From Adani Gas to IOC, over 80 force majeure requests flood PNGRB

The eight-year deadline for ninth round was kept at September 30, 2026, and that for the tenth round was March 31, 2029
The Petroleum Natural Gas and Regulatory Board (PNGRB), the downstream regulator, has got over 80 requests for force majeure from the ninth and tenth round of city gas distribution (CGD), in which 41 companies participated.

According to multiple sources close to the development, the big firms that applied for force majeure include Adani Gas, Gail Gas, Indian Oil Corporation, Indraprastha Gas, Haryana City Gas, and Torrent Gas.

Some companies, including Adani Gas, approached the regulator seeking an extension of at least 12 months on deadlines in starting of commercial operations under the allotted geographical areas.

“The regulator is considering the request from the CGD entities. PNGRB has not yet decided on the timeline of extension. We will have to discuss it with the banks,” said a government source.

The eight-year deadline for ninth round was kept at September 30, 2026, and that for the tenth round was March 31, 2029. The two rounds of bidding are expected to see investments to the tune of Rs 1.2 trillion by 2030 — of which Rs 70,000 crore for 86 geographical areas (GA) is likely to happen under the ninth round and another Rs 50,000 crore for the 50 GAs awarded under the tenth round in March 2019.

“We have approached the PNGRB for an extension of the deadline for the GAs we got under several rounds,” said an official from Indraprastha Gas. In a webinar with industry majors held last week, PNGRB Chairman D K Sarraf had ensured the industry players that the regulator will approach the 80-odd force majeure requests it got with an open mind.

“We were told that our issues will be addressed. Demand has declined by almost 10 per cent of what it was before the lockdown. This mostly owing to the near-zero demand from commercial and CNG segments,” said managing director of a private sector CGD major.

Some firms indicated that the demand drop may well be a temporary phenomenon, though it may take at least sx months for economic activities to be back on track.

“We see a short-term impact due to reduction in natural gas demand owing to Covid-19. Demand will come back. We are confident that this will push our industry on how to compensate the demand,” said an Adani Gas official. After the completion of the tenth round, Adani Gas’ network will reach 38 GAs comprising of 71 districts, accounting to 8 per cent of India’s population.
The firm has started operations in ten GAs under the two rounds and a few more areas were to be on track by the first week of May, which have got derailed.

According to an official from a public sector undertaking, the upcoming rainy season is also expected to spoil the starting of work after the lockdown.

Under the ninth round, 15,305,564 domestic piped natural gas (PNG) connections and 3,627 CNG stations were committed. On tenth round, another 20,292,760 domestic PNG connections and 3,578 CNG stations were committed too, making this one of the most vib-rant sector in terms of credit off take.

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