The Petroleum & Natural Gas Regulatory Board (PNGRB), the downstream regulator in the energy sector, has proposed to finetune its licensing norms as it cautiously prepares to enter a new regime of authorising trunk and city gas pipeline networks.

The idea is to make the licensing norms more investor-friendly and at the same time, equitable considering the fact that pipeline networks naturally give an edge to the first entrant in any geography.

PNGRB is now being empowered as a licensing authority after the government said last week it has decided to notify a key section in the law governing the regulator.

While some of the draft changes are aimed at making the operation of the licensing regulations more predictable to investors, others are in the nature of buying more time for processing various approvals.

The Board has decided that if an entity builds a dedicated pipeline for fetching gas for its own consumption in any particular area, the regulator should not invite bids from other investors to set up transportation capacity in the same route.

The earlier norms said that if any entity decides to go ahead with a dedicated pipeline despite the regulator?s view that a non-dedicated pipeline is more desirable in public interest, PNGRB could call bids for the same while the dedicated pipeline is under construction. The regulator decided to delete the provision allowing it to call bids in the same route.

However, the entity laying a dedicated pipeline, despite the regulator?s advice, cannot seek to convert it into a non-dedicated pipeline for five years, even under the new norms.

The new draft norms also say that for extension of gas pipelines of up to 10% of the present length, builders have to inform one month in advance and if the extension is up to 50%, then prior approval is compulsory.

For any extension beyond that, PNGRB will call a competitive bid. If the regulator itself wants the pipeline extended, then the owner has the first right of refusal before PNGRB calls for bids.

In the case of capacity expansion too, up to 10%, prior intimation and beyond that, prior approval is needed.