Internship Report

The aim of this report is to

understand the value chain of City
Gas Distribution.
 Certificate

This is to certify that MBA Oil and Gas Management candidate Arpit Gour of University of
Petroleum and Energy Studies, Dehradun has successfully completed three weeks
internship in Projects, Operations and Maintenance and Marketing Department of
Aavantika Gas Limited, Indore from 19th Dec 2016 to 7th Jan 2017. His conduct during the
internship was ………………………

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 Acknowledgement

I would like to thank Mr. (MD) of Aavantia Gas Limited for providing us this opportunity to
understand the CGD business. I would also like to thank Mr. Chinmay Kumar Purohit (HR
Officer) whose excellent cooperation made this internship a learning opportunity.

I would like to acknowledge Mr. Manish Gupta (Project Engineer) from projects
department, Mr. Jitendra Bhatt (Deputy Manager), Mr. Akshay (Site Engineer) and Mr.
Ashutosh Yadav (Officer) from operation and maintenance department, Mr. Sanjay Pandey
(Sr. Manager) and Mr. J Prakash from marketing department for proactively sharing their
knowledge and insights.

The working environment in Aavantika Gas Ltd. was highly motivating and inspiring; I am
highly thankful to other staff members who supported during the internship.

I would like to thank Dr. S.K. Pokhrial (HOD) and Dr.Geo Jose Fernandez (Faculty UPES) for
encouraging and motivating to earn this opportunity.

Arpit Gour
MBA (Oil & Gas)
500051101

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Introduction

Aavantika Gas Limited (AGL) is a Joint Venture company of GAIL (India) Limited and
Hindustan Petroleum Corporation Limited (HPCL), for implementation of City Gas Projects to
supply Piped Natural Gas (PNG) to consumers in domestic, industrial and commercial
sectors and Compressed Natural Gas (CNG) to automobile sector in the cities of Madhya
Pradesh.
AGL was incorporated on 7th June 2006 and it's registered office is located in Indore. Initial
subscription to the Memorandum of Association (MOA) and Articles of Association is made
by GAIL, HPCL, IL&FS, IDFC, IDFCPE and ICICI Ventures. State Govt. of Madhya Pradesh has
been offered 5% equity in the share capital of the Company.
The objective and mission of AGL is to provide safe, convenient and reliable natural gas
supply to various sectors. The single biggest factor in support of natural gas is environmental
advantages and convenience to consumers in terms of un-interrupted gas supply.
PNGRB has authorised AGL to carry out operations in Indore, Ujjain and Gwalior.

Authorised Share Capital – Rs. 100 Crores

Vision and Mission
“Our Vision is to be the Pioneer City Gas Distribution Company in the State of Madhya
Pradesh for providing Environmental Friendly Fuel to the Domestic, Commercial, Industrial
and Automobile Sectors, in order to help the Residents of M.P. to lead a Healthy & Safe
Life”.

“Environment can be a Concern for everybody, AGL takes it as a Mission” and while doing so
AGL is committed towards –
 Uninterrupted Gas Supply to Our Customers
 Customer Satisfaction & Delight
 Adopting Best Operational Practices
 Transparent Processes & Policies
 Being the guiding factor towards cleaner & safer Environment
 Adherence to Safety Standards of the Industry
 Good Corporate Governance

The highlights of the company's performance during 2015-16 are as under:

The company has registered Profit before Depreciation, Interest and Tax (PBDIT) of
Rs. 34.18 Crores and Profit after Tax (PAT) of Rs. 17.15 Crores. The PAT increased by 62%
year on year from Rs. 10.56 Crores in 2014-15 to Rs. 17.15 Crores in 2015-16. This increase
in profitability is due to increase in margins of Rs. 12.74 Crores & other operating income of
Rs. 0.54 Crore, offset by increase in other expenses, depreciation, financial cost, employees
benefit expenses and tax of Rs. 6.69 Crores. AGL achieved a gross turnover of Rs. 142.29
Crores in 2015-16 as compared to gross turnover of Rs. 134.37 Crores in 2014-15
representing an increase of 5.89%. This increase was due to growth in sales volumes of CNG
by 10.35%. There was an increase in domestic connections which also contributed to the
increase in turnover. PNG industrial volumes decreased due to availability of cheaper
alternative fuels.
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City Gas Distribution
Ministry of Petroleum & Natural Gas established the Petroleum and Natural Gas Regulatory
Board (PNGRB) with effect from 01.10.2007, under the Petroleum and Natural Gas
Regulatory Board Act 2006, to regulate the refining, processing, storage, transportation,
distribution, marketing and sale of petroleum, petroleum products and natural gas
excluding production of crude oil and natural gas. The Petroleum & Natural Gas Regulatory
Board Act-2006 provides the legal framework for the development of the natural gas
pipelines and city or local gas distribution networks. With the arrival of the PNGRB the
implementation of PNG in various cities is being taken up in a phased manner as and when
the bids are called for by the Regulator. GAIL is the pioneer of city gas distribution in India.
GAIL took many initiatives to introduce PNG for households and CNG for the transport
sector to address the rising pollution levels.

Some major CGD Companies in India are Indraprastha Gas Limited Delhi; Mahanagar Gas
Limited, Mumbai; Bhagyanagar Gas Limited, Andhra Pradesh; Avantika Gas Limited in
Madhya Pradesh; Central U P Gas Limited & Green Gas Limited in Uttar Pradesh;
Maharashtra Natural Gas Limited in Pune Maharashtra and Tripura Natural Gas Company
Limited in Tripura.

Compressed Natural Gas

It is stored on the vehicle in high-pressure tanks - 20 to 25 MPa (200 to 250 bar, or 3,000 to
3,600 psi). Natural gas consists mostly of methane and is drawn from gas wells or in
conjunction with crude oil production. As delivered through the pipeline system, it also
contains hydrocarbons such as ethane and propane as well as other gases such as nitrogen,
helium, carbon dioxide, sulphur compounds, and water vapour. A Methyl Mercaptan
odorant is normally added to CNG to facilitate leak detection. Natural gas is lighter than air
and thus will normally dissipate in the case of a leak.

Pipelined Natural Gas

It is used for Domestic, Commercial and Industrial Consumption. PNG has several
distinctions to its credit-of being a pollution free fuel, economical and safer fuel being few of
them. PNG is being supplied through pipe 24X 7. PNG offers the convenience of ensuring
continuous and adequate supply. PNG, billing is normally after a cycle of fortnightly
/monthly /quarterly after the use by the consumer whereas the consumers pay upfront for
any other fuel used by them. Thus there is savings on account of release of working capital
for the commercial and industrial sector and deferment of expenses for the domestic sector.
PNG is one of the cleanest burning fuels, and helps improve the quality of air.

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Project Department
The project department is concerned with overlooking the expansion of network in the city.
It consists of pre commissioning processes such as trenching, laying, testing and charging.

 Trenching
The process of making pits and right of way for laying network. The standards
followed in the Industry are

Obstacle Depth (In Meter)

Minor Water Crossing/Canal 2.5
Road Crossing 1.5
Rail Crossing 1.5
Normal Areas 1.2

As per the guidelines of the local authorities or because of underlying utilities such as
water pipelines, sewage pipelines etc. the depth can be altered as required. If the
terrain does not permit to drill, concrete casing may be used to provide ROW. It is
ensured that the trench base is free from stones, metal, wood, vegetation or other
debris. In case of rocky terrain the trench base is bedded with soft soil.

 Laying
 Horizontal Directional Drilling ( HDD)

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 Step I
Entry and exit pits are dug out. The HDD machine generally used can dig upto
length of 290m. To inspect the drilling pits are also dug at distance of 45m.
 Step II
The HDD machine can employ water pressure upto 1200 psi (84Kg/cm2) and
thrust upto 3000 psi (210Kg/cm2). The HDD machine starts drilling at desired
depth and direction.
 Step III
To guide the drilling a guidance system is employed which continuously
tracks the bit and underlying utilities. It also tells the depth at which the bit is
moving or should move.

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  Step IV
When the desired horizontal drilling is achieved, i.e; the bit makes it to the
end pit, then the MDPE pipe is attached to the bit with the help of a wire
gauze.
 Step V
The drill pipes are gradually pulled back laying the pipe in place.

 Testing
 Flushing
All the ends are temporarily sealed and compressed air is filled. All the ends
are opened one by one to check the presence of water, debris, dirt and
pebbles. If any, are removed by this process.
 Testing for Leakages
All the ends are now capped with end caps.

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 Compressed air is filled at a pressure of 6-6.2 bar (1.5 times higher than
normal pressure of 4 bar). This pressure is held for 24 hours and pressure
drop (if any) is checked. If the pressure drops, the line is inspected to
leakages and after repairing the same process is followed again.
 Nitrogen filling
Nitrogen is filled in the line to remove water molecules and charging
particles.
 Commissioning
The line is now charged, i.e; attached to main network and PNG starts
flowing.

 Pipe and Fittings

 MDPE Pipe
“MDPE” stands for “Medium-Density Polyethylene.” MDPE falls in the
medium-density category due to its value being in the 0.926-0.940g/cm3
range. MDPE is manufactured by using catalysts like Ziegler-Natta,
chromium/silica catalysts, and metallocene catalysts. MDPE has excellent
chemical resistance and is very stable at room temperature. It does not
dissolve at room temperature. MDPE has very good drop resistance and
shock resistance. The standard pressure in this line is 4 bar.

Nominal Outer Diameter (in mm) SDR 11 ( Thickness)

180 16.4
125 11.4
63 5.8
32 3
20 3
*SDR- Standard Dimension Ratio

 HDPE Pipe
“HDPE” stands for “High-Density Polyethylene.” HDPE falls into the high-
density category due to its value being either 0.941g/cm3 or greater than
that. HDPE has strong intermolecular forces and high-tensile strength
because of its lower degree of branching. It is mainly manufactured by using
catalysts like silica or chromium, metallocene, or Ziegler-Natta catalysts.
HDPE has excellent chemical resistance. It has highly crystalline and thus does
not dissolve easily. It is resistant to dissolving at room temperature. HDPE has
great inertness so it is easy to assemble and has excellent strength when
used in manufacturing water and pressure pipe systems. It is generally used
for crossing canals and metaled roads.
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  GI Pipe
“GI” stands for “Galvanized Iron”. They are used to connect the MDPE line to
the end users. The pressure for household users is 21 milli bar and for
commercial and industrial it is 300 milli bar. The PNGRB standards for GI pipe
in CGD are as follow:

NOMINAL 15 mm 25 mm 50 mm 80 mm
BORE
GRADE HEAVY HEAVY ('C' CLASS) HEAVY HEAVY ('C'
('C' CLASS) ('C' CLASS) CLASS)

O.D. mm max.
Min. 21.0 33.3 59.7 88.0
THICKNESS 4.0 for C 4.5 4.8 for
mm 3.2 for C Glass Glass for C Glass C Glass

NOMINAL 1.44 for C 2.93 for 6.19 9.90 for C Glass

WEIGHT Glass C Glass for C Glass
Kg / mtr.

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 Fittings

Straight Coupling Coupler

Tee Elbow

Reducer

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 Electro Fusion
An Electrical resistance element is incorporated in the socket of the fitting
which, when connected to an appropriate power supply, melts and fuses the
material of the pipe and fitting together.

The maximum gap between eccentrically located pipe and fitting i.e. Pipe
touching fitting at one point, must not exceed 2% of the pipe OD.

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 Moling

Moling is the trenchless operation of pipe laying. During moling process pits are
made at small distance and the mole is entered in the earth surface in horizontal
face from the bottom of the pit. The mole is hammered inside the soil till it
reaches other pit. The size of the drilled hole should not me more than 20% of
the carrier pipe. The MDPE pipe is attached to the mole and pulled back.

 Backfilling
The pits dug out for laying pipes need to backfilled. First the base of pit is filled
with sand then a warning wire mat is placed. The purpose of warning mat is to
protect the pipe network any unauthorised digging.

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Operation and Maintenance Department
The department is responsible for inspection and regular maintenance of pipeline network
and associated equipment. The work profile also includes DPR and monthly reports to keep
an account of gas purchased from GAIL. These reports also assist in minimising the losses.
 GAIL Network

The source of gas to AGL is Hazira-Bijapur-Jagdishpur pipeline which passes

through Jagoti. From Jagoti GAIL has has laid another subsidiary pipeline Jagoti-
Indore-Pithampur to supply natural gas to this region.
A regasification terminal is located in Hazira owned by Shell and Total. The major
source of gas is Qatar.

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 Aavantika Mother Station
Mother station consists of a skid (which is a tapping on GAIL pipeline to AGL
Network), 2 compressors, an odorising unit, a storage cascade unit, an Light
Commercial Vehicle (LCV) filling point and a clubbed CNG filling station which has
2 dispensers.

Cascade
Cascade refers to storage in the form of batch of cylinders laid parallel to each
other. The mother station has a cascade of 45 cylinders, each with capacity of 75
Water litres.
Light Commercial Vehicle (LCV)
Light Commercial Vehicle is a carrier vehicle which has cascading storage. This is
used to transfer CNG to daughter Station. The LCV is filled directly from the
compressor at a pressure of 250 bar.
Compressor
A compressor is a mechanical device which increases the pressure of gas by
reducing its volume. The compressors used in CGD industry are 3 stage
reciprocating compressor which can be either motor driven or engine driven. It
compresses 600SCMH of gas and motor is of 110KW.

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 Compressor Setup at Mother Station

Inside view showing compression unit and vibration sensor

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 CO2 Ejector

Gas Detector

Smoke Detector

Priority Panel

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 Previously shown images depict locations of various safety devices like smoke
detectors, flame detector and gas detector.
The priority panel plays a very vital role in automatically switching supply of the
compressed gas towards dispensers, Cascade and LCV filling point. The
compressor has 7 outlets of compressed gas, 4 dedicated to 2 dispensers, 2
dedicated to LCV filling point and 1 for storage cascade.
 Types of Station
There are 4 types of stations-
Mother Station- Mother station is the source station from where the Natural
Gas is taken to DPRS and then further distributed throughout the CGD Network.
It is also responsible for filling up mobile cascade.
Online Station- The CNG station which takes its input from the 19 bar pipeline
and compresses it to 250 and delivers it to customers via dispensers.
Daughter Station- A daughter station is one which does have the direct
connectivity of natural gas via pipeline. The gas is distributed through cascade.
Daughter Booster Station- It is similar to daughter station but is equipped with a
booster compressor between cascade and dispenser which increases the
pressure above 200 bar (which is the optimum required pressure).

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 District Regulatory System (DRS)

District Regulatory System is also known as Distribution Pressure Regulation

Station (DPRS). It is a set of valves, reducer, filters and metering equipment
which distributes the gas received from GAIL via skid to the rest of the network.
It also has overpressure protection devices. One offshoot of DPRS is directed
towards CGD in which 19 bar pressure reduced to 4 bar, another offshoot is
directed towards compressor units to increase pressure from 19 bar to 250 bar
for CNG filling.

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 Hourly Consumption Pattern on Non Working
Day
1.6

1.4

1.2
Consumption in SCM

0.8

0.6 Consumption
0.4

0.2

0
10AM
11AM
12PM

10PM
11PM
12AM
1PM

3AM
6AM
7AM
8AM
9AM

2PM
3PM
4PM
5PM
6PM
7PM
8PM
9PM

1AM
2AM

4AM
5AM
Time

Hourly Consumption Pattern on Working Day

16.00

14.00

12.00
Consumption in SCM

10.00

8.00

6.00 Consumption
4.00

2.00

0.00

Time

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Marketing Department
It is concerned with business expansion, billing, installation and sales.

The customers can be classified as follows-

 Industrial Customers- These are consumers which use PNG for heating
purposes like dryers, gas oven etc. The pressure delivered to them varies
as per demand. Some consumers which consume upto 3000 SCM also
have 4 bar pressure supply (no pressure regulation). The security deposit
varies as per consumption. The billing is done fortnightly. The rate per
unit is Rs. 40+ VAT (almost twice of domestic consumers). The
consumption for a new connection is calculated as per industry standard
or by net calorific value of previously used fuel (wood, coal, diesel, FO).

Isolation Valve

Meter

Regulator

Isolation Valve

Setup at a Dal Mill

 Commercial Customers
These customers use PNG for economic activity but are usually in service
industry like restaurants. The rate charged to them is same as industrial
customers.

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 Domestic Customers

Leaflet for Domestic PNG advertisement

The domestic PNG users are households, which consume about
15-20 SCM per month. They get 21 mili bar supply and are billed on a
monthly basis. The charge per unit is Rs.22 (including Taxes). The charges
for connection are

Security Deposit (Refundable) 4500

Consumption Charges (Refundable) 1000
Registration Charges 500
Total Rs 6000

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 Conclusion

The natural gas which arrives in the form of LNG at terminals are re-gasified and transported
using pipelines. The pipeline network is operated by GAIL. GAIL has also laid a subsidiary
pipeline connecting the Major HVJ pipeline at Jagoti. This pipeline extends from Jagoti to
Pithampur. The PSUs HPCL and GAIL has formed a JV company named Aavantika Gas Ltd
(which is currently not a PSU) for city gas distribution in Madhya Pradesh. The Natural Gas
is converted to PNG and CNG by changing its pressure using reducers and compressors. The
CNG is used for vehicles and PNG is consumed by commercial, industrial and domestic users
at different pressures.
The projects department is concerned with laying of pipeline network throughout the city.
The same is contracted and overlooked by the project department. MDPE, HDPE and steel
pipes are laid in the network. The methods used for drilling are HDD, moling and trenching.
The laid pipeline is then tested using compressed air, cleaned using nitrogen and then
charged.
The Operations and Maintenance department maintains the network and take care of the
faults and uncertainties. The maintenance of compressors and functioning of the dispensers
at various stations (Mother, daughter and online) is overlooked by this department. The
maintenance of the compressor and dispensers is also subcontracted. The DRS or the
district regulatory system also comes under O&M department. The total billed Natural gas
and supplied natural gas are not equal as the network incurs losses in the form of leakages
because of improper commissioning of joints, MDPE losses and unauthorised construction
activities.
The marketing department links customers and potential customers with the company. It
takes care of the expansion of business, billing and installation. The department deals with
domestic, commercial and Industrial accordingly and has separate approaches and
guidelines to convert a potential customer to customer.
The CNG is the cash cow for the company, Industrial and commercial PNG customers also
breakeven early and start generating significant revenue. But domestic PNG customers are
necessary evil, it is good for the nation but not good for a company as they take 12-15 years
to breakeven but consuming LPG for domestic purposes is even worse. Thus GOI pushes to
expand PNG among domestic customers.

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