The plan is to set up 25 CNG stations in bus depots here to start with, a number which would go up to 65 in phases.
Chief Minister Siddaramaiah said 300 new buses the state would get under the Jawaharlal Nehru National Urban Renewal Mission would be run using CNG.
Karnataka government and GAIL have already formed a 50:50 joint venture to undertake distribution of clean natural fuel for transport and other sectors in various cities of the state.
Siddaramaiah and GAIL Chairman and Managing Director B C Tripathi said gas would be supplied from Dabhol-Bangalore gas pipeline to the proposed the 700 mw gas-based Bidadi power plant and to the 450 mw Yelahanka plant, currently shut because of pollution issues but would now be restarted to run by gas.
Union Petroleum and Natural Gas Minister M Veerappa Moily said an additional pipeline would be laid, a diversion of the Dabhol-Bangalore gas pipeline from Chitradurga to Udupi passing through Shimoga and Mangalore.
Tripathi said this 350 km stretch would cost Rs 1,400 crore.
Moily also said there are plans to have another 140-km pipeline from Chitradurga to Bellary and Tripathi said this would cost Rs 700 crore. GAIL would lay this pipeline once the industry comes forward with consumption requirements.
The Minister noted that 80 per cent of the Dabhol-Bangalore gas pipeline passes through Karnataka, which now has an opportunity to create a "green corridor".
Tripathi said the pipeline touches the highway every 100 kms and noted the possibility of having CNG stations there for the benefit of long-distance buses.
On supply of gas to domestic users, Tripathi said a 50 km pipeline has been laid around Bangalore and the question now is to have connections inside the city which is expected within a year, while Moily, also a former Karnataka Chief Minister, said it could happen within six months.