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CGD in India

CGD in India. CGD Scenario in India. No of CGD Companies : 18 No of towns : 40 Volume being handled : 12.93 MMSCMD or 9.1 TMT/Day

muhammed-femi
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CGD in India

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  1. CGD in India

  2. CGD Scenario in India • No of CGD Companies : 18 • No of towns : 40 • Volume being handled : 12.93 MMSCMD or 9.1 TMT/Day Major Entities : IGL, MGL, Gujarat Gas, GSPC Gas, Adani Energy Limited , BGL , AGL

  3. CGD Scenario in India

  4. Energy Consumption in India Energy Consumption in India

  5. Current Scenario • Till date PNGRB has received approximately 90 EOI s from different entities. • EOI submitted by: RGCL, GAIL Gas, Adani Energy Limited, Torrent Power, CUGL, GEECL, IGL, MGL • 6 cities have been awarded in1st round of bidding in March 2009.

  6. 1st Round Result

  7. 2nd Round of Bidding The cities due for 2nd stage of bidding during the last week of June are Ghaziabad Chandigarh Rajhamundry Allahabad YanamShadol Jhansi

  8. 2nd Round shortlisting

  9. Economics of CGD Project Economic life of each CGD project : 25 Years Expenditure for each CGD Project : 100 Cr to 500 Cr depending upon size of city Expenditure profile : 70% by first 5 years 30% after 5th year IRR for Project : 14%

  10. Internal Process for Bid Submission Identify potential city basis demand assesment Preparation of DFR Prepare Bid Strategy Obtain Board approval for bid submission

  11. Challenges in CGD Bidding Process is highly confidential & dynamic in nature Time bound decision is required. In convenient to approach Board frequently regarding bid parameters during the process of bidding. Bidding Strategy can vary from city to city. Intense competition is expected for high potential cities.

  12. Approval sought Recommendation of CFD is sought for submission of the proposal to the Board for approval to down delegate the authority to an empowered committee consisting of Director (M) & Director (F) or to CFD for submission of bids to PNGRB for CGD Project.

  13. Petroleum and Natural Gas Regulatory BoardRegulationsforCGD Network

  14. Application of CGD rules • Regulation shall apply to entity which is laying, building, operating or expanding or which proposes to lay , build, operate or expand a CGD network. • CGD network shall be designed as per PNGRB technical standard and specifications, safety standards for supplying natural gas on a sustained basis.

  15. Volumetric Threshold

  16. Process for Grant of Authorization Reject the Proposal In case of single bid Board may go for re bid

  17. Minimum Eligibility Criteria • Payment of application fees as specified under the PNGRB (levy of fee and other charges) regulations, 2007. • The entity is either a body corporate or undertakes to become a company registered under the companies Act on being declared as a successful bidder. • The entity should have a credible plan sourcing natural gas for supply in the proposed CGD network. • The entity should not have been penalized under section 28 or punished under chapter IX of the PNGRB Act

  18. Minimum Eligibility Criteria- Technical • Entity having experience of laying & building 300km of hydrocarbon pipeline may be on cumulative basis • Entity on its own / with joint venture (with 11% equity) having experience of at least one year in O&M of a CGD network • Entity having at least three technically qualified personnel with experience in a) Commissioning of hydrocarbon pipeline b) O&M of natural gas pipelines, gas compressors c) Commercial issues including gas pricing, accounting d) Safety of natural gas infrastructure.

  19. Minimum Eligibility Criteria-Financial

  20. Bid Bond

  21. Bid parameters

  22. Performance Bond

  23. Regulations for Exclusivity for City or Local Natural Gas Distribution Networks

  24. Types of Exclusivity • Exclusivity for laying , building and expanding CGD network • Exclusivity from the purview of the common carrier or contract carrier

  25. Laying, Building, Expanding CGD Network • Exclusivity period for the economic life of the project taken as 25 years • Entity to meet service obligations ; in case of default, it may lose exclusivity • PNGRB may consider extending exclusivity by a period of 10 years beyond economic life of the project

  26. Common Carrier or Contract Carrier • Five years from the date of authorization in case of new projects • In case of existing projects Three years * in case the project is under operation for three years or more before the appointed day Five years * in other cases * from he date of commencement of physical laying, building , operation or expanding the network

  27. Service Obligations During the period of exclusivity from the purview of the common carrier or contract carrier • Provide domestic PNG connections as per bid* • Lay/build steel pipeline as per inch-km bid* • Reach all wards or charge areas • Provide domestic PNG connectivity at demand within a distance of 25 meters of the metering unit at consumer end till the tap-off point

  28. Service Obligations Post Exclusivity • Continue to expand the network to meet the requirement of its own customers and those of other entities. • Allow third party access on a non-discriminatory basis to other entities desirous of using the network

  29. Default & Termination In case of failure of service obligation • 25% of Performance bond shall be encahsed for the first default • 50% of Performance bond shall be encahsed for the second default • 100% of Performance bond shall be encahsed for the third default and authorization shall be terminated

  30. Default & Termination In addition Board may levy civil penalties u/s 28 of PNGRB act • Rs 1 Cr (max penalty)+Rs 10 Lakhs per day continuation of default In case default is with regard to restrictive trade practice • 5 times of unfair gain made by entity or Rs 10 Cr which ever is higher • In addition Board may levy Rs 25 Cr penalty (max) + Rs 10 Lakhs per day continuation of default

  31. Thanks

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