India’s city gas distribution (CGD) industry is undergoing significant transformation due to urbanization, rising demand, and government emphasis on low-carbon resources, with plans to expand the network. Compressed Natural Gas (CNG) stations and Piped Natural Gas (PNG) connections.
India’s City Gas Distribution (CGD) sector is undergoing a significant transformation, driven by the government’s commitment to expanding natural gas infrastructure and promoting cleaner energy sources. The roadmap for this expansion involves substantial investments, extensive pipeline development, and ambitious targets for increasing both
Government Initiatives and Infrastructure Development
A key component of India’s energy strategy is the expansion of the national gas grid to ensure uniform availability of natural gas across all regions. As of January 2025, the country’s natural gas pipeline network is expected to increase by 10,805 km, adding to the existing 24,945 km, as announced by the Ministry of Petroleum and Natural Gas. This expansion is pivotal in completing the national gas grid and facilitating the growth of CGD networks nationwide.
The government’s emphasis on CGD expansion is evident in its plans to cover 407 districts, potentially making natural gas accessible to over 70% of the population. This initiative is anticipated to attract investments totaling approximately ₹120,000 crore over the next decade.
Expansion Plans of Major CGD Players
Several key players in the CGD sector have outlined robust expansion strategies:
- Adani Total Gas Ltd (ATGL): A joint venture between the Adani Group and TotalEnergies SE, ATGL has secured $375 million in financing to expand its CGD network across 13 Indian states. The company plans to enhance its infrastructure to meet the growing demand for natural gas, aligning with the government’s vision of increasing CNG stations to 20,000 by the end of the decade.
- AG&P Pratham: Backed by global infrastructure investor I-Squared Capital, AG&P Pratham is set to invest up to ₹8,000 crore over the next three years to expand its CGD network. The company aims to establish an extensive network encompassing over 24,000 inch-kilometers of steel pipelines, more than 2,000 CNG and LNG stations, and serve over 150 million customers across 324,000 square kilometers.
- GAIL (India) Ltd: As the country’s largest gas pipeline utility, GAIL is actively seeking long-term LNG import deals totaling 5.5 million tons per year, aiming to increase its capacity to 21 million tons annually by 2030. The company also plans to invest in expanding its pipeline network and enhancing petrochemical capacities, reflecting its commitment to supporting the CGD sector’s growth.
Projected Growth and Future Outlook
The CGD sector is poised for substantial growth, with projections indicating a Compound Annual Growth Rate (CAGR) of 10% by 2030. The number of households receiving PNG connections is targeted to rise to 50 million, and the number of CNG stations is expected to increase to around 10,000 by 2030.
This expansion is not without challenges, including the need for timely infrastructure development, securing long-term natural gas supplies, and ensuring affordability for consumers. However, the concerted efforts of the government and industry stakeholders are geared towards overcoming these obstacles to achieve the envisioned growth.
In conclusion, the roadmap for the expansion of India’s CGD sector is marked by strategic investments, infrastructure development, and collaborative efforts between the government and private entities. The progress and future plans of key CGD players underscore a collective commitment to enhancing natural gas accessibility, promoting cleaner energy, and contributing to the country’s sustainable development goals.
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