Network Expansion: GAIL’s recent initiatives in the CGD sector

GAIL’s recent initiatives in the CGD sector

The city gas distribution (CGD) segment took a serious hit due to the halt in construction and the downturn in sales volumes during the Covid-19 pandemic. This has had a negative impact on the sector’s short-term outlook. However, CGD entities remain optimistic about the medium- and long-term prospects, as the sector is rapidly adapting to the changing business environment, moving towards automation and adopting digital technologies. Since the CGD industry’s infrastructure development is not a reliable indicator of its performance, other metrics provide a more realistic picture. One of these factors is the rise in demand for regasified liquefied natural gas (RLNG) and imported natural gas, which is independent of the construction of infrastructure. As of September 2021, a total of 21,735 km of pipelines have been laid as part of the gas grid.

Due to the impact on revenue generation from new users after a spurt in demand was witness­ed, the focus shifted to upgrading amenities for the existing clients. A number of methods are being adopted to do this, including digitalisation of various processes. Smart metering, au­to­mated billing processes, e-invoicing and in­voice remin­der functionalities are being implemented widely, and the existing infrastructure is being improved to accommodate additional clients. In the wake of the Covid-19 outbreak, the industry has placed greater emphasis on optimising the existing infrastructure.

Efforts during 2021-22

In February 2021, GAIL Limited completed the co­ns­truction of a 348 km long pipeline between Dobhi in Bihar and Durgapur in West Bengal. The pipeline, which cost Rs 24.33 billion, is part of the Pradhan Mantri Urja Ganga project, which intends to transport natural gas to India’s eastern regions. The project connected Jagdishpur in Uttar Pra­de­sh, the terminus of legacy gas pipes, to the eastern states of Bihar, West Bengal, Jhar­kh­and and Odisha. The Dobhi-Durgapur natural gas pipeline is anticipated to rehabilitate the Sin­dri fertiliser factory in Jharkhand and provide gas to the Matix fertiliser plant in Durgapur. Additio­nally, it will im­pro­ve natural gas delivery to the industrial, commercial, residential and vehicle sectors in major towns of Bihar, West Bengal, Jharkhand and Odi­sha. In the same month, GAIL acquired a 5 per cent share in the Indian Gas Exchange (IGX), an arm of the Indian Energy Exchange, becoming the third strategic investor in the IGX.

Following this, in March, GAIL Gas and Confi­den­ce Petroleum India Limited (CPIL) struck an ag­reement to establish compressed natural gas (CNG) stations in Bengaluru, with the goal of strengthening the city’s network supplying clean CNG to automobiles. The company issued letters of intent (LoIs) for the establishment of approximately 115 CNG stations of various models (namely, DODO, full DODO and MRU) across its GAs. The virtual pipeline is also gaining traction, providing an opportunity for the corporation to construct infrastructure for transporting natural gas to remote regions. GAIL Gas is constructing its first liquefied natural gas (LNG)/liquid to compressed natural gas terminal in the Mandideep In­dustrial Region (near Bhopal). Ad­ditionally, ap­proxi­mately six more LNG stations are sc­he­duled to be established across the Golden Quadrilateral to facilitate the use of LNG in the transportation se­ctor. In the next five years, GAIL Gas plans to build 300 CNG stations and around 500,000 new domestic piped natural gas (PNG) connections.

In a recent development, GAIL has undertaken hydrogen blending as a pilot project to demonstrate its techno-commercial feasibility in the CGD network. In Indore, Ma­dhya Pradesh, GAIL has begun injecting grey hy­dro­gen into the city gate station and intends to eventually replace it with green hydrogen. More­over, the company has secured all essential governmental approvals to begin the project.

The project is the first step in India’s road to a hydrogen-based, carbon-neutral energy future. Hydrogen-blended natural gas will be provided to Aavantika Gas Limited, which will retail CNG to automobiles and PNG to Indore residents.

GAIL will develop seven new CNG refuelling stations around Patna by the end of March 2022. This will bring the overall number of such stations to 20, up from 13 at the end of the current fiscal year. Two additional stations on Bhootnath Road and in Khusrupur will be operational by March 2022, with five stations already open and one nearing completion. Furthermore, the company plans to develop a 700 km pipeline connecting Mumbai and Nagpur in order to facilitate the flow of gas to central India. The fuel will be transported by gas pipes to the eastern and north-eastern regions, as well as to consumers in the south. Meanwhile, GAIL is  on track to complete the majority of the Urja Ganga project by mid-2022, securing eastern India’s energy future.

GAIL is contemplating another attempt to lay a pipeline to Srinagar and has stepped up efforts for infrastructure expansion, bearing in mind the government’s aim of a gas-based economy. GAIL is now seeking approval from the Petroleum and Natural Gas Regulatory Board for the 425 km Gur­daspur to Srinagar pipeline via Jammu.

GAIL aims to complete the Urja Ganga stretch connecting Bokaro and Angul in Odisha by March 2022. Additionally, the pipeline extension to Gu­wahati will require the construction of a 729 km extension from Barauni in Bihar. The extension would connect to the future 1,500 km “Indra­dha­nush” pipeline network in Guwahati by June 2023. GAIL also proposes to install a 750 km-long natural gas pipeline from Srikakulam and Angul.


The CGD sector is likely to witness tremendous growth over the next few years as natural gas is ex­pected to be subject to the goods and services tax. This will facilitate and standardise operati­ons across the country. It is also expected to drive ex­pa­nsion of other small- and large-scale companies, as well as enable urbanisation in a number of regions. Within the next five to six years, the CGD sector is expected to serve 70-80 per cent of the population and enter a highly productive period.