Petroleum and Natural Gas Regulatory Board (PNGRB) of India has awarded the INR8.55bn ($173.9m) contract.
The work entails the construction of a 750-km long pipeline from Bathinda in Punjab that will run through Jammu and terminate at Srinagar.
The pipeline will connect the state to the National Gas Grid and link individual households with the gas stations through a network of supply pipelines.
The work is expected to be completed within three years from the launch of project.
When completed, the project is expected to meet the gas supply needs for the entire year in the state, especially in winters when energy needs increase.
It would also help divert hydro power for other judicious use and help supply natural gas to domestic, commercial, transport, industries, agriculture and allied sectors.
