AG&P to invest Rs 2,700 cr on City Gas Distribution infra in Tamil Nadu

Under the MoU, AG&P will invest Rs 2,700 crore over the next eight years to build CGD networks | Representational image
Atlantic, Gulf & Pacific Company (AG&P), a downstream gas and LNG logistics company, signed a Memorandum of Understanding (MoU) with the Tamil Nadu Government for the development of City Gas Distribution (CGD) networks to supply natural gas across six districts of Tamil Nadu. The company will invest around Rs 2,700 crore in the State.

The new CGD infrastructure is being developed under AG&P’s CGD brand in India - AG&P Pratham. It will deliver uninterrupted supply of PNG to households, commercial and industrial customers, and Compressed Natural Gas (CNG) depots and stations for 24x7 access to CNG for vehicles.   

Tamil Nadu Chief Minister Edappadi K Palaniswami today unveiled AG&P’s PNG project in Rameshwaram and dedicated the State’s recently launched first City Gate Station & CNG Mother Station launched by AG&P in Ramanathapuram District. 

Under the MoU, AG&P will invest Rs 2,700 crore over the next eight years to build CGD networks in districts of Kanchipuram, Chengalpattu, Vellore, Ranipet, Thirupathur and Ramanathapuram. Around 7,000 direct and indirect jobs will be created through this MoU.

AG&P Pratham’s PNG initiative in Rameshwaram, its natural gas Mother Station in Ramanathapuram along with two CNG stations, are spearheading the development of the State’s city gas infrastructure that will drive socio-economic development as more and more people transition to smarter and cleaner fuels.    

Tamil Nadu has tremendous opportunities for growth, development, and innovation in the CGD sector. With the Government’s continued support and sustained focus on infrastructure, we are providing Tamil Nadu’s regional and rural communities with reliable, 24/7 access to natural gas and all the health and economic benefits it offers. Furthermore, AG&P’s LNG import terminal in Karaikal (KLNG), strategically located 280 km south of Chennai and in close proximity to Tamil Nadu’s thriving manufacturing clusters, will also be a major contributor to Tamil Nadu’s transformation into a gas-based economy. KLNG will not only provide  access of natural gas to power plants, and industrial and commercial customers within a 300 km radius of Karaikal, but it will guarantee stable, best  priced natural gas supply to the region’s CGD networks including those operated by AG&P Pratham and other CGD companies”, said PPG Sarma , Managing Director – City Gas Distribution, AG&P. 

In 2018, 12 out of 38 districts in Tamil Nadu were awarded licenses by the Petroleum and Natural Gas Regulatory Board (PNGRB) for the development of CGD networks. Of these, AG&P bagged six districts encompassing  ~13751  square km, who will be connected to natural gas through 12,000 km of pipeline being laid by the company. Under the licenses, AG&P will sell natural gas exclusively for eight years and operate its CGD facilities exclusively for 25 years. By 2028, AG&P will be supplying PNG to 20 lakh households, 10,000 commercial establishments, 150 industrial enterprises such as SIPCOT, SIDCO and Mahindra World City, and will operate more than 200 CNG stations across the state.  

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel