State-owned Indian Oil Corporation (IOC) [IOCL:IN] announced an INR70bn (USD944m) investment to construct city gas distribution (CGD) networks in cities including Jammu, Madurai, and Haldia, as reported by Indian Wire on January 17. The enterprise recently obtained nine licenses to retail compressed natural gas (CNG) to automobiles and piped cooking gas to households. The licenses are equivalent to about one-third of the demand potential covering 61 geographical areas (GAs) available in this round of CGD bidding. Other bidders, such as Megha Engineering and Infrastructures and Adani Total Gas [ADGAS:IN], respectively received 15 and 14 licenses in this round of bidding.
Before the recent INR70bn investment, IOC had already planned INR200bn (USD2.69bn) for its CGD Vertical plan. As of now, the company has secured licenses for 49 GAs and 105 districts across 21 states and union territories of India, making it a substantial participant in the country’s CGD network. India sees natural gas as a cleaner form of energy and transition fuel to substitute coal, the country’s current pillar power, as India turns towards renewable power. India committed to raising the share of natural gas in its energy mix to 15% by 2030, compared with the current level of 6.5%. To support the energy transition, it announced a One Nation One Gas Grid scheme to boost the country’s LNG infrastructure, which aims for more than 15,000 km of gas pipelines covering 407 districts across India by 2023.