Analysing City Gas Distribution

Analysing City Gas Distribution

This article describes City Gas Distribution, which distributes natural gas to households and commercial sectors like transportation, hospitals, hotels, factories, etc.

Natural gas is a necessary fuel used to power numerous activities in the domestic and commercial sectors. The demand for gas in households has been increasing over the years. It is used not just for cooking but also for several other activities like space heating, generating power, heating water, air conditioning, powering vehicles, etc. There is a greater focus on the single switch technology wherein the gas main supply switch needs to turn on, enabling households to carry out all these gas-related activities. In the commercial sector, the gas has more or less similar uses, but the demand is much higher due to large-scale operations. The Combined Heat and Power (CHP) model is getting popular.

Types and Benefits of Natural gas

There are primarily two types of natural gas- PNG and CNG. 

The difference between the two types of natural gas does not lie in their composition but their use and transfer method. 

PNG (Piped Natural Gas): Piped natural gas is supplied at low pressure through pipelines. It is used in households and for commercial purposes as well. PNG can be provided through pipes 24 x 7, and there is no need to store it in cylinders or anything. This uninterrupted supply makes it very convenient for the users, who do not need to go through the tedious process of advanced bookings. It is economical as it is cheaper than LPG (liquefied petroleum gas). Also, people pay for their gas usage after its use rather than paying upfront. 

CNG (Compressed Natural Gas): CNG is an alternative fuel in vehicles. It is a greener and cheaper alternative to petrol and diesel. Since it is the cleanest fuel, it increases the engine’s life, due to which the vehicle requires less maintenance. Hence, it saves a lot of money for its users. The mileage offered is also the same, making CNG a popular choice among vehicle owners.

Natural gas can be produced domestically and imported from other countries in the form of LNG. 

City Gas Distribution Networks

Implementing a city gas distribution network aims to encourage people (both domestically and industrially) to use natural gas to carry out fuel-related activities. Since natural gas is cleaner, it plays a massive role in achieving the government’s ambitious plan to make India carbon neutral by 2070. The emission of pollutants from other fuels like petrol and diesel is a huge problem, and natural gas is a safe alternative to these conventional fuels.

Under the city gas distribution project, the government plans to include more households and commercial sectors in the natural gas distribution. It is also advantageous because many people in rural areas lose their lives while cooking food using firewood, cow dung, etc. A high amount of soot and smoke come from these sources, deadly if consumed in large amounts.

The usage of natural gas, thus, would improve the living standards of people. The households in the major cities of India (like Delhi, Mumbai, Kolkata, Bangalore, etc.) are already starting to get piped gas connections. The plan is to have piped gas connections in 3.5 crore establishments by 2029.

Industry Trends

As per the January 2020 data, a significant chunk of the city gas distribution network comes from households. Per the Petroleum and Natural Gas Regulatory Board Petroleum Planning and Analysis Cell, commercial units have very few percentages. As of January 2020, the number of PNG connections in households was 59 lakh, in commercial units was 29 thousand, and in industries was 10 thousand. 

The government plans to provide natural gas connection to 96% of the Indian population by 2030. 

The skyrocketing petrol and diesel prices also pushed vehicle owners to make their engines CNG compatible. India had a total of 2,713 CNG stations as of January 2021. Under the CGD project, the number would increase manifold, and new CNG stations would open up in new states and union territories.

The major market player in this field is IGL (Indraprastha Gas Limited), which has provided maximum piped natural gas connections. 

The market is estimated to grow at a compound annual growth rate (CAGR) of 15% over the next five years. The demand from households would drive this growth upward.


India is on the path to being a gas-based economy as the government has ambitious plans to increase natural gas share in the total energy mix. The natural gas share stood at 11% in 2010, and the plans are to increase it to 20% by 2025. The city gas distribution project can help realise this goal as more and more households and commercial units become a part of the city gas distribution network. This would increase the natural gas market in the future and reduce our dependence on petroleum-based fuels. The city gas distribution project comes under the Petroleum and Natural Gas Regulatory Board (PNGRB), a regulator designated by the Indian government to supervise this project.