Gujarat Leads India’s Efforts to Become a Natural Gas Based Economy (Part 1)

| India: Gandhinagar | Source: Darshan Soni
1st CNG Station of GSPC

1st CNG station of GSPC, Jun 2003. 
Inaugurated by then CM of Gujarat & now PM of India, Mr. Narendra Modi

Gujarat, a state in Western India renowned for its diversity of enterprise and business acumen, has been a determined leader for gas-fuelled energy diversification. Today, it is home to 469 CNG filling stations and 1 million natural gas vehicles. How it transitioned to natural gas is a story of vision and determination.

This article is presented in two parts.


Unfolding Gas

Gas distribution first began in 1972, by Vadodara Municipal Corporation (VMC), eight years after Delhi Municipal Corporation commenced biogas supply, in 1980. Gujarat’s government established GGCL (GIICL & Maftlal group JV), a predecessor of Gujarat Gas Ltd (GGL), to commence formal natural gas distribution in the cities of Surat, Bharuch and Ankleshwar in the early 1990s. MGL followed in 1994 with gas supply in Mumbai, and Maharashtra and IGL commenced in 1995 in Delhi.

India’s Petroleum and Natural Gas Regulatory Board (PNGRB) was constituted under The PNGRB Act, 2006 to regulate the refining, processing, storage, transportation, distribution, marketing and sale of natural gas and petroleum. PNGRB also authorises city gas distribution (CGD) Licenses. A total of 91 CGD GA (Geographical Area) agreements today cover only 11% of India’s area and 19% of population.

CNG various vehicles used in GujaratBetween 1991-94, VMC (now VGL, JV of GAIL and VMC) and GGL started their pilot CNG projects in Vadodara and Surat. A few pilots were also started in Delhi and Mumbai. In 1994 GGL commercialized India’s 1st CNG station in Surat. In 1995, a lawyer filed a Public Interest Litigation (PIL) on “the health risks caused by air pollution emitted from road vehicles” with the Supreme Court; a subsequent judgement in 1998 directed to replace or convert all buses, three-wheelers and taxis to CNG in metros like Delhi.

Green Gujarat – A Model State

For decades, the Govt. of Gujarat (GoG) has been a visionary and enabler of an ecosystem for affordable and accessible energy. A restructuring of energy interests in 1994 led to the formation of Gujarat State Petroleum Corporation Limited (GSPC) in order to establish a strong foothold in the hydrocarbon value chain. In 1996, gas production from a small field in Hazira, Gujarat and the first-of-its-kind sales contract with eGGCL by a state-owned entity (other than GAIL) was the stepping stone in making Gujarat a gas-based economy.

In early 21st century (2001-2003) under the leadership of then CM Shri. Narendra Modi (now Hon. PM of India), GoG prepared a vision document for a state-wide natural gas grid and 250 CNG stations. In 2003, GSPC opened its first CNG station in Hazira, Surat. After acquiring BG Group’s 65% interest in GGCL in 2012, GGCL and GSPC amalgamated to become GGL in 2015. “The newly merged company would strengthen the state’s gas-based economy and usher in a new chapter in this field in the country,” said Gujarat’s energy minister Saurabh Patel at the time.

With the growing demand for gas, R-LNG terminals were established in Gujarat: India’s first R-LNG terminal came in Dahej (2004) and second in Hazira (2005). Availability of international gas to Gujarat and GSPL’s state-wide pipeline network thereby enabled distribution of gas to farthest demand centres in the state.

In 2005, GoG proactively amended legislation to include the compulsory use of compressed natural gas (CNG) in vehicles, the first in India to do so.

2010 was a special year for the state, its Golden Anniversary (‘Swarnim’) of formation in 1960). A record 110 CNG stations were constructed and commercialized in one year (2010-11) by GSPC and some by other companies as part of anniversary initiatives.

India’s 1st L-CNG station (with PESO approval) was commissioned in April 2018 in Waghodia-Vadodara, Gujarat and in May 2017, GGL and Petronet LNG Ltd signed an MoU for LNG filling stations in Gujarat.


India - Gujarat's Vijay Rupani CNG

Gujarat’s Chief Minister, Mr. Vijay Rupani, gave away 501 CNG auto rickshaws with 100% financial assistance to owner-drivers in Oct 2016.

Presently in Gujarat natural gas comprises 25% of the energy mix which is higher than world average of 24% (India average is 6.2%). Seven gas companies are operating and cover approximately 85% of the state through 469 CNG stations (32%), catering to 0.9 to 1 Million NGVs (30%) daily out of a national total of 1491 CNG stations and 3.2 million NGVs.

Central Gujarat (Charotar Area) is home to some of India’s largest renewable natural gas (RNG) plants. In Sept 2018, Surat’s Agriculture Produce Market Committee (APMC) became the first Cooperative Society in India to commercially sell (inject) biomethane produced from fruit and vegetable waste to GGL’s pipeline network.


Gujarat has been and continues to be a model state and leader in NGVs, gas and RNG distribution in India. Its striving for energy diversity and cleaner air is making a significant contribution to India’s declared COP21 goals and vision of becoming a gas-based economy.

This article has been prepared in consultation with Mr. Darshan Soni, CEO and Founder, Neet-Vasant Pvt Ltd. The company has been formed to serve the Renewables and Conventional energy sectors in India.

Next issue the author will discuss the bigger picture for India and the increasingly important role of LNG in the country’s transportation setting.

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