Regulator picks a fight with IGL over Noida CGD grid

Vol 11, PW 13 (01 Nov 07) Midstream & Downstream

Could this be a taste of things to come PETROWATCH learns of a simmering row between the office of regulator Labanyendu Mansingh and state-promoted Delhi-based gas retailer Indraprastha Gas.

Last month IGL invited the regulator to a small Hindu ceremony - scheduled for October 12 - to mark the company’s resumption of work in the Delhi suburb of Noida. But instead of accepting or politely declining, PETROWATCH learns the regulator’s office on October 10 delivered a sharp rebuke to IGL managing director Om Narayan questioning the legality of IGL’s presence in Noida and the decision to resume work without first securing its permission! Stunned by this unexpected response, IGL promptly replied the next day saying it did not need the regulator’s permission to re-start work in Noida.

“I don’t understand what they (regulator) are trying to convey,â€‌ a senior IGL source tells us. “My understanding is that the regulator’s job is to monitor the smooth expansion of the city gas distribution networks in the country.

It should not try to curtail our activities by getting into this useless exchange of letters. IGL was operating in Noida before the regulator was conceptualised.

â€‌ In its letter, IGL reminds the regulator that it has been working in Noida since December 2004, much before Adani Energy arrived in November 2005, armed with a NOC from the former government of Mulayam Singh Yadav. In July this year newly elected stateauthorities revoked Adani's NOC for its failure to deliver and asked IGL - already operating two CNG stations - to resume work.

Eager to move fast, IGL co-promoter GAIL requested the oil ministry for an â€کallocation’ of subsidised domestic gas on August 30 so it could re-start distribution. Less than a month later on September 27, the ministry agreed, and sanctioned 200,000 cm/d.

“If the (regulator) still has objections,â€‌ concludes IGL, “why doesn’t he go and ask central government and the oil ministry why they allocated us gas for Noida if we are doing something illegal.â€‌