The Telegraph
Since 1st March, 1999
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National gas grid in the pipeline

New Delhi, Sept. 29: Petroleum minister Ram Naik announced today that the government has drawn up a Rs 18,000 crore proposal to set up a national gas grid comprising a 7,000 km inter-state pipeline network. The project is expected to be completed in five to six years.

Releasing the draft natural gas pipeline policy here, the minister said the transportation of gas is envisaged through a network of pipelines laid with the authorisation of a regulator.

According to the draft policy, all trunk pipelines covering more than one state or operating at a high pressure will be managed by a company to be notified by the government. Till then, Gail (India) Ltd will look after the operations.

The policy provides for the appointment of a regulator who will ensure access to the pipelines on a non-discriminatory common carrier principle for all users.

The regulator will also approve the tariff for common carrier pipelines. Till a regulatory board is set up, the government will perform the functions of the regulator.

Smaller gas pipelines spanning 100 km within a state can be set up independently by private companies and will not come under the purview of the regulator, which will be appointed under the Petroleum Regulatory Board Bill 2002. It will regulate the transmission, distribution, supply and storage system for natural gas and liquefied natural gas (LNG).

Naik said the draft policy also proposes to set up a national advisory council, which will consist of stakeholders of the gas grid system and representatives of state governments. The council will advise the government and will hold discussions with the regulator as well.

Naik said the draft pipeline policy aims to promote investment in gas pipelines and will provide a policy framework for systematic development of the sector.

“There is a need for a proper linkage between gas sources and its market centres along with inter-connectivity between regions,” he added.

The minister said with the recent gas discoveries in the Krishna Godavari basin on the eastern coast, some areas in the western coast and Rajasthan, domestic production of natural gas was expected to go up. “LNG imports will become a reality when the country’s first LNG terminal being set up by Petronet LNG at Dahej starts functioning from January next year,” he said.

The minister said the policy framework would be beneficial to the power, fertiliser and steel sectors. The draft policy is also expected to give a fillip to the compressed natural gas (CNG) projects in Delhi and Mumbai. The policy has been put up on the petroleum ministry website to facilitate wider feedback.

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