City gas distribution (CGD) network is turning out to be the next big downstream expansion in India, after fuel retailing, with investments of as much as ₹1.1 trillion expected over the next decade, said company executives. CGD refers to transportation or distribution of natural gas to consumers in domestic, commercial or industrial and transport sectors through a network of pipelines. This business has, over the last decade, attracted several companies to lay a network of gas pipelines.
“CGD is the next big expansion in the downstream segment with nearly 40 companies operating in the segment. This, against fuel retailing, which is dominated by a few players, including state-run oil marketing companies,” said Rajendra P. Natekar, director, Bharat Gas Resources Ltd (BGRL). “Though in terms of pure numbers, fuel retail stations gain, in terms of coverage of distribution and customers, the impact of CGD will be felt more. Besides, CGD will gain more traction over time.” BGRL will invest ₹4,000 crore to build a CGD network in Ahmednagar, Aurangabad, Sangli and Satara districts in Maharashtra. The company won bids for the areas in the ninth edition of the CGD auction.