Summer Internship Report

On

Procurement Management and its Implementation in CGD Business

Training undertaken at

In the partial fulfillment of the Degree of

Master of Business Administration

Submitted by

Siddharth Trivedi – 20181050

Under the guidance of

Professor Sudhir Yadav

School of Petroleum Management

Submitted

To

Mr Bivek Singh

Asstt Manager (C&P)

IRM Energy Private Limited

School of Petroleum Management

Pandit Deendayal Petroleum University, Gandhinagar
Contents
TABLE OF FIGURES .................................................................................................................................. 4
PREFACE ..................................................................................................................................................... 5
CERTIFICATE FROM THE INSTITUTE................................................................................................... 6
ACKNOWLEDGEMENT ............................................................................................................................ 7
EXECUTIVE SUMMARY .......................................................................... Error! Bookmark not defined.
What is natural gas? ...................................................................................................................................... 9
How did natural gas form? ........................................................................................................................ 9
Where is natural gas found? ....................................................................................................................10
How do we find natural gas? ......................................................................................................................10
Drilling natural gas wells and producing natural gas ..............................................................................11
Natural gas is processed for sale and consumption .....................................................................................12
Delivery of natural gas to customers...........................................................................................................13
Processing natural gas for transportation by pipeline .............................................................................13
Introduction to the Industry ........................................................................................................................15
City Gas Distribution network in India .......................................................................................................17
Infrastructure: City Gas Distribution Network ...........................................................................................21
City Gate Station (CGS) .........................................................................................................................21
Industrial Pressure Reduction Station (IPRS) .........................................................................................22
District Regulating Station (DRS) ..........................................................................................................22
About IRM Energy Private Limited............................................................................................................23
Geographical Areas .....................................................................................................................................25
 Banaskantha Gujarat .......................................................................................................................25
 Fatehgarh Sahib Punjab ..................................................................................................................26
 Diu, Gir & Somnath ........................................................................................................................27
Business of IRM .........................................................................................................................................28
Gas Pipeline Connectivity and Gas Supply ............................................................................................28
Business Exclusivity ...............................................................................................................................28
CNG ........................................................................................................................................................28
Benefits of CNG ................................................................................................................................. 29
PNG DOMESTIC ...................................................................................................................................31
What is PNG? ..................................................................................................................................... 31
Benefits of PNG .................................................................................................................................. 31
PNG COMMERCIAL ............................................................................................................................33
Commercial Customers ....................................................................................................................... 33
Non-Commercial Customers............................................................................................................... 33
PNG INDUSTRIAL................................................................................................................................33
Few Industrial applications of Natural Gas:........................................................................................ 33
Table of Figures

Figure 1: Petroleum & natural gas formation ............................................................................................... 9

Figure 2: Schematic geology of natural gas resource ................................................................................. 10

Figure 3:Process of seismic exploration ..................................................................................................... 12

Figure 4: Natural gas production & delivery .............................................................................................. 13

Figure 5:Changes in gas distribution .......................................................................................................... 16

Figure 6:Next growth cycle in CGD ........................................................................................................... 16

Figure 7:Banaskantha district geographical area ........................................................................................ 25

Figure 8:Fatehgarh sahib district geographical area ................................................................................... 26

Figure 9: Geographical area Diu and Gir Somnath districts ....................................................................... 27

PREFACE

This report has been submitted as a part of Summer Internship Project undertaken at IRM Energy
Private Limited, in the partial fulfillment of degree of Master of Business Administration at School
of Petroleum Management, Pandit Deendayal Petroleum University, Gandhinagar.

The report documents the work done at IRM Energy Private Limited, Corporate Office for the
duration of ten weeks, for the project titled, “Procurement Management and its implementation in
CGD Business” under the supervision of Mr Bivek Singh, Assistant Manager (C&P) , IRM Energy
Private Limited.

It is important to know how much the goods or services are going to cost the organization as part of
the project. In the case of projects where there is a heavy purchasing requirement, the cost of these
items could make up a majority of the overall project budget. Naturally, it will be a goal to
minimize the total costs while still getting exactly what is needed.
Nothing in business should be done without a contract, especially when it comes to a purchase
agreement between two organizations. If you are going to trust a supplier to become part of your
project team, you will want a contract in place that outlines their responsibilities and the price you
have agreed to pay. Even if you are dealing with people whom you feel like you can trust, there is
no excuse for not having the legal documentation in place to protect your interests at every turn.
Putting procurement contracts in place can often be considered one of the last steps before a project
gets started. At this point, you will have committed to buying a certain level of whatever goods or
services you need to undertake the project, so the wheels are now in motion to get it going. Timing
is an important element of this whole process, so bringing together the formalization of contracts in
concert with the start of the project itself is something to pay attention to. It may take a little bit of
back and forth between the organizations before the contracts are satisfactory to all involved, so
make sure to build negotiating time into the schedule.
CERTIFICATE FROM THE INSTITUTE

This is to certify that the Project Report titled “Procurement Management and its
implementation in CGD Business” is a bona fide work carried out by Mr. Siddharth
Trivedi of MBA 1st year of School of Petroleum Management, Pandit Deendayal Petroleum
University, Gandhinagar, Gujarat as a fulfillment of MBA Degree. The summer internship
th nd
has been completed with IRM Energy Private Limited from 8 April 2019 to 22 June

2019. He has worked under my guidance and satisfactorily completed his project work.

Place: Gandhinagar Signature of Guide Signature of Director

Date: 10 July 2019 (Prof Sudhir Yadav) (Dr. C. Gopalkrishnan)

ACKNOWLEDGEMENT

No great endeavor is successful and accomplished without some helping hands. Every task
needs some guidance, encouragement and assistance for its completion and fulfilment. I
would like to take this opportunity to thank all who contributed directly or indirectly in
preparation of this project.

I hereby take this opportunity to sincerely thank the authorities of IRM Energy Private
Limited for taking me as an intern under the kind mentorship of Mr Bivek Singh (Asstt
Manager, C&P) and for providing a very conducive work environment. I would like to
extend my sincere gratitude towards the entire team of IRM Energy Private Limited who
directly or indirectly played a significant role in my learning associated with the summer
internship.

Finally, I would like to extend my vote of thanks to my faculty mentor at School of

Petroleum Management, Prof Sudhir Yadav for his valuable support and guidance
throughout the project.

Under Guidance of Prepared By

Mr Bivek Singh Mr. Siddharth Trivedi (20181050)

Asstt Manager MBA – Energy & Infrastructure

(C&P) School of Petroleum Management

IRM Energy Pvt Ltd Pandit Deendayal Petroleum University

Corporate Office Gandhinagar

Mo: Mo: +91-7021547471

EXECUTIVE SUMMARY

Procurement management follows a logical order. First, plan what needs to be contracted; then plan
how it’s to be done. Next, send out contract requirements to sellers. They bid for the chance to work
with the organization. Pick the best one and then sign the contract with them. Once the work begins,
monitor it to make sure that the contract is being followed. When the work is done, close out the
contract and fill out all the paperwork.

Organization needs to start with a plan for the whole project. Before doing anything else, need to
think about all of the work that will be contracted out for the project. Plan for any purchases and
acquisitions. Take a close look at organization’s needs to be sure that contracting is necessary.
Figure out what kinds of contracts make sense for the project, and try to define all of the parts of
the project that will be contracted out.

Contract planning is where each individual contract for the project work needs to be planned. Work
out how to manage the contract, what metrics it will need to meet to be considered successful, how
to pick a seller, and how to administer the contract once the work is happening.
What is natural gas?

Natural gas is a fossil energy source that formed deep beneath the earth's surface. Natural gas
contains many different compounds. The largest component of natural gas is methane, a compound
with one carbon atom and four hydrogen atoms (CH4). Natural gas also contains smaller amounts
of natural gas liquids (NGL; which are also hydrocarbon gas liquids), and non hydrocarbon gases,
such as carbon dioxide and water vapor. We use natural gas as a fuel and to make materials and
chemicals.

How did natural gas form?

Millions to 100’s of millions of years ago and over long periods of time, the remains of plants and
animals (such as diatoms) built up in thick layers on the earth’s surface and ocean floors, sometimes
mixed with sand, silt, and calcium carbonate. Over time, these layers were buried under sand, silt,
and rock. Pressure and heat changed some of this carbon and hydrogen-rich material into coal, some
into oil (petroleum), and some into natural gas.

Figure 1: Petroleum & Natural gas formation

Where is natural gas found?

In some places, natural gas moved into large cracks and spaces between layers of overlying rock.
The natural gas found in these types of formations is sometimes called conventional natural gas. In
other places, natural gas occurs in the tiny pores (spaces) within some formations of shale,
sandstone, and other types of sedimentary rock. This natural gas is referred to as shale gas or tight
gas, and it is sometimes called unconventional natural gas. Natural gas also occurs with deposits of
crude oil, and this natural gas is called associated natural gas. Natural gas deposits are found on
land and some are offshore and deep under the ocean floor. A type of natural gas found in coal
deposits is called coal bed methane.

Figure 2: Schematic geology of natural gas resource

How do we find natural gas?

The search for natural gas begins with geologists who study the structure and processes of the earth.
They locate the types of geologic formations that are likely to contain natural gas deposits.
Geologists often use seismic surveys on land and in the ocean to find the right places to drill natural
gas and oil wells. Seismic surveys create and measure seismic waves in the earth to get information
on the geology of rock formations. Seismic surveys on land may use a thumper truck, which has a
vibrating pad that pounds the ground to create seismic waves in the underlying rock. Sometimes
small amounts of explosives are used. Seismic surveys conducted in the ocean use blasts of sound
that create sonic waves to explore the geology beneath the ocean floor.
If the results of seismic surveys indicate that a site has potential for producing natural gas,
an exploratory well is drilled and tested. The results of the test provide information on the quality
and quantity of natural gas available in the resource.

Drilling natural gas wells and producing natural gas

If the results from a test well show that a geologic formation has enough natural gas to produce and
make a profit, one or more production (or development) wells are drilled. Natural gas wells can be
drilled vertically and horizontally into natural gas-bearing formations. In conventional natural gas
deposits, the natural gas generally flows easily up through wells to the surface.
In the United States and in a few other countries, natural gas is produced from shale and other types
of sedimentary rock formations by forcing water, chemicals, and sand down a well under high
pressure. This process, called hydraulic fracturing or fracking, and sometimes referred to as
unconventional production, breaks up the formation, releases the natural gas from the rock, and
allows the natural gas to flow to and up wells to the surface. At the top of the well on the surface,
natural gas is put into gathering pipelines and sent to natural gas processing plants.
Figure 3:Process of seismic exploration

Natural gas is processed for sale and consumption

Natural gas withdrawn from natural gas or crude oil wells is called wet natural gas because, along
with methane, it usually contains NGL—ethane, propane, butanes, and pentanes—and water vapor.
Wellhead natural gas may also contain nonhydrocarbons such as sulfur, helium, nitrogen, hydrogen
sulfide, and carbon dioxide, most of which must be removed from natural gas before it is sold to
consumers.
From the wellhead, natural gas is sent to processing plants where water vapor and nonhydrocarbon
compounds are removed and NGL are separated from the wet gas and sold separately. Some ethane
is often left in the processed natural gas. The separated NGL are called natural gas plant liquids
(NGPL), and the processed natural gas is called dry, consumer-grade, or pipeline quality natural
gas. Some wellhead natural gas is sufficiently dry and satisfies pipeline transportation standards
without processing. Chemicals called odorants are added to natural gas so that leaks in natural gas
pipelines can be detected. Dry natural gas is sent through pipelines to underground storage fields or
to distribution companies and then to consumers.
In places where natural gas pipelines are not available to take away associated natural gas produced
from oil wells, the natural gas may be reinjected into the oil-bearing formation, or it may be vented
or burned (flared). Reinjecting unmarketable natural gas can help to maintain pressure in oil wells
to improve oil production.
Coal bed methane can be extracted from coal deposits before or during coal mining, and it can be
added to natural gas pipelines without any special treatment.

Figure 4: Natural gas production & delivery

Delivery of natural gas to customers

Delivering natural gas from natural gas and oil wells to consumers requires many infrastructure
assets and processing steps, and it includes several physical transfers of custody.

Natural gas delivery infrastructure can be grouped into three categories:

 Processing
 Transportation
 Storage

Processing natural gas for transportation by pipeline

Natural gas transported on the mainline natural gas transportation system must meet specific quality
measures so that the pipeline network (or grid) can provide uniform quality natural gas. Wellhead
natural gas may contain contaminants and hydrocarbon gas liquids (HGL) that must be removed
before the natural gas can be safely delivered to the high-pressure, long-distance pipelines that
transport natural gas to consumers.

A natural gas processing plant typically receives natural gas from a gathering system of pipelines
from natural gas and oil wells. Natural gas processing can be complex and usually involves several
processes, or stages, to remove oil, water, HGL, and other impurities such as sulfur, helium,
nitrogen, hydrogen sulfide, and carbon dioxide. The composition of the wellhead natural gas
determines the number of stages and the processes required to produce pipeline-quality dry natural
gas. These stages and processes may be integrated into one unit or operation, be performed in a
different order or at alternative locations (lease/plant), or not be required at all.

The basic stages of natural gas processing/treatment are

 Gas-oil-water separators: Pressure relief in a single-stage separator causes a natural

separation of the liquids from the gases in the natural gas. In some cases, a multi-stage
separation process is required to separate the different fluid streams.
 Condensate separator: Condensates are most often removed from the natural gas stream at
the wellhead with separators much like gas-oil-water separators. The natural gas flow into
the separator comes directly from the wellhead. Extracted condensate is sent to storage
tanks.
 Dehydration: A dehydration process removes water that may cause the formation of
undesirable hydrates and water condensation in pipelines.
 Contaminant removal: Nonhydrocarbon gases—such as hydrogen sulfide, carbon dioxide,
water vapor, helium, nitrogen, and oxygen—must also be removed from the natural gas
stream. The most common removal technique is to direct the natural gas though a vessel
containing an amine solution. Amines absorb hydrogen sulfide and carbon dioxide from
natural gas and can be recycled and regenerated for repeated use.
 Nitrogen extraction: Once the hydrogen sulfide and carbon dioxide are reduced to
acceptable levels, the natural gas stream is routed to a Nitrogen Rejection Unit (NRU),
where it is further dehydrated using molecular sieve beds.
 Methane separation: The process of demethanizing the natural gas stream can occur as a
separate operation in a natural gas processing plant or as part of the NRU operation.
Cryogenic processing and absorption methods are some of the ways used to separate
methane from HGL.
 Fractionation: Fractionation separates the HGL into component liquids using the varying
boiling points of the individual HGL. HGL from the processing plant may be sent to
petrochemical plants, oil refineries, and other HGL consumers.
Introduction to the Industry
India today has a vast network of underground pipelines being used for transportation and
distribution of natural gas. Big power plants, fertilizer plants & other industrial enterprises are the
main consumers of natural gas as on today. However, with the increase in its popularity, it is now
being used in the domestic sector as well as a fuel in the automotive sector in the big metropolitan
cities. To take the gas to such end users who are located within the boundaries of a main city,
there’s need to build up city gas distribution pipeline networks. Such networks have already been
developed in the cities of Delhi, Mumbai, Vadodara, Surat, Agra/Firozabad, Kanpur and many more
such networks are being planned in the near future. Looking at the available infrastructure and
layout in typical Indian cities, it becomes a difficult task to build up such a city gas distribution
networks in the absence of separate corridors for the competing utilities. Depending upon the
pressures, flow and economic criteria, these networks can either be constructed using steel
pipelines, polyethylene (PE) pipes or a hybrid system of both PE & steel pipelines.

Unlike cross-country pipelines which runs straight for kilometers through open fields, city
gas distribution network are more complex in nature. These are laid in densely populated
areas and there are a large number of branches in the network catering to the need of users in
different localities within a city. Though, these are much smaller in length and size than
cross-country pipelines, the network in a city is much more distributed and varied. Increased
number of branches means more number of joints, bends, reducers, fittings etc. in the network
apart from more number of delivery points for the supply of natural gas. Coupled with all
these factors, the pipelines have to pass through the congested areas within the city criss-
crossing the various other underground utilities. Due to the various activities by third party/
other agencies within the city area, the risk of damages and accidents is all the more high as
compared to cross-country pipelines. All these factors call for greater in-built safety systems
in the network and the need of special preparedness to handle any emergency situation.
Figure 5: Changes in gas distribution

Figure 6: Next growth cycle in CGD

City Gas Distribution network in India

Oil India Limited was first to start distribution of gas in Assam in 1960’s. In Gujarat, Oil and
Natural Gas Corporation (ONGC) started selling its associated gas to the neighboring
industries in 1970’s.With the find of Oil / Gas at Mumbai high, supply of gas commenced to
industrial consumers around Mumbai like MSEB, Tata and RCF. The gas pipeline networks
were laid / owned by either ONGC or the customers.
With the gas discovery in south basin of Mumbai shores, the first cross country pipeline in
India was conceptualized with Hazira as the landfall point in Gujarat. Gas Authority of India
(GAIL) was formed in 1984, to act as a nodal agency for natural gas in India. GAIL
constructed and operated this pipeline, which ran from Hazira to Jagdishpur via Bijaipur.
This pipeline supplied gas to the fertilizer and power sector. Thereafter, entire existing assets
of ONGC and development of new networks were transferred to GAIL.

As a pilot project first city gas distribution project was taken up with the help of ONGC at
Vadodara city in 1972. Historically due to scarcity of natural gas vis a vis demand, the supply
of gas to other cities like Mumbai and Delhi, projects did not take off in absence of adequate
gas allocation.

Gujarat Gas Company Ltd. (GGCL) was the first commercial city gas distribution company
in India. GGCL in association with British Gas developed distribution network in Bharuch
and Ankleshwar cities. Subsequently, they expanded their network to Surat. Mahanagar Gas
Limited (MGL) started city gas distribution to domestic, commercial and industrial customers
in Mumbai in 1995. The focus of the company was to supply gas to domestic households and
to transport sector and in an event of surplus cater to the industrial demand. Indraprastha Gas
Limited (IGL) started city gas distribution to domestic, commercial and transport sector
customers in Delhi in 1998. The focus of the company was to supply gas to transport sector.

As on date, gas is available in 41 cities in India and in another 14 cities establishment of gas
pipeline network is in project stage. With the availability natural gas in various cities in India,
it has become the most sought after fuel in the country. There are about 0.60 million vehicles
running on CNG and over 0.85 million households are connected with piped natural gas in
India. Internationally as well as domestically, the use of natural gas has been increasing
steadily for several reasons viz. price advantage, environmental concerns, fuel diversification
and/or energy security issues, market deregulation (for both gas and electricity). With the
improvement in availability of gas and related pipeline infrastructure, several city gas
distribution projects are going to come up in near future. As per the available estimates, as
many as 150 cities are going to be connected with the gas pipeline network in India in next
five years to come which will further expand to 250 cities in the next ten years. Total length
of natural gas pipeline network including the trunk lines and city distribution networks in
about 8000 kms and there are 20 different companies involved in the operations and
development of City Gas Distribution Network in India. The four major sectors identified for
the city gas distribution in India are:

1. Transport Sector
2. Domestic Sector
3. Commercial Sector
4. Industrial Sector

Domestic, Commercial and Industrial Sectors use Piped Natural Gas (PNG) where as the
Transport Sector use Compressed Natural Gas.
Infrastructure: City Gas Distribution Network

The primary network of steel pipelines provides the core backbone connecting CGS to
various DRS. The pressure levels for primary network are between 26 bar(g) to 19 bar(g).
While most of the industrial customers are not required to be supplied at this pressure
level, only a select few units have specific requirement for medium pressure delivery
would be connected to through this network. The design of the primary network is based
on the demand forecast to be catered. Secondary network system consisting of MDPE
pipelines operates at pressure level between 4 bar(g) to 1 bar(g). MDPE pipeline network
is planned for cluster of industrial, commercial or domestic units at low pressure. The
secondary network is normally developed with MDPE pipes. Using the domestic / small
commercial quantity and large commercial quantity values, and additional information,
including location of customers, pressure requirements at major customers, availability of
existing supply, and geographic features, optimum method of supply is determined and
the network is designed and constructed accordingly.

The supply facilities include the following:-

 High pressure Steel pipeline main
 Medium pressure Steel pipelines
 Low pressure MDPE mains
 Low pressure MDPE services
 CGS/ DRS / Hot Taps
 Service Connections
 Odorisation Facilities

Various stations involved in the Network

 City Gate Station (CGS)
 Pressure Reduction Station (PRS)
 District Regulating Station (DRS)

City Gate Station (CGS):

CGS for the network is normally located at Tap off point of the main transmission line
or else connected by a spur line to the main transmission line. The CGS has an inlet
supply mains from the transmission pipeline, a pressure reduction system, a filtering unit,
gas chromatograph and metering, odorant injection system and associated piping along
with various monitoring and control systems. The gas transported at city gate station is at
a high pressure. The pressure reduction facility comprises pressure regulator runs with
standby units, each having an active /monitor regulator, each fitted with `slam-shut’
protection facilities. In addition, provision can be made for natural gas pre-heaters, as per
the design requirements. It is recommended that a CGS be located in a fenced off secure
area. To supply the remainder of the distribution system from the 26 bar maximum
transmission pressure system, `DRS’ is required. The DRS will be similar in design to the
City Gate with different capacity, except no allowance is normally required for gas
heating.

Industrial Pressure Reduction Station (IPRS):

IPRS for the network is located in major Industries. It has a pressure reduction system, a
filtering unit, Turbine metering system, valves etc. Based on the consumption profile of
the user, customized arrangements are designed with metering arrangement. The IPRS has
slam shut valves, pressure regulating valves, creep relief valve and vent, isolation valves,
non-return valves and pressure gauges.

District Regulating Station (DRS):

DRS for the network is located at strategic locations which are sometimes also known as
field regulating stations to meet various demand centers for Domestic/ Industrial segment.
It too has a pressure reduction system, a filtering unit, Turbine metering system, valves
etc. Based on the consumption profile of cluster of users, customized arrangements are
designed with online metering arrangement. The DRS too has a slam shut valves,
pressure regulating valves, creep relief valve and vent, isolation valves and no-return
valves. Basically there are three sections that describe the purpose and different
component of stations located at a pressure levels interface
 The City Gate : interface between High Pressure and Medium Pressure;
 The Pressure Reducing Station : interface between Medium Pressure and Low
Pressure
 The Service Connection: interface between network and end-user pressure.
About IRM Energy Private Limited

IRM was incorporated in December 2015 as a subsidiary of CPL (Cadila Pharmaceuticals Ltd).
The Company is engaged in storing, supplying and distributing natural gas, as well as laying,
operating and maintaining CGD networks. IRM began commercial operations during
1HFY18. A group Company of Cadila Pharmaceuticals Ltd, IRM Energy Pvt Ltd is an
integrated value driven energy enterprise developing Natural Gas distribution projects across
districts in the country for customers in industrial, commercial, domestic and transport sector.
The company is committed towards contributing to the energy need of its consumers.
IREMPL has recently been awarded authorization for implementing City Gas Network CGD
network in the Geographical Areas (GAs) of Banaskantha in the state of Gujarat and Fatehgarh
Sahib in the state of Punjab.

 To be an integrated, value-driven energy enterprise, by realizing the potential of gas,

realizing value from technology, striving for excellence in performance, and contributing

to the Enterprise and Society.


 Achieve sustainable development and highly profitable growth.
 Serve the growing energy needs of our geographical areas.
 Adopt the latest technologies and implement best practices, thus achieving performance.
 Meet and exceed customer expectations in terms of quality and service.
 Maintain high industry standards in Environment, Health and Safety.

 Our sense of duty and responsibility in upholding our commitment towards contributing
to the well-being of peoples and geographies wherever we operate.
Geographical Areas

 Banaskantha Gujarat

Banaskantha district is located in the Northeast part of Gujarat with an area of 10,668 Sq km. As
per 2011 Census, the population of the district is around 3.12 million. Banaskantha shares its
borders with Rajasthan state in the North, Sabarkantha district in East, Kutch district in West and
Patan district and Mehsana district in the South.

Figure 7: Banaskantha District Geographical Area

  Fatehgarh Sahib Punjab
Fatehgarh Sahib is one of the smallest districts of Punjab. Fatehgarh Sahib District is bounded by
Ludhiana and Ropar in the North, Patiala in the South, parts of Ropar and Patiala in the East and
parts of Ludhiana and Sangrur in the West. It is 50 Kms. towards the west of Chandigarh.
According to 2011 census, the total population of Fatehgarh Sahib District was around is 0.65
million. The total geographical area is about 1146 Sq.km and there are total 5 cities and towns in
this district.

Figure 8: Fatehgarh Sahib District Geographical Area

  Diu, Gir & Somnath
Gir Somnath District is a district of Gujarat, India. It is located on the southern corner of
the Kathiawar peninsula with its headquarters at the town of Veraval. Veraval has a population
around 3.5 lacs.

Gir Somnath District was split from Junagadh district in August 2013, when seven new districts
came into existence in Gujarat.

Veraval, Talala, Sutrapada, Kodinar, Una and Gir-Gadhada are the talukas of Gir Somnath
District.

The Gir Forest is a home of many wildlife creatures including lions, deer, and monkeys. Asiatic
Lions can be only be found in the Gir Forest.

Figure 9: Geographical Area Diu and Gir Somnath Districts

Business of IRM

Gas Pipeline Connectivity and Gas Supply

The gas for Banaskantha and Fatehgarh Sahib is sourced from Dahej and Hazira’s LNG
terminals using Gujarat State Petronet Limited’s spur pipeline and GAIL (India) Limited’s
pipeline, respectively. The pipelines connecting the CGD network are already present.
Moreover, the company has already signed agreements with GAIL (India) for gas supply. Hence,
gas availability for the CGD network is not an issue.

Business Exclusivity

The ratings reflect inherent strengths of the CGD business including infrastructure and
marketing exclusivity. IRM has a five-year district marketing exclusivity and a 25-year
infrastructure exclusivity. Although natural gas is more expensive than alternates, it is a clean
fuel and hence attains regulatory support. IRM expects to have an initial mix of domestic (70%)
and industrial (30%) customers, moderating towards a 60:40 split. The demand from domestic
customers including CNG suppliers for vehicles is generally inelastic to price
changes. Moreover, the company has access to the Delhi-Amritsar and Delhi-Mumbai industrial
corridors, which is likely to form the industrial clientele.

CNG

Compressed Natural Gas, well known as CNG, is natural gas compressed up to 200 Bar pressure
used as an automobiles fuel mainly comprising of Methane (80% to 90%) which is in gaseous
sate. CNG is compressed up to 200 bar pressure to reduce it volume for maximum
accommodation in fuel tank of vehicle. CNG is very popularly termed as “Green Fuel”.
Using CNG as a fuel in automobiles has largely contributed in limiting air pollution caused due
to vehicular exhaust emissions especially in metro cities. Apart from this, CNG has been able to
replace high priced automobile fuels like petrol and diesel.
Benefits of CNG

1. Environment friendly

 It has minimum effect on global warming.

 It helps in reduction of air pollution.

2. Economical

 It is cheaper compared to other automobile fuels.

 It enhances mileage of vehicles.
 It does not contaminate crank oil which increases life of oil.

3. Safe

 It’s lighter than air hence in case of leakage it easily disperses in air.
 It has high auto ignition temperature compared to other fuels.

Types and Components of CNG Stations

 Online Station
 Mother Station
 Daughter Station
 Daughter Booster Station

Online station

It is directly connected with the Natural Gas Pipeline. Presently IRMEPL is receiving natural gas
at a pressure of 4 bar from the MDPE pipeline laid at the downstream of its PRS and then
compressed up to a pressure of 250 bar with the help of a reciprocating compressor in order to
enhance the on board storage capacity of vehicle. Then, it is dispensed to vehicles locally
through CNG dispensers at a pressure of 200 bar.

Typically, a CNG Online Stations consists of following equipments:

• CNG Compressor
• CNG Dispenser
• Storage Cascade

Mother Station

Mother stations are similar to an online station, where it has the facility to refuel the mobile
cascades in addition to the local demand of vehicles .These mobile cascades are then dispatched
to other stations, which do not have the connectivity of pipeline.
Typically a CNG Mother Stations consists of following equipments:
• CNG Compressor
• CNG Dispenser
• Storage Cascade
• Mobile Cascades (LCV)

Daughter Station

Daughter stations do not have the connectivity of natural gas pipeline. At these stations,
compressed natural gas (CNG) is transported through mobile cascades (bunch of cylinders
mounted on trucks) at a pressure of 240-250 bar and then dispensed to vehicles through CNG
dispensers.

Daughter Booster Station

Daughter booster stations are similar to Daughter stations. However, in order to satisfy the
customers w.r.t. amount of gas dispensed as well as filling time, a booster compressor (hydraulic
type with variable suction pressure) is installed in between the mobile storage and the CNG
dispenser. Booster compressor increases the pressure above 200 bar once the pressure of the
mobile cascade falls below 200 bar and works upto the pressure of the mobile cascade falls
below 30 bar. Thus maximum amount of gas stored in the mobile cascade is used at Daughter
Booster station.
GEOGRAPHICAL STATION TYPE
AREA
ONLINE DAUGHTER DAUGHTER
BOOSTER STATION
BANASKANTHA 4 12 3
FATEHGARH SAHIB 2 3
DIU, GIR & SOMNATH
TOTAL 6 15 3

PNG DOMESTIC

What is PNG?

Natural Gas is mainly Methane - CH4 with a small percentage of other higher hydrocarbons. The
ratio of Carbon to Hydrogen is least in Methane and hence it burns almost completely making it
very environment friendly. It is procured from the oil / gas wells and transported through a
network of pipelines.
PNG (Piped Natural Gas) is the natural gas supplied through mild steel (MS) and polyethylene
(PE) pipelines to cater to the natural gas demand of customers in various segments, i.e. Domestic
/ Commercial & Non - Commercial / Industrial segments.

Benefits of PNG

 More Affordable

Natural gas continues to be the best energy choice, because it costs less than any other energy
source.

 Comfortable
Natural gas water heaters recover twice as fast and have more hot water available than an
electric model.

 Clean

Natural gas is a cleaner burning fuel that has less impact on the environment. High-efficiency
natural gas furnaces are more environmentally friendly than geothermal heat pumps. Natural gas
fireplaces can reduce up to 99% of the amount of pollutants and particles emitted into the air
compared to wood.

 Uninterrupted Supply

IRM Energy Pvt Ltd has got a history of almost 100% reliability in its gas supply. PNG is
assured continuous and reliable
24-hour supply of fuel.
  Useful

Gas is constantly fed into the system so there are no hassles of handling, refilling & changing of
cylinders; no storage required, leading to safe, easy and secure handling. PNG is distributed
through pipelines directly
at premises.

 Cost-effective

Higher savings in comparison to other conventional fuels. Pipeline delivery comparatively

immunizes against inflation of transportation costs. In addition, natural gas provides the
following benefits.

 Safe

Natural gas appliances have a great safety record, and state-of-the-art equipment now has
advanced capabilities like auto-shut off. No storage at customer’s premises ensures high
consumer safety. PNG being lighter than air, hence in case of leakage, it will dissipate rapidly
and avoids spontaneous flammability.
PNG COMMERCIAL

Commercial Customers

Commercial setups / entities like Tea / Snacks shops, restaurants, food courts, hotels, hospitals,
resorts, canteen, hostels, Yarn Heat Setting (Yarn Heat Setting process is the process in textile
industry that takes place between yarn twisting & cloth weaving) etc. are categorized as
Commercial Customers.

Non-Commercial Customers

Charitable Organizations with certificate of Charity Commissioner confirming their charitable

purpose / activities are categorized as Non - Commercial Customers.
At present, the company is supplying PNG to more than 12,750 Commercial and Non
Commercial premises across the state.

PNG INDUSTRIAL

PNG’s widespread acceptance across most of the Industrial sectors is owing to its: on-tap
availability - zero storage required, ease of usage, no spillage or pilferage, free from adulteration,
no/minimum maintenance required, increased life of equipment, clean to burn, higher burning
efficiency, better product quality, accuracy of measurement & available on credit.

Few Industrial applications of Natural Gas:

 Metal

 Heat Treatment
 Molding/ Casting
 Fabrication
 Gas Cutting
 Pre-heating of ingots
 Powder Coating
 Smelting
 Welding
 Pyro processing
 Forging
 Melting
 Pharmaceuticals
 Steam Generation
 Spray Drying
 Food & Beverages

 Steam Generation
 Baking
 Process Heating

 Printing & Dyeing

 Drying of inks Pre-printing

 Pre Drying of inks Post-printing

 Oil Mills

 Steam Generation
 Distillation
 Refining

 FMC Product Manufacturers

 Steam Generation
 Waste Heat Treatment

 Power Generation
 Micro Gas Turbines
 Gas Gensets
 Combined Cooling, Heating & Power

 Air Conditioning
 Vapor Absorption Machine (VAM)
 Centralized Cooling

 Ceramics

 Spray Drying
 Kiln

 Dairy

 Boiler
 Air Heater

 Chemicals
  Boiler
 Dryer
 Incinerator

Benefits for Industrial Customers

 Cost of NG is very Low as compared to Any Liquid/LPG Fuel, Resulting in Huge

Savings.

 Any Investment for NG Can Be Easily Recovered in Short Span of Time, thereafter
Recurring Saving on Permanent Basis.
 No Storage Required.
 Uninterrupted Supply (24 Hours).
 Convenient, Hassle Free, No daily liasioning.
 No spillage and pilferage & Handling losses are Zero.
 Environment Friendly, Effective in Pollution Control.
 Enhances Life of Plant, Machinery & Equipment - Lower maintenance cost.
 Efficient & Safe Fuel with Smooth Plant Operations.

Contracts & Procurement

Objective

The objective of the Contracts & Procurement functions is to be able to provide the
required equipment / material / services of the right quality in right quantity at the right
price so as to reach the specified place at the right time and to be able to execute works at
site in required sequence and as per schedules allowing fair and equal opportunity of
bidding to all competent bidders, subject to the management's guidelines in respect of
Works / Procurement Policy.
Procurement

Figure 10: Procurement Process

Identification of responsibilities
The division of responsibility of contracts/orders management (both pre-award and post
award) between various departments / groups vested with the overall responsibility of
ex ecution of various projects of the Company, at various locations is summarized below.
This division of responsibility is only for guideline so that confusion in day to day
functioning, may be avoided for reasons of overlapping of functional requirements and lack
of clarity in that respect.

Procurement Policy followed by Government Companies (example taken of GAIL Gas

India Ltd)
Sr Responsibility Centre
No. Activity Group/Deptt – Gail Gas For projects where
consultants are
engaged
1 Timing of raising indent/PR/SR Project/Indentor/User Consultant
Deptt
2 Packaging of material/eqpt/work Project/Indentor/User Consultant
Deptt
3 Sanction for expenditure Project/Indentor/User Consultant
Deptt
4 Scope and specifications Project/Indentor/User Consultant
Deptt
5 Time schedule / delivery reqmt Project/Indentor/User Consultant
Deptt
6 Cost estimate Project/Indentor/User Consultant
Deptt
7 Pre-tender conference Project/Indentor/User Consultant
Deptt. with support from
C&P and F&A, if required
8 Bid Evaluation Criteria(BEC) (qualification/eligibility requirements)
a. Technical aspects Project/Indenting/ User Consultant
Deptt
b. Financial aspects F&A and C&P Consultant
 c. General compliance to C&P Consultant
procedure
9 Contractual conditions
a. General C&P Consultant
b.Specific/special Project/Indentor/User Consultant
Deptt
10 Fixing of Bid security/EMD C&P Consultant
amount
11 Fixing cost of tender/bidding C&P Consultant
document
12 Preparation of bidding C&P Consultant
document
13 Vetting of tender documents C&P to co-ordinate for C&P to co-ordinate for
vetting by F&A and vetting by F&A and
Technical group. with Technical group. with
External Funding Agency External Funding
Agency
14 Issue of NIT/Tender/Bidding C&P Consultant
doc
15 Queries raised by bidders during sale period of tenders prior to opening of tenders
a. Technical To be commented by Consultant
technical deptt. &
responded by C&P
C&P (in consultation with Consultant
F&A, if required)
b. Commercial
16 Pre-Bid Conference C&P with participation of Consultant with
Project/Indenting/ User participation of Projects,
Deptt C&P and F&A
17 Receipt, opening and C&P Consultant
distribution
of bids
18 Custody of EMD/Bid security C&P (Bank Guarantees) Consultant
received upto finalization of F&A (Demand
award Drafts/Banker’s Cheques)
19 Checking Bank Guarantees for F&A Consultant
its acceptability
20 Formation of tender committee C&P
21 Issue of TQ/CQ to C&P with Consultant
bidders/correspondence /with participation/inputs of
bidders on any aspects related to Project/Indentor/User
bid Deptt. and F&A deptt.
22 Technical including scope of Project/Indentor/User Consultant
supply, works & services Deptt
offered
 in the bid, checking compliance
to technical criteria of BEC &
preparation of technical bid
analysis (TBA)
23 Commercial terms & conditions, C&P Consultant
checking compliance to
financial criteria including
preparation of commercial bid
analysis (CBA)
24 Vetting of commercial bid F&A Consultant
analysis (CBA)
25 Recommendation for price bid To be coordinated by C&P To be coordinated by
opening C&P on receipt of
recommendation from
Consultant
26 Price Bid Opening C&P with representatives Consultant with
of F&A (Projects/ Indentor participation of C&P and
/ User Deptt.- Optional) F&A
27 Price Bid Evaluation C&P in association with Consultant
F&A
28 Price negotiation, if any, after Tender Committee Consultant
approval
29 Finalization of recommendation Tender Committee Consultant
for award
30 Finalization & approval of To be coordinated by C&P To be coordinated by
recommendation from C&P on receipt of
competent recommendation from
authority Consultant
31 Issue of notification for award C&P Consultant for Power of
(of work/issue of FOA etc.) Attorney (POA) cases or
C&P(GAIL Gas Ltd) for
other cases
32 Issue of purchase order/signing C&P. However, Technical Consultant for POA
of contract specifications to be cases/C&P on receipt of
confirmed by Indentor. Draft PO from
Consultant including PR.
33 Distribution of PO to all C&P Consultant
concerned
34 Scrutiny & safe custody of F&A (receipt through Consultant to pass on to
performance bank guarantee/ C&P) GAIL Gas Ltd Finance
security deposit Deptt.
through Projects.
35 Return of earnest money C&P in case of BG and Consultant/C&P of
deposits/bid security F&A in case of bank draft GAIL Gas
on advice from C&P
36 Expediting/monitoring of C&P / Projects Consultant/C&P of
acceptance of order by GAIL Gas
vendor/contractor and receipt of
contract performance bank
guarantee/security
deposit/agreement as per
 provisions of contract
37 Post award matters for Engineer –In –Charge Consultant
execution (EIC)
of contracts
38 Purchase orders closure C&P with assistance from Consultant for POA
Indentor/ Projects and cases, remaining by
F&A GAIL Gas C&P , F&A
and Projects on
recommendation of
Consultant
39 Contracts execution (including EIC in consultation with Consultant in association
extra/ AHR/ substituted items Finance. with Project Group and
etc.) associated Finance
40 Closure of contract C&P, Indentor and F&A Projects, C&P and F&A
on recommendation of EIC on recommendation of
Consultant

Procurement Procedure followed by IRM Energy Pvt Ltd

Sr Responsibility
No. Activity Group/Deptt –
IRMEPL
1 Timing of raising indent/PR/SR Project/Indentor/User
Deptt
2 Scope and specifications Project/Indentor/User
Deptt
3 Time schedule / delivery reqmt Project/Indentor/User
Deptt
4 Cost estimate C&P,F&A
5 Bid Evaluation Criteria(BEC) (qualification/eligibility requirements)
a. Technical aspects Project/Indenting/ User
Deptt
b. Financial aspects F&A and C&P
c. General compliance to procedure C&P
6 Contractual conditions
a. General C&P
b.Specific/special Project/Indentor/User
Deptt
7 Fixing of Bid security/EMD amount C&P
8 Fixing cost of /bidding C&P
document
9 Preparation of bidding document C&P
10 Queries raised by bidders during sale period of tenders prior to opening of tenders
a. Technical To be commented by
technical deptt. &
responded by C&P
C&P (in consultation
with
b. Commercial
F&A, if required)
11 Opening of bids C&P
12 Custody of EMD/Bid security C&P (Bank Guarantees)
received upto finalization of F&A (Demand
award Drafts/Banker’s
Cheques)
13 Checking Bank Guarantees for its acceptability F&A
14 Issue of TQ/CQ to C&P with
bidders/correspondence /with participation/inputs of
bidders on any aspects related to Project/Indentor/User
bid Deptt. and F&A deptt.
15 Technical including scope of supply, works & services offered Project/Indentor/User
in the bid, checking compliance Deptt
to technical criteria of BEC &
preparation of technical bid
analysis (TBA)
16 Commercial terms & conditions, C&P
checking compliance to financial criteria including
preparation of commercial bid analysis (CBA)
17 Vetting of commercial bid F&A
analysis (CBA)
18 Price Bid Opening C&P with
representatives
of F&A (Projects/
Indentor
/ User Deptt.- Optional)
19 Price Bid Evaluation C&P in association with
F&A
20 Price negotiation, if any, after Tender Committee
approval
21 Issue of notification for award C&P
(of work/issue of FOA etc.)
22 Issue of purchase order/signing C&P. However,
of contract Technical
specifications to be
confirmed by Indentor.
23 Scrutiny & safe custody of F&A (receipt through
performance bank guarantee/ C&P)
security deposit
24 Return of earnest money C&P in case of BG and
deposits/bid security F&A in case of bank
draft
on advice from C&P
25 Expediting/monitoring of acceptance of order by C&P / Projects
vendor/contractor and receipt of
contract performance bank
guarantee/security
deposit/agreement as per
provisions of contract
26 Post award matters for execution Engineer –In –Charge
of contracts (EIC)
27 Purchase orders closure C&P with assistance
from
Indentor/ Projects and
F&A
28 Contracts execution (including EIC in consultation with
extra/ AHR/ substituted items Finance.
etc.)
29 Closure of contract C&P, Indentor and
F&A
on recommendation of
EIC