Petroleum and Natural Gas

Regulatory Board

9th City Gas Distribution (CGD)

Bidding Round
Contents

1. Gas as Fuel

2. CGD Business

3. 9th CGD Bidding Round

4. Bidding Schedule

Page 2
Gas as Fuel

Page 3
 Gas Consumption in India

Gas Consumption and its share in Energy Mix Natural Gas Share in Energy Mix (2016)

10.1% 10.5%
9.7% 24.0%
8.9%
7.9%
7.1%
6.6%
6.0% 6.2%
165.8
142.5 147.7 139.1 142.4
132.4 134.2 128.6 130.7
94.6
6.2%

FY09 10 11 12 13 14 15 16 17 18P India World

Gas Consumption (mmscmd) % of Energy Mix

► Gas consumption linked to domestic gas availability, LNG affordability and

infrastructure

► NG share in India’s energy mix far below global average – room for growth

► Gas accounts for 25% share in Gujarat’s energy mix

Source: PNG Stat, PPAC, BP Stats Page 4
Why Natural Gas?

1
2 Gas as fuel –
enabler to meet
Gas - country’s COP21
environment commitments on
friendly fuel Carbon emissions

Gas
Gas Usage
Usage
4 Cheaper than
3
Natural Gas is
subsidised LPG
cheaper than
for domestic
liquid fuels such
households
as Petrol and
Diesel 5
Recent Discoveries are more
Natural Gas than oil ensuring
energy security to India
Page 5
PNGRB – Current Focus

Increase the share of Natural Gas in India’s Energy

basket

Create infrastructure to support higher

consumption of Natural Gas in India

Establish a transparent and vibrant Natural Gas

market in India

Balance the interests of Consumers, Transporters

and Producers of Natural Gas

Page 6
CGD Business

Page 7
CGD Network – Business
► Build pipelines from the gas supply source to the geographical
area – bringing gas through cascades permissible

► Lay pipelines for the domestic customers

► Exclusive right in the GA to supply:

§ PNG to domestic customers

§ CNG to vehicles

§ Industrial / commercial customers having daily gas

requirement of :

- up to 50,000 SCM

- between 50,000 to 100,000 SCM at consumer’s discretion Page 8

Previous CGD Bidding Rounds – A Snapshot

35 34

20
17
14
11
7 7 9 8 7 6
6 6 6
3 1

Pre-PNGRB Round 1 Round 2 Round 3 Round 4 Round 5 Round 6 Round 7 Round 8

(2009) (2009) (2011) (2014) (2015) (2016) (2016) (2017)
GAs Offered GAs Awarded

►35 GAs prior to PNGRB’s incorporation

►In previous bid rounds, 106 GAs were offered, out of

which 56 were awarded

Source: PNGRB Page 9

 Existing CGD Business

91 Authorised GAs

§ Area: 361,211 Sq. km. (11% of India)

§ Population: 240 Million (19% of India)

§ Domestic consumers: 4,193,076

§ CNG stations: 1,349 (vs. 62,585 retail outlets)

§ CNG Vehicles: 3,078,779

§ Commercial customers: 25,932

§ Industrial customers: 7,507

Source: PPAC – March 2018 Industry snapshot Page 10
 CGD Business – Financially Attractive

IGL MGL
3,914
3,815 2,078 2,078 2,034
3,681 3,686 1,870
1,499
3,367
606
448 458
354 360 393
299 297 301 311

FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17
Revenue (INR Cr) PAT (INR Cr) Revenue (INR Cr) PAT (INR Cr)

GAIL Gas Gujarat Gas

2,819 9,006
7,794
6,106
1,568 5,093
64 447
991 1,044
726
39
27 190 221
11 18 28
FY13 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17
Revenue (INR Cr) PAT (INR Cr) Revenue (INR Cr) PAT (INR Cr)

Page 11
Source: Capital IQ, Annual Reports
 CGD Business – Financially Attractive

IGL MGL
25.1% 32.2% 31.6%
22.6% 21.5%
20.0% 21.0% 26.1% 24.4%
23.5%

19.3% 18.4% 22.7%

17.3% 17.8% 20.5%
16.0% 18.8% 19.2%
16.9%

FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17

Operating Margin (%) RoCE (%) Operating Margin (%) RoCE (%)
GAIL Gas Gujarat Gas

11.7% 11.9% 14.6%

12.3% 11.9%
8.3%
6.3% 6.3% 7.5% 10.7%
6.8% 7.9%
6.0% 6.8%
5.1% 4.7% 5.9%
4.3%

FY13 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17

Operating Margin (%) RoCE (%) Operating Margin(%) RoCE (%)

Page 12
Source: Capital IQ, Annual Reports
9 th
CGD Bidding
Round

Page 13
Natural Gas Infrastructure in India

Pipelines (km) ► Existing

GAs – 91
► In Operation –
16,500 ► GAs
► In Execution – - Offered –
11,900 86

LNG (MMTPA) Gas Producing Areas

► Operating– 26.7

► Upcoming – 33.8

Page 14
Key Policy Enablers

► Regulatory interventions
► CNG in public transport

► Ban on Petcoke and FO - Delhi, Haryana, Uttar Pradesh and

Rajasthan

► Domestic gas allocation for Domestic PNG and CNG

► Designated CGD as “Public Utility”

► State governments’ commitment for facilitation of CGD

networks

► GoI drive to connect 1 Crore households to PNG by

2020 Page 15
9th CGD Bidding Round – Unique Investment
Opportunity
► 86 GAs covering 174 districts (156 full &
Large GA offering 18 part)
► Spread over 22 States / UTs

Vast Coverage
► 29% of India’s population
► 24% of India’s area

E-Bidding ► Electronic Bidding introduced

► Time for Financial Closure and Gas tie up

Financial Closure
and Gas tie up increased to 270 days from earlier 180
days
Page 16
9th CGD Bidding Round – Unique Investment
Opportunity
► Increased from 5 years to 8 years
Marketing
Exclusivity ► Extendable by up to 2 years based on
physical performance

Pipeline ► Gas pipeline company to provide

Connectivity connectivity within 180 / 270 days

Bidding ► Focus on end results to attract serious

Parameters bidders and encourage competition
Rationalized ► Pre-determined penalties introduced

Performance ► PBG capped at Rs.50 Crore

Bank ► PBG linked to Population of GAs
Guarantee
► Additional Bid Bond discontinued
Page 17
Eligibility Criterion - Technical

► Entity having CGD or hydrocarbon pipeline

construction experience:
► on its own

► through a JV

► through PMC or technically competent firm

► having adequate personnel with prior CGD or

pipeline experience

Page 18
 Bid Evaluation Criteria
Weightage
Highness of Domestic PNG Connections

50%
Highness of CNG Stations

Lowness of Transportation rate for CGD (1st Year)

10% Lowness of Transportation rate for CNG (1st Year)

20%
10% Highness of inch-km steel pipeline
10%

► Quote for Transportation rate of CGD - Not to be less than Rs 30 per MMBTU
► Quote for Transportation rate of CNG - Not to be less than Rs 2 per kg
► Subsequent years rates would be adjusted for inflation based on WPI
Page 19

** Exception for certain GA’s

Bidding Schedule

Page 20
Bidding Schedule

Release of Pre-bid Bid Technical Technical Financial Award –

document: conference : Submission bid opening: bid bid October
12 Apr’18 14 May’18; deadline: 12-18 Jul’18 evaluation evaluation 2018
Response to 10 Jul’18
queries on
website

• Submission as well as opening on https://www.tcil-india-electronictender.com

• Hard copies only for Bid bond and Application fee
Page 21
Petroleum and Natural Gas Regulatory Board

Thank You
Minimum Net-Worth and PBG
Population in GA Minimum net-worth of bidder Amount of PBG
per 2011 Census entity

More than 5 million Rs.150 Crore for a population of 5 Rs. 50 Crore

million, plus Rs. 30 Crore for each 1
million of population or part thereof in
excess of 5 million

2 to 5 million Rs.100 Crore Rs. 33 Crore

1 to 2 million Rs. 75 Crore Rs. 25 Crore

0.5 to 1 million Rs. 50 Crore Rs. 15 Crore

0.25 to 0.50 million Rs. 25 Crore Rs. 8 Crore

0.1 to 0.25 million Rs. 10 Crore Rs. 3 Crore

< 0.1 million Rs. 5 Crore Rs. 1.5 Crore

Page 23
Phasing of Work Program

By End of Contract Cumulative % of Work Program completed

Year
PNG Connections CNG Stations Inch-Km of steel
pipeline
1st Nil Nil 5

2nd 10 15 20

3rd 20 30 40

4th 30 45 60

5th 40 60 70

6th 60 75 80

7th 80 90 90

8th 100 100 100

Page 24