Deora to finalise policy on LNG distribution  

Petroleum Minister Murli Deora will meet industry players in Mumbai tomorrow to give a final shape to the draft policy on local natural gas distribution, which among other things proposes allowing competition in distribution of piped cooking gas and CNG.

Companies that have been invited for Monday?s meeting include Exxonmobil, BG, Shell, Reliance Industries, Anil Dhirubhai Ambani (ADA) group, Teri, British Petroleum, state- owned oil companies and the Planning Commission.

Other issues likely to come up for discussion at the meeting are applicability, grant of authorisation, exclusivity, bid bond and performance bond, conditions under ROU acquisition and unbundling of operations.

?The policy will be finalised after ascertaining the views of the participants,? said the minister in a statement.

The ministry has already held discussions on the draft policy with some of the stakeholders, including the gas industry group.

The objective of the draft policy is to promote investment from public as well as private sector in gas pipeline and city gas distribution networks.

The Minister would also take up the matter of gas grid connectivity, technical HSE (Health, safety and Environment) standards and role of state governments.

The issue of exclusivity - of allowing two players in the same city for gas distribution - has been a major hurdle in finalising the gas distribution policy.

There have been conflicting demands from companies including RIL, REL, ONGC, IOC, GAIL and foreign energy firms like BG, BP, Shell, ExxonMobil for exclusivity in setting up networks to retail natural gas to households and commercial entities and CNG to automobiles.

According to industry sources, Reliance Industries Ltd and Reliance Natural Resources Ltd do not favour more than one player in the same city.

?But on the other hand, there is BG India which has been partnering with Mahanagar Gas Ltd in Mumbai and Gujarat Gas in Gujarat for city gas distribution,? sources said.

?The main thrust of the policy is to secure consumer interest in terms of gas availability and reasonable tariff. It is envisaged that the policy would facilitate the laying of gas pipelines and city gas distribution networks,? the petroleum ministry said in a statement Friday.

Source: The Tribune, New Delhi, October 16, 2006
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