Auction of gas distribution licence for 100 more cities soon, says Pradhan

Petroleum Minister Dharmendra Pradhan.

The Indian petroleum downstream regulator will begin the process of auctioning gas distribution licences for 100 cities this month, Petroleum Minister Dharmendra Pradhan said on Thursday.

Addressing industry chamber Ficci on the domestic production potential of hydrocarbons, he said the Petroleum and Natural Gas Regulatory Board (PNGRB), has already given away gas distribution licenses for 80 cities, while the proposed 100 more would help boost gas consumption in the country towards increasing share of the clean fuel in the energy mix to 15 per cent in the next decade, from the 6.5 per cent at present.

In line with this objective, the government also plans to expand pipelines to secure gas supplies to the country's northeast region, which holds rich hydrocarbon reserves but lacks infrastructure, the Minister said.

"A consortium of five PSUs (public sector undertakings) have proposed to bring a gas pipeline to the northeast region and have soought the PNGRB's permission for the project," he said.

The PSUs are together planning to build a gas grid in the northeast and link it to the Jagdishpur-Haldia pipeline, currently being built by GAIL, he added.

Pradhan also said that in a bid to boost crude oil production from mature fields, the government will soon unveil an Enhanced Oil Recovery policy incentivising such activity, as well for exploration and production (E&P) from challenging deep sea fields.

Noting the marketing and pricing freedom allowed to producers through policy reforms in this area, the Minister, however, cautioned against the idea of an independent upstream regulator, saying the Indian E&P sector is not yet mature enough.

"We have a democratic mechanism in India and everything is under scrutiny," he said with reference to the idea of an independent regulator, adding that it is a different situation compared to an economic giant like China which lacked press and democratic freedoms.

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