Oil Minister Dharmendra Pradhan on Monday said as many as 5,000 plants for extracting biogas from agricultural residue, cattle dung and municipal solid waste are envisaged to be set up in the country in next five years at a massive Rs 1.75 lakh crore investment.

New Delhi: Oil Minister Dharmendra Pradhan on Monday said as many as 5,000 plants for extracting biogas from agricultural residue, cattle dung and municipal solid waste are envisaged to be set up in the country in next five years at a massive Rs 1.75 lakh crore investment.

Pradhan announced that state-owned fuel marketing companies will purchase all the bio-gas from these plants at Rs 46 per kg in a bid to cut reliance on imports for meeting oil needs.

India is more than 81 per cent dependent on imports for meeting its oil needs and the move to use biogas extracted from waste/bio-mass sources like agriculture residue, cattle dung, sugarcane press mud, municipal solid waste and sewage treatment plant waste is aimed at cutting that.

"We are today inviting Expression of Interest (EoI) from producers to offer compressed bio-gas (CBG) that oil companies can use as a fuel for transportation," he said at the launch event here. CBG so offered will replace compressed natural gas (CNG) currently used in buses, cars and autos.

"The price of Rs 46 per kg that is being offered is more than the domestic natural gas price. Plus 100 per cent offtake guarantee is being offered," he said. Of the 146 million standard cubic meters per day of natural gas consumed in the country, 56 per cent is imported.

Pradhan said there is a potential to produce 62 million tonnes of CBG from wastes and its usage would lift the share of natural gas in the energy basket from current 6-7 per cent. As many as 5,000 CBG plants are envisaged to be set up in the private sector that will generate 75,000 direct employment, he said.

"This will involve an investment of Rs 1.75 lakh crore. Together, Rs 70,000 crore investment envisaged in rollout of city gas distribution (CGD) network in the 86 cities auctioned in the latest round, would take the total to Rs 2.5 lakh crore, equal to the investment in the glamourous telecom sector," he said.

The CGD networks in 86 new cities will help expand the number of CNG stations from current 1,500 to 10,000 in five years and more than double the piped natural gas connection to household kitchens to 2.5 crore, he said. The EoI, he said, is valid till March 31, 2019 but the first CBG plant can start within this quarter.