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PNGRB issues draft regulations for operating gas exchanges: Chairperson Sarraf

Our Bureau New Delhi | Updated on July 14, 2020 Published on July 14, 2020

The Petroleum and Natural Gas Regulatory Board (PNGRB) has issued draft regulations for operating gas exchanges in the country.

Speaking at a webinar organised by the PHD Chamber of Commerce and Industry on City Gas Distribution 2020 — Challenges and Opportunities, PNGRB Chairperson, Dinesh Kumar Sarraf, said, “Views and comments on the draft PNGRB Regulations for Gas Exchanges can be sent by stakeholders till August 10, 2020.”

According to officials in the know, all natural gas exchanges in the country will come under the PNGRB once these rules are finalised. There was some confusion regarding the ability of the PNGRB to do so, but all clarifications were issued earlier this month, and now all entities looking to set up gas exchanges will require prior approval from the regulator.

These regulations will be finalised by August 17, a PNGRB statement said.

“Participants at the gas exchange should have Gas Transport Agreements (GTAs) with transporter(s). The termination date for such a GTA should be minimum 15 days from the date when the transaction is executed at the gas exchange,” the draft rules said.

The draft relies on the Petroleum and Natural Gas Regulatory Board (Access Code for Common Carrier or Contract Carrier Natural Gas Pipelines) Regulations, 2008 for controlling the gas grid and exchanges. National Gas Grid Management System (NGGMS) will handle the gas nomination and its scheduling during trade.

Transportation tariff (if any) shall be as determined or authorised by PNGRB and all contracts are necessarily for physical delivery, the draft said.

“Every authorised gas exchange or clearing corporation shall have a minimum net worth of ₹25 crore at all times,” the draft added.

PNGRB has also proposed capping the equity shares that entities can hold in the gas exchange and the Clearing Corporation. The appointment of key functionaries of the exchanges will also require PNGRB approval.

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Published on July 14, 2020
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