The Hindu Business Line : Reliance Gas seeks nod to levy transportation charges

Snapshot
The company is understood to have opted for a two-zone tariff structure, applicable for 2009-10
The 1,385-km East-West pipeline network traverses from Kakinada in Andhra Pradesh to Bharuch in Gujarat.

Richa Mishra

New Delhi, April 30 Reliance Gas Transportation Infrastructure Ltd (RGTIL) has approached the competent authorities to seek a nod for the transportation tariff to be levied by it for ferrying Reliance Industries Ltd’s (RIL) D6 Block gas.

Industry sources told Business Line that RGTIL has approached the Petroleum & Natural Gas Regulatory Board (P&NGRB) with an indicative tariff structure. RGTIL, which has already inked a Gas Transportation Agreement (GTA) with consumers for ferrying the Krishna Godavari Basin D6 Block of RIL, is understood to have opted for a two zone tariff structure, which will be applicable for 2009-10.

The tariff for the first zone is likely to be between 30 and 40 cents per mBtu (about Rs 20/mtbu) and the second zone about $1.25 per mBtu (Rs 60-70/mbtu).

The company, promoted by the RIL promoters, has implemented the 1,385-km East-West pipeline network, which traverses from Kakinada in Andhra Pradesh to Bharuch in Gujarat. It will transport 80 mscmd of gas from RIL’s Krishna Godavari Basin Block.

Sources said, “The first zone will comprise the initial 300 km from landfall point in Kakinada, and the remaining portion of the pipeline network will fall into the second zone.”

The regulator has said that there would be zone tariff with each zone measuring 300 km. Therefore, the network of east-west could be divided into five zones. However, the company had the option of clubbing together the zones, sources said.

Guidelines

The regulator has already formulated guidelines for computation of tariff and approval mechanism. “Based on these guidelines, RGTIL has proposed the tariff for approval of the P&NGRB,” Mr R.K. Dhadda, Managing Director, RGTIL, said.

The Government has fixed the gas price at $4.2/mBtu at landfall point (excludes the taxes, transportation tariff and marketing margins). RIL’s marketing margin is 13.5 cents/mBtu.

While declining to give any details on the total project cost of the pipeline network, Mr Dhadda, said, “We have got AT Kearney to do the bench marking of the project. According to their estimates, the pipeline project matches the standards of a world class infrastructure and would cost $4.6-$5.2 billion. But, initiatives like capital cost efficiency have helped us to bring down the cost by almost 20-25 per cent of what has been indicated by AT Kearney.”

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