As India advances its mission to transition towards cleaner fuels and energy efficiency, piped natural gas (PNG) has emerged as a cornerstone of this transformation. With rising concerns over air quality, industrial pollution and the need for more reliable fuel alternatives, the PNG segment within the city gas distribution (CGD) industry is witnessing steady and strategic growth across the country. Leveraging this momentum, key players have scaled infrastructure in diverse geographies ranging from high-density industrial zones to tourism-heavy and emerging manufacturing regions, building extensive pipeline networks and onboarding thousands of consumers.
Charting IRM’s growing network
Established in December 2015, IRM Energy has operational presence in four states and one union territory (UT), encompassing five authorised geographical areas (GAs). These include Banaskantha in Gujarat, Fatehgarh Sahib in Punjab, Diu and Gir Somnath in Daman & Diu (with part of Gujarat), and Namakkal and Tiruchirappalli in Tamil Nadu. The company has built a robust infrastructure network, comprising 111 compressed natural gas (CNG) stations and over 5,700 inch-km of pipeline, serving more than 75,000 domestic, 424 commercial and 215 industrial PNG consumers, as of March 2025. This balanced focus on both CNG and PNG, with a nearly even distribution of demand, has enabled IRM Energy to cater effectively to diverse customer segments.
One of the most advanced GAs in the network is Banaskantha in Gujarat. Covering over 12,000 square km and strategically located along major national and state highways, the area has seen steady growth in both vehicular and household demand. It has 49 operational CNG stations, over 59,000 domestic connections, 283 commercial connections, and 16 industrial connections and nearly 2,850 inch-km of pipeline.
In Punjab’s Fatehgarh Sahib district, the PNG network has benefited significantly from regulatory interventions. The region includes industrial clusters like Mandi Gobindgarh, which houses hundreds of manufacturing units. An important driver here has been the National Green Tribunal’s directive, encouraging industries to shift to PNG, reducing pollution from traditional fuels. With more than 1,350 inch-km of pipeline and 12 CNG stations already in place, the GA serves over 6,000 households and about 285 commercial and industrial (C&I) customers combined. Situated within the Fatehgarh Sahib GA, the industrial towns of Sirhind and Nabipur form part of a critical manufacturing corridor alongside Mandi Gobindgarh. As of March 2025, the network includes 1,355 inch-km of pipeline, 12 CNG stations and one city gate station. PNG penetration has reached 6,150 domestic connections, 86 commercial consumers and a notable 199 industrial connections, reflecting strong industrial uptake.
The GAs of Diu and Gir Somnath, though smaller in terms of industrial activity, play a unique role due to its tourism-heavy economy. With natural attractions like the Somnath temple and Gir forest, the area sees a significant floating population, translating into strong demand for CNG. Despite a challenging landscape, nearly 1,040 inch-km of pipeline has been laid, supporting 17 CNG stations and around 9,300 domestic and 44 commercial PNG users.
In Tamil Nadu, the twin districts of Namakkal and Tiruchirappalli represent a fast-developing GA in southern India. Known for its manufacturing clusters, the region spans close to 8,000 square km and is criss-crossed by five national and seven state highways. While still in early stages of PNG adoption, the GA has 429 inch-km of pipeline and 33 CNG stations. Over 500 households and some commercial establishments have already been connected. Further, the presence of six industrial estates and one major industrial complex in the region, along with the planned entry of new industries into Tiruchirappalli, presents a significant opportunity for industrial PNG penetration.
Key challenges in PNG roll-out
One of the most persistent challenges is the delay in obtaining statutory approvals for laying pipelines, especially from local municipal bodies and road authorities. The cost of acquiring land and restoring roads after pipeline work adds significantly to project budgets.
On the consumer side, reluctance to switch from traditional fuels like liquefied petroleum gas (LPG) is a major issue, often driven by high initial installation costs and limited awareness of PNG’s long-term economic and environmental benefits. Government schemes such as the Pradhan Mantri Ujjwala Yojana, which promote subsidised LPG, further complicate conversion efforts. In addition, earlier supply chain disruptions due to the Covid-19 pandemic had led to material shortages and delays in construction, the effects of which are still being managed in some regions.
To overcome these challenges, the industry has adopted a more granular, GA-specific strategy to onboard C&I clients. These efforts are built on detailed demand mapping, in collaboration with local industry associations, and the deployment of dedicated acquisition teams. Pricing models that include capex recovery and installation subsidies have made the transition more attractive to business customers. The reliability of PNG supply has also improved significantly, due to long-term sourcing agreements for regasified LNG, with established players in the energy market. These arrangements not only provide price stability but also support the uninterrupted expansion of the PNG network.
Transitioning towards green energy
Digitalisation now touches every stage of the PNG life cycle. Consumer surveys and demand forecasting inform marketing and outreach. Project planning includes everything from budget estimation and material procurement to construction scheduling and lastmile connectivity. Operations and maintenance rely on predictive tools for asset management, gas flow optimisation and rapid response to service issues. Detailed engineering and simulation modelling allow for better network design and capacity planning. Health and safety are integrated through real-time surveillance, corrosion management, leak detection and emergency response systems, all of which contribute to a more resilient and reliable network.
The CGD industry is also aligning itself with India’s broader climate goals. In one of the leading initiatives by IRM Energy network, a captive solar park of over 3 MW has been commissioned to power CNG stations in a key GA, showcasing how renewable energy can supplement traditional gas distribution. The industry is also venturing into the electric vehicle (EV) space, with EV charging stations being installed at both company-owned and dealer-operated locations. These sites may eventually offer a mix of future fuels, including biofuels, battery swapping stations and LNG, expanding the role of CGD companies from gas distributors to holistic energy retailers.
The road ahead
With demand for CNG and PNG almost evenly matched, the CGD industry is on a steady path towards becoming a critical component of India’s clean energy ecosystem. The sector’s ability to tailor strategies to regional contexts, embrace cutting-edge technologies and deliver customer-focused solutions has laid a strong foundation for continued growth. As the industry expands its network, digitises its operations and embraces renewable integration, it is not just meeting the energy needs of today but also building the infrastructure for a sustainable tomorrow. Through every km of pipeline laid and every household connected, the CGD sector is fuelling progress and redefining how energy reaches the last mile.
Within this landscape, ERM Energy is emerging as one of the sector’s most agile and innovative players. The company’s plans for scaling up C&I connections are rooted in a granular, GA-specific approach that leverages local insights and partnerships. Its strategic gas sourcing agreements with Shell Energy India and the Gujarat State Petroleum Corporation ensure supply reliability at competitive rates, which is critical for onboarding industrial consumers. The adoption of advanced tools such as supervisory control and data acquisition, geographic information systems, automated meter reading and enterprise resource planning systems has allowed ERM Energy to streamline operations, optimise networks and deliver superior service.
Partnerships with international players are helping the industry elevate its operational benchmarks. Collaborations with foreign companies that have deep experience in the gas distribution and industrial burner sectors are enabling the adoption of global best practices. Joint technical committees formed as part of these partnerships are helping improve network efficiency, gas sourcing strategies and customer offerings. Such collaborations also open up avenues for importing LNG at competitive prices, making industrial PNG adoption more viable and attractive. Backed by technical and strategic support from Japan’s Shizuoka Gas Company Limited, the company is leveraging global expertise to enhance burner technology, import LNG efficiently and build a more sustainable gas ecosystem. Its diverse supply base, strong parentage, focus on customer acquisition and fast-track project execution are all key drivers that position ERM Energy as a growth leader in the evolving PNG market.
(Based on remarks and presentation by Prashant Sagar, Chief Operating Officer, IRM Energy, at a recent Indian Infrastructure conference)
