Companies setting up gas distribution networks in different cities will be allowed exclusive market rights in those cities for a limited period, according to the gas pipeline policy announced by Union Petroleum Minister Murli Deora on Wednesday. The period, however, will vary according to the area and population covered by each distribution network.
"All decisions will be taken by the Petroleum and Natural Gas Regulatory Board, which will be in place by January 2007. It will decide which entity will lay, build, operate or expand a natural gas pipeline for local distribution," Deora added.
The new policy demands that pipelines should have at least 33 per cent more capacity than required by the operator. The extra capacity will be available for use on common carrier basis by any third party, on open access and non-discriminatory basis at transportation rates laid down by the regulator.
Elaborating on the provisions of the policy, petroleum secretary MS Srinavasan said it envisages that the regulatory board will facilitate creation of necessary infrastructure. Before being enacted as law, the policy will be reviewed, and the regulator may suggest amendments too.
The policy provides a broad framework for the development of natural gas pipelines and local natural gas distribution networks, the detailed contours of which will be laid down in the regulations that are being framed. The response received to this policy will also form an important input in the formulation of the regulations, Srinivasan stated.
The policy states that any entity wanting to apply for building, operating or expanding or contract carrier gas pipelines will have to give an undertaking that if it has business interests in related areas of gas marketing or city or local gas distribution network or has a related entity under the same management, joint venture, subsidiary or in any way it will ensure an arm’s length relationship between the two entities.