Draft Policy On Natural Gas Pipeline Announced

New Delhi, September 29: | Updated: Sep 30 2003, 05:30am hrs
The government on Monday announced a draft natural gas pipeline policy under which any producer can sell gas within 100 km of well-head or land-fill point to consumers directly and lay pipeline for this purpose. The pipeline beyond 100 km will be governed by the common carrier principle.

The gas pipeline policy also envisages setting up a national gas grid for which GAIL has been designated as the nodal agency. The gas grid will consist of a 7000 km long network built at a cost of around Rs 18,000 crore over the next 5-6 years.

Announcing the details, petroleum minister Ram Naik said the policy would be finalised by December after taking into consideration suggestions by experts and stakeholders.

Mr Naik said that a company would be notified by the government to build and manage all trunk pipelines covering more than one state or operating at pressure more than the notified level. GAIL would be performing the function of this company till such time it is notified by the government.

The policy envisages appointment of a regulator under the Petroleum Regulatory Board Bill 2002 for regulating transmission, distribution, supply and storage system for natural gas/LNG and to promote development of the sector. The regulator will ensure access to gas pipelines on non-discriminatory common carrier principle for all users.

Mr Naik said the ministry would seek Cabinet approval for setting up of the regulatory authority and the Bill would be put before Parliament for discussion in the winter session.

Tariff for the transmission pipelines and distribution pipelines would be approved by the regulator which fix a ceiling to enable lower negotiated rates based on market prices.

The government would also set up a national advisory council to promote and develop the gas sector comprising stakeholders of gas grid system including state governments. The council will give adivce on the matters to the governed and the regulator.

The policy also proposes that any company planning to lay a pipeline for transmission of gas will apply to the regulator who will examine the proposal in the light of financial capability, existing gas network, expected utilisation of pipeline capacity and linkage with gas producing and consuming areas.