Reliance to Enter Piped LPG Business Through its JV with British Petroleum

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    The Reliance-British Petroleum joint venture bid for licence to retail gas in 15 cities on Tuesday while Indraprastha Gas Ltd has placed bids for 13 cities, according to a PTI report. The bids are for the biggest city gas distribution licensing round that will offer 86 area permits for selling CNG and piped cooking gas in 174 districts in 22 states and union territories. The bidding closes on Tuesday.

    Reliance to Enter LPG Business Through its JV with British Petroleum

    India Gas Solutions Pvt Ltd, a 50:50 joint venture (JV) between UK's British Petroleum PLC and Reliance Industries, has placed its bet on making its maiden foray in city gas distribution with bids in 15 cities, according to PTI sources. The report further said that IGL, which retails CNG in the NCR, has placed bids for 13 cities. Meanwhile, Essel Infraprojects Ltd has put in seven bids.

    The 86 geographical areas, made by clubbing adjacent districts, are on offer in the 9th city gas distribution (CGD) bidding round. These areas cover 24 percent of the country and 29 percent of the population. The round is likely to attract investments of Rs 70,000 crore, according to the Petroleum and Natural Gas Regulatory Board (PNGRB).

    The CGD licences on offer are for Bhopal in Madhya Pradesh; Ahmednagar in Maharashtra; Ludhiana and Jalandhar in Punjab; Barmer, Alwar, and Kota in Rajasthan; Coimbatore and Salem in Tamil Nadu; Allahabad, Faizabad, Amethi and Rai Bareli in Uttar Pradesh; Dehradun in Uttarakhand and Burdwan in West Bengal.

    Bidders have been asked to quote the number of CNG stations to be set up and the number of domestic cooking gas connections to be given in the first eight years of operation.

    The number of CNG dispensing stations proposed to be set up has been assigned 20 percent weightage. Length of the pipeline to be laid in the GA and the tariff proposed for city gas and Compressed Natural Gas (CNG) have been assigned 10 percent weightage each. Also, a floor tariff of Rs 30 for city gas and Rs 2 per kg for CNG has been put in order to deter bidders from quoting unviable tariff of 1 paisa per unit.

    Companies having a net worth of not less than Rs 150 crore can bid for cities with a population of 50 lakh and more while the same for cities with a population of 20 lakh to 50 lakh has been proposed at Rs 100 crore. The net worth eligibility goes down with population, with a Rs 5 crore net worth firm being eligible to bid for cities that have less than 10 lakh population.

    Inputs from PTI

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