GAIL and Container Corporation of India sign MoU for natural gas transmission and distribution.

Container Corporation of India and GAIL India Limited have signed an MoU to collaborate on various business opportunities, including the development of logistics and supply chain management for natural gas. GAIL is Asia's leading natural gas transmission and distribution company, with operations in trading, petrochemistry, gas transmission, exploration, and production of hydrocarbons. The MoU aims to enhance the efficiency and effectiveness of logistics and supply chain management for GAIL's operations.

India's leading natural gas transmission and distribution company, GAIL India Limited, and Container Corporation of India (CONCOR) have signed a Memorandum of Understanding (MoU) to collaborate on various business opportunities, including the development of logistics and supply chain management for natural gas. The MoU aims to enhance the efficiency and effectiveness of logistics and supply chain management for GAIL's operations [1].

GAIL is Asia's leading natural gas transmission and distribution company, with operations in trading, petrochemistry, gas transmission, exploration, and production of hydrocarbons. The MoU is expected to leverage CONCOR's extensive logistics network and expertise to improve the supply chain for GAIL's natural gas operations. The collaboration comes at a critical time for the natural gas sector in India, with significant changes in gas allocation policies aimed at enhancing affordability and supply visibility [1].

The recent changes in India's domestic gas allocation policy, announced by the government, have introduced a two-quarter advance allocation strategy for compressed natural gas (CNG) and piped natural gas (PNG) consumers. This policy shift includes the integration of new well gas (NWG) from the nomination fields of state explorers Oil and Natural Gas Corporation (ONGC) and Oil India, and a quarterly pro-rata allocation for NWG. The government anticipates that these measures will make natural gas more affordable for CNG and PNG consumers [1].

However, the recent reduction in Administrative Price Mechanism (APM) gas allocation to city gas distribution (CGD) companies has led to concerns about profitability and price increases. Analysts predict that CGD firms may hike CNG prices by Rs 1.5-2/kg to compensate for the reduced allocation of cheaper APM gas [2]. The government has cut the APM gas allocation to CGD companies by 18% to 20%, effective from April 16, 2025, which has impacted companies like Mahanagar Gas (MGAS), Indraprastha Gas (IGAS), and Gujarat Gas (GGAS) [2].

The MoU between GAIL and CONCOR is expected to address these challenges by streamlining the supply chain and logistics for natural gas. The collaboration aims to improve the planning and delivery efficiency of natural gas, ensuring a stable and affordable supply system for the essential transport and residential sectors within the CGD network. This partnership is a significant step towards enhancing the overall efficiency of India's natural gas sector.

References:
[1] https://www.offshore-technology.com/news/india-measures-natural-gas-affordability-supply/
[2] https://www.financialexpress.com/business/industry-cgd-firms-may-hike-cng-prices-by-rs-1-5-2kg-3813008/