The Hindu Business Line : Gas pipeline policy soon

Issues such as open access, multiple players, pipeline capacities as well as marketing and infrastructure exclusivity are to be addressed in the policy for natural gas pipelines and city or local natural gas distribution networks, which is likely to be formalised soon. The Petroleum Ministry, which is giving a final shape to the policy, proposes to announce it in the next few days.

According to official sources, after due deliberations with stakeholders the Ministry is working towards a policy which would encourage investment in the sector and be in consumer interest. The policy would be implemented by the soon to be set up Petroleum and Natural Gas Regulatory Board (P&NGRB) that has laid down the broad principles for the gas business, but the policy will provide the crucial links.

Exclusivity issues

The issue of marketing and infrastructure exclusivity has evoked strong reactions from the public and private companies in the sector. At a recently convened meeting by the Petroleum Minister, Mr Murli Deora, strong differences came up among the stakeholders on whether a second firm should be allowed in the city gas distribution (CGD) business in a given area.

Elaborating, official sources said, at present Mahanagar Gas Ltd (MGL) and Indraprastha Gas Ltd are operating monopolies in Mumbai and Delhi, hence, it needs to be seen whether there should be another player supplying in the same area.

A section of players felt competition should be allowed by removing marketing exclusivity in the sector and opposed any suggestions on even allowing exclusivity for a limited period.

Various organisations, companies and institutions, including British Gas, Anil Dhirubhai Ambani Group (ADAG), British Petroleum, IndianOil, and GAIL (India) participated in the meeting to discuss the proposed Policy for Development of Natural Gas Pipelines and City or Local Natural Gas Distribution Networks.

Consumer interest

The main thrust of the proposed policy is to ensure consumer interest in terms of gas availability and reasonable tariff, the Petroleum Minister, Mr Deora, told Business Line.

The policy would facilitate the laying of gas pipelines and city gas distribution networks, which would help in making available natural gas, an environment-friendly fuel, to different parts of the country and in making this fuel available to households across the country.

Under city gas distribution business, natural gas produced from oil and gas fields is supplied directly in piped or compressed form as cooking fuel or transportation fuel instead of liquefied natural gas, produced in refinery and gas-cracking units.

The objective of the policy is to promote investment from public as well as the private sector in natural gas pipeline and city and local natural gas distribution networks.

It aims at facilitating open access for all players to the pipeline network on a non-discriminatory basis and promoting competition among entities, thereby avoiding any abuse of the dominant position by any entity.