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9th City Gas Distribution (CGD)
Bidding Round
Petroleum and Natural GasRegulatory Board
Page 2
Contents
1. Gas as Fuel
2. CGD Business
3. 9th CGD Bidding Round
4. Bidding Schedule
Page 3
Gas as Fuel
Page 4
► Gas consumption linked to domestic gas availability, LNG affordability andinfrastructure
► NG share in India’s energy mix far below global average – room for growth
► Gas accounts for 25% share in Gujarat’s energy mix
Gas Consumption in India
Gas Consumption and its share in Energy Mix
94.6132.4 142.5
165.8147.7 134.2 128.6 130.7 139.1 142.4
7.9%8.9%
10.1% 9.7%10.5%
7.1%6.6%
6.0% 6.2%
FY09 10 11 12 13 14 15 16 17 18PGas Consumption (mmscmd) % of Energy Mix
Source: PNG Stat, PPAC, BP Stats
Natural Gas Share in Energy Mix (2016)
6.2%
24.0%
India World
Page 5
Why Natural Gas?
Gas UsageGas
Usage
Recent Discoveries are moreNatural Gas than oil ensuring
energy security to India
Cheaper thansubsidised LPG
for domestichouseholds
Gas -environmentfriendly fuel
Gas as fuel –enabler to meet
country’s COP21commitments on
Carbon emissions
1 2
4
5
Natural Gas ischeaper than
liquid fuels suchas Petrol and
Diesel
3
Page 6
PNGRB – Current Focus
Increase the share of Natural Gas in India’s Energybasket
Create infrastructure to support higherconsumption of Natural Gas in India
Establish a transparent and vibrant Natural Gasmarket in India
Balance the interests of Consumers, Transportersand Producers of Natural Gas
Page 7
CGD Business
Page 8
►Build pipelines from the gas supply source to the geographical
area – bringing gas through cascades permissible
►Lay pipelines for the domestic customers
►Exclusive right in the GA to supply:
§ PNG to domestic customers
§ CNG to vehicles
§ Industrial / commercial customers having daily gas
requirement of :
- up to 50,000 SCM
- between 50,000 to 100,000 SCM at consumer’s discretion
CGD Network – Business
Page 9
Previous CGD Bidding Rounds – A Snapshot
6 7 7
14
20
34
117
35
63
69 8
17
16
Pre-PNGRB Round 1 Round 2 Round 3 Round 4 Round 5 Round 6 Round 7 Round 8
GAs Offered GAs Awarded(2009) (2009) (2011) (2014) (2015) (2016) (2016) (2017)
►35 GAs prior to PNGRB’s incorporation
►In previous bid rounds, 106 GAs were offered, out of
which 56 were awarded
Source: PNGRB
Page 10
Existing CGD Business
91 Authorised GAs
§ Area: 361,211 Sq. km. (11% of India)
§ Population: 240 Million (19% of India)
§ Domestic consumers: 4,193,076
§ CNG stations: 1,349 (vs. 62,585 retail outlets)
§ CNG Vehicles: 3,078,779
§ Commercial customers: 25,932
§ Industrial customers: 7,507Source: PPAC – March 2018 Industry snapshot
Page 11
CGD Business – Financially Attractive
Source: Capital IQ, Annual Reports
IGL MGL
GAIL Gas Gujarat Gas
3,367
3,9143,681 3,686
3,815
354 360448 458
606
FY13 FY14 FY15 FY16 FY17
Revenue (INR Cr) PAT (INR Cr)
1,4991,870
2,078 2,078 2,034
299 297 301 311393
FY13 FY14 FY15 FY16 FY17
Revenue (INR Cr) PAT (INR Cr)
726991 1,044
1,568
2,819
2711 18
39
64
FY13 FY14 FY15 FY16 FY17
Revenue (INR Cr) PAT (INR Cr)
7,7949,006
6,1065,093
28
447
190 221
FY14 FY15 FY16 FY17
Revenue (INR Cr) PAT (INR Cr)
Page 12
CGD Business – Financially Attractive
IGL MGL
GAIL Gas Gujarat Gas
22.6%20.0% 21.5% 21.0%
25.1%
19.3%17.3% 18.4%
16.0% 17.8%
FY13 FY14 FY15 FY16 FY17
Operating Margin (%) RoCE (%)
32.2%
26.1%23.5% 24.4%
31.6%
22.7% 20.5% 18.8% 16.9% 19.2%
FY13 FY14 FY15 FY16 FY17
Operating Margin (%) RoCE (%)
6.8%5.1% 4.3%
6.0%4.7%
8.3%6.3% 6.3%
11.7% 11.9%
FY13 FY14 FY15 FY16 FY17
Operating Margin (%) RoCE (%)
7.5%
12.3% 11.9%14.6%
5.9%
10.7%
6.8%7.9%
FY14 FY15 FY16 FY17Operating Margin(%) RoCE (%)
Source: Capital IQ, Annual Reports
Page 13
9th CGD BiddingRound
Page 14
LNG (MMTPA)
► Operating– 26.7
Natural Gas Infrastructure in India
► Upcoming – 33.8
Gas Producing Areas
Pipelines (km)
► In Operation –16,500
► In Execution – -11,900
► ExistingGAs – 91
► GAsOffered –86
Page 15
Key Policy Enablers
► Regulatory interventions
► CNG in public transport
► Ban on Petcoke and FO - Delhi, Haryana, Uttar Pradesh andRajasthan
► Domestic gas allocation for Domestic PNG and CNG
► Designated CGD as “Public Utility”
► State governments’ commitment for facilitation of CGDnetworks
► GoI drive to connect 1 Crore households to PNG by2020
Page 16
E-Bidding
Vast Coverage
9th CGD Bidding Round – Unique InvestmentOpportunity
► 29% of India’s population► 24% of India’s area
Large GA offering► 86 GAs covering 174 districts (156 full &
18 part)► Spread over 22 States / UTs
► Electronic Bidding introduced
Financial Closureand Gas tie up
► Time for Financial Closure and Gas tie upincreased to 270 days from earlier 180days
Page 17
9th CGD Bidding Round – Unique InvestmentOpportunity
BiddingParametersRationalized
MarketingExclusivity
PipelineConnectivity
► Increased from 5 years to 8 years► Extendable by up to 2 years based on
physical performance
► Gas pipeline company to provideconnectivity within 180 / 270 days
► Focus on end results to attract seriousbidders and encourage competition
► Pre-determined penalties introduced
PerformanceBank
Guarantee
► PBG capped at Rs.50 Crore► PBG linked to Population of GAs► Additional Bid Bond discontinued
Page 18
Eligibility Criterion - Technical
► Entity having CGD or hydrocarbon pipelineconstruction experience:
► on its own
► through a JV
► through PMC or technically competent firm
► having adequate personnel with prior CGD orpipeline experience
Page 19
Bid Evaluation Criteria
** Exception for certain GA’s
► Quote for Transportation rate of CGD - Not to be less than Rs 30 per MMBTU
► Quote for Transportation rate of CNG - Not to be less than Rs 2 per kg
► Subsequent years rates would be adjusted for inflation based on WPI
50%
20%
10%10%
10%
WeightageHighness of Domestic PNG Connections
Highness of CNG Stations
Lowness of Transportation rate for CGD (1st Year)
Lowness of Transportation rate for CNG (1st Year)
Highness of inch-km steel pipeline
Page 20
Bidding Schedule
Page 21
Bidding Schedule
Release ofdocument:12 Apr’18
BidSubmissiondeadline:10 Jul’18
Technicalbidevaluation
Pre-bidconference :14 May’18;Response toqueries onwebsite
Financialbidevaluation
• Submission as well as opening on https://www.tcil-india-electronictender.com
• Hard copies only for Bid bond and Application fee
Award –October2018
Technicalbid opening:12-18 Jul’18
Thank You
Petroleum and Natural Gas Regulatory Board
Page 23
Minimum Net-Worth and PBG
Population in GAper 2011 Census
Minimum net-worth of bidderentity
Amount of PBG
More than 5 million Rs.150 Crore for a population of 5million, plus Rs. 30 Crore for each 1million of population or part thereof inexcess of 5 million
Rs. 50 Crore
2 to 5 million Rs.100 Crore Rs. 33 Crore
1 to 2 million Rs. 75 Crore Rs. 25 Crore
0.5 to 1 million Rs. 50 Crore Rs. 15 Crore
0.25 to 0.50 million Rs. 25 Crore Rs. 8 Crore
0.1 to 0.25 million Rs. 10 Crore Rs. 3 Crore
< 0.1 million Rs. 5 Crore Rs. 1.5 Crore
Page 24
Phasing of Work Program
By End of ContractYear
Cumulative % of Work Program completedPNG Connections CNG Stations Inch-Km of steel
pipeline1st Nil Nil 5
2nd 10 15 20
3rd 20 30 40
4th 30 45 60
5th 40 60 70
6th 60 75 80
7th 80 90 90
8th 100 100 100
