OMCs issue 500 LoIs for compressed biogas units, EoI extended till March

By: |
Published: December 24, 2019 12:57:42 AM

The minimum plant size has been fixed at 2 tonne per day and is expected to cost between Rs 2 crore to Rs 6 crore.

oil, gstThe developers will set up the plant in an year’s time from the date of LoI and OMCs will procure the gas at Rs 46/kg plus Rs 2.5 as GST.

The oil marketing companies under the Sustainable Alternative Towards Affordable Transportation (SATAT) scheme have issued over 500 letter of intents (LoIs), as of date, to private developers to set up compressed biogas (CBG) plants across the country, a senior ministry official said. The OMCs have also extended the last date for expression of interest (EoI) to March 2020 as it failed to generate satisfactory response from developers initially.

Vijay Sharma, director, ministry of petroleum and natural gas (MoP&NG), said, at a road show on CBG in Mumbai, that, “CBG would help in effective waste management, reduction in carbon emissions, and creating additional source of revenue for farmers. The aim of the scheme is to replace the compressed natural gas (CNG) which is produced from fossil fuel in the long run.”

“If total potential of CBG is exploited in the country, India can produce around 62 million metric tonne equivalent of CBG annually, which is sufficient to replace the entire gas demand of the nation and make the farmers from ‘Annadata’ to ‘Urjadata’ and contribute in making a brown revolution for energy.”

In October, Union minister of petroleum and natural gas & steel Dharmendra Pradhan launched the SATAT Scheme under which oil & gas marketing companies including Bharat Petroleum Corporation, Indian Oil Corporation, Hindustan Petroleum Corporation, GAIL (India) Ltd and Indraprastha Gas Ltd have invited EoI from potential entrepreneurs to set up around 5,000 CBG plants, and produce over 15 million metric tonne of CBG annually by 2023.

The developers will set up the plant in an year’s time from the date of LoI and OMCs will procure the gas at Rs 46/kg plus Rs 2.5 as GST.
“The tariff of Rs 46/kg is an all inclusive cost. If the companies are not able to arrange for logistics to supply to the nearest retail outlets, OMCs will procure the supplies from developers minus the transportation cost from the tariff,” Sharma said.

The minimum plant size has been fixed at 2 tonne per day and is expected to cost between Rs 2 crore to Rs 6 crore. Majority of the LoIs have been issued in Uttar Pradesh, Chandigarh, Maharashtra, Haryana and Punjab, the official said.

CBG is purified and compressed biogas, which is produced through a process of anaerobic decomposition from various waste and biomass sources like agriculture residue, cattle dung, sugarcane press mud and spent wash of distilleries, sewage water, municipal solid waste (MSW), bio-degradable fractions of industrial waste. CBG has properties similar to CNG, thus it can be used as green fuel in automotive, industrial and commercial sectors along with CNG.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1No more tears! 790 tonnes of imported onion reach India; some sent to Andhra Pradesh, Delhi, says govt official
2After onion prices, cooking oil to bring tears; no respite in coming weeks too
3Oil prices sink but on track for third weekly rise on trade hopes