ₹25,000 crore to CGD networks over the next five years. “Our priority is to expand gas distribution capabilities by focusing on infrastructure creation and efficient project execution,” said Akshay Wadhwa, Business Head (Gas), BPCL.
Accelerating sustainability goals
Sustainability remains a priority for CGD operators. Mahanagar Gas Ltd (MGL) has aligned its growth strategy with this vision. “At MGL, we have strategized to ensure 25% of our future revenue comes from new businesses, reflecting the increasing importance of sustainability as a driver for growth,” said Sanjay Shende, Deputy Managing Director, MGL.
Policy reforms to drive expansion
Policy reforms emerged as a critical enabler for CGD growth. Haryana’s proactive approach in recognizing gas as an industry and mandating a 45-day timeline for approvals is a model for others. “Haryana is supporting the CGD sector by streamlining project clearances, accelerating timelines, and enabling faster project execution,” said Rajeev Mathur, Director, Haryana City Gas Distribution Ltd.
Experts also highlighted the need for broader reforms to increase natural gas usage from 6% to 15% of the energy mix. “Reforms like GST implementation, forming an independent system operator (ISO), entry-exit tariffs, and market-driven pricing are essential for achieving the 15% target,” said Deepak Mehta, Chief Business Officer, Indian Gas Exchange.
Unlocking biogas potential
The potential of compressed biogas (CBG) in India was another key focus area. “India’s surplus biomass can generate 60 million metric tonnes of CBG annually. Under the SATAT initiative, 15 million metric tonnes can be achieved through 5,000 plants, but challenges like feedstock availability and supply chain efficiency must be addressed,” said Ajit Kumar Thakur, Executive Director (Alternate Energy), Indian Oil Corporation Ltd.
Driving innovation and flexibility
Experts emphasized the importance of innovation and operational flexibility for CGD companies. “Competitive pricing and consumption flexibility are priorities for CGD companies. IGX supports this with tailored contracts, SSLNG options for non-pipeline areas, and collaboration on biogas policies,” said Mehta.
The discussion highlighted the sector’s transformative potential, driven by innovation, strategic investments, and policy reforms, positioning CGD as a key contributor to India’s energy transition.
