The Hindu Business Line : National gas network set to take off — Petroleum Ministry not to wait for regulatory board Bill

THE nationwide gas network project may finally kick off, with the Petroleum Ministry hoping to firm up its views on the draft Natural Gas Pipeline Policy in a month.

There are certain issues in the draft policy that needs to be clearly stated, a Petroleum Ministry official told Business Line. For instance, the policy is silent on the law that would be applicable in case of a dispute under different circumstances, including between the players.

The Ministry is looking into the technicalities of these issues and a decision is likely to be taken soon, the official added. Moreover, the draft policy has provisions that are linked to proposals in the Petroleum and Natural Gas Regulatory Board (PNGRB) Bill, which is at an advanced stage of consideration. But the Ministry has decided not to wait for the PNGRB Bill to be enacted and will move forward on the natural gas pipeline policy, the official said.

With the major discoveries of gas in the KG Basin on the eastern coast and other discoveries on the western coast and in Rajasthan, it is expected that the domestic production of natural gas will increase substantially.

This would prompt the need for a policy to provide a proper linkage between gas sources and its market centres along with inter-connectivity between regions, consumers and producers.

A draft policy envisaging the development of a nationwide gas grid in a competitive environment, involving both the public and private sectors under a regulator was proposed in 2003. As per the draft policy, transportation of all gas is to be done through a network of pipelines laid with the authorisation granted by the regulator through a transparent mechanism.

Further, all trunk pipelines covering more than one State or operating at a pressure more than the notified level must be built or managed by a company to be notified by the Government till it gets notified by GAIL (India) Ltd. It is proposed to set up a National Gas Grid consisting of 7,000-km-long pipeline network at a cost of Rs 18,000 crore over the next 5-6 years.

Also, any producer of gas for public sector undertakings, subject to the prior permission of the Regulator and the Union Government, will have the right to sell gas within 100 km of a well-head or a land-fall point to consumers directly and lay a pipeline for this purpose.

The policy envisages the appointment of a regulator under the PNGRB Bill for regulating the transmission, distribution, supply, and storage system for natural gas/liquefied natural gas and for promoting the development of the sector. The regulator will ensure access to the gas pipelines on a non-discriminatory common carrier principle for all users. The regulator will also approve the pipeline tariff for the common carrier pipelines.

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