Piped cooking gas in all cities and towns in State soon
Cost of gas likely to be only one third of LPG cylinders

Hyderabad|India|April'2011:Piped Cooking Gas will reach every kitchen in the houses in Andhra Pradesh, both in the urban and rural areas, positively by next year end. The Chief Minister N Kiran Kumar Reddy reviewed recently the activities of the newly constituted Andhra Pradesh Gas Distribution Corporation Limited (APGDCL). He asked the officers of the A.P. Gas Infrastructure Corporation (APGIC), APGDCL and Petroleum & Natural Gas Regulatory Board (PNGRB) to complete the pipeline laying work on war footing in urban and rural areas so that piped gas could be supplied to all areas to ensure balanced growth. He wanted the work to be taken up simultaneously.

The officials told the Chief Minister that the price of the cooking gas would be just one third of that of present LPG cylinders. Chairman and officials of the PNGRB, APGIC and other officials concerned assured the Chief Minister that works are in full swing with an aim to make available the piped gas in Andhra Pradesh at the earliest. As far as Hyderabad is concerned, the piped gas distribution is ready to kickstart from the NALSAR Colony in Shamirpet soon. The rest of the city will also be covered at the earliest.

It may be stated here that the State Government with an intention to utilise the natural gas for the overall development of the State, particularly for the sectors like power, fertilisers, ceramics, glass, domestic fuel and automobile fuel etc, have created a Special Purpose Vehicle APGIC--"Andhra Pradesh Gas Infrastructure Corporation". The APGIC is a Government Company and is a Joint Venture of APIIC and APGENCO with 51% and 49% equity respectively. The APGIC intends to participate in upstream (exploration and production), midstream (pipeline infrastructure) and also the downstream (trading) activity covering the full chain of natural gas business and accordingly it has started acting swiftly in all these activities.

The Chief Minister said Natural Gas is available abundantly in both off and on shores of the State. He said Krishna-Godavari Basin is considered to be one of the world's richest deposits of natural gas. The APGIC got the mandate to participate in the NELP biddings for the Exploration and Production of Natural Gas. Accordingly, the APGIC within 45 days of its inception swiftly acted and participated in the NELP VIII bidding conducted by the Directorate General of Hydrocarbons, Government of India for the KG Blocks. The APGIC joined hands with the global majors of E&P activities of oil & natural gas, such as British Gas, ONGC, OIL, NTPC and participated in the bidding.

The APGIC won one Deep Water Block and three Shallow Water blocks with other consortium partners. The APGIC has 10% equity in all the four blocks and other partners got the remaining 90%. British Gas is the operating partner for the Deep Water Block whereas ONGC is the operating partner for the three Shallow Water Blocks. It is estimated that, as 10% equity holder in the four blocks, the APGIC has to spend about 40.5 Million USD in total. The financial commitment as consortium partner for the financial year 2010-11 is Rs.13.57 crores for the activities of E&P in these four blocks.

APGIC is aiming to participate in the development of City Gas Distribution (CGD) Networks. Keeping in view the State Government's ideology of equitable development of all areas, the APGIC has requested the Petroleum and Natural Gas Regulatory Board (PNGRB) to switch over to District Gas Distribution Network instead of CGD so as to bring the natural gas/piped gas to rural areas along with the urban areas. The proposal was accepted by the PNGRB. The APGIC has taken proactive initiative in submitting the Expression of Interest to lay and maintain the City or Local Area Gas Distribution Networks for the 12 districts of Medak, Rangareddy, Nalgonda, Khammam, West Godavari, East Godavari, Krishna, Srikakulam, Vizianagaram, Visakhapatnam, Karimnagar and Warangal so far.

The Hyderabad district was already awarded to M/s.Bhagyanagar Gas Limited. Kakinada, Samalkot, Pithapuram and Peddapuram and Vijayawada cities are also awarded to M/s.Bhagyanagar Gas Limited in the earlier biddings by PNGRB. The work is under progress in these CGDs. Whereas Rajahmundry city has been awarded to M/s. Reliance. Therefore, total 13 districts are covered in the State. Out of which only Hyderabad district is totally covered in one Geographical Area of CGD bidding and Rajahmundry, Kakinada and Vijayawada cities are covered excluding other parts of the districts in their Geographical Areas. Three Geographical Areas of our State covering four districts of Nalgonda, Ranga Reddy, Medak and Khammam are included in the 4th round bidding by the PNGRB. The remaining 8 districts will be included for which the Expression of Interest has already been submitted to it in the ensuing 5th round of bidding. APGIC is preparing the Expression of Interest for the remaining 10 districts and the work will be completed in the next 6 months.

As the APGIC did not possess the technical knowhow and expertise to participate in the bidding for the CGDs as per the norms of PNGRB on its own as of now, and keeping in view the technicalities and huge investments required to execute these projects, the Government decided for creation of Andhra Pradesh Gas Distribution Corporation Limited. Initially it has created as a whole subsidiary of APGIC. The GAIL (India) Limited, which has lot of experience in laying and maintaining the Hydrocarbon pipeline is an equal partner with 25% equity. The equity composition of this Company is as follows: APGIC - 25%, GAIL (India) Ltd - 25% and Private equity - 50%.

The APGIC is also planning to participate in the natural gas trading activity particularly LNG/RLNG so as to cater to the needs of all segments and for this purpose it intends to start a separate private company by name Andhra Pradesh Gas Trading Corporation. The partners, and their equity composition and other issues will be finalised soon. HPCL and GAIL (India) Limited have shown interest to partner with ASPGIC.