Gujarat denies breaching Supreme Court gas ruling

Vol 9, PW 2 (04 May 05) Midstream & Downstream

Gujarat has responded sharply to reports that GAIL plans to move the Supreme Court against its alleged breach of a ruling on development of the states gas sector.

In the last issue of PETROWATCH we reported how GAIL, armed with support from the Solicitor General of India, Goolam Vahanvati, wrote to oil secretary Sushil Tripathi seeking permission to begin legal proceedings against Gujarat for breaching a Supreme Court ruling on 25th March 2004 banning Gandhinagar from regulating its gas sector independent of Delhi. Contacted by this report, a senior Gujarat official offers a point-by-point rebuttal of GAILs allegations.

Let me first clarify that after the pronouncement of the Supreme Court opinion, Gujarat has not issued any fresh licenses under the Gujarat Gas Act to any company, he said. So to say that the state government is violating the Supreme Court opinion is wrong.

He admits that Gujarat is granting Right of User permission to companies that want to lay gas pipelines under the Gujarat Water and Gas Pipelines Act of 2000, but adds: There is no reference to this particular act in the Supreme Court opinion. Do all state governments need GAILs permission before laying pipelines Gas-starved industries in Gujarat owe their survival to the pipelines and associated infrastructure set up by Gujarat State Petronet, argues the official, who declined to be named.

Had there been no Gujarat State Petronet we would have had to wait endlessly for GAIL to lay pipelines in Gujarat, he said. In all these years Gujarat has never been a priority for GAIL.

Gujarat, he argues, is enjoying phenomenal economic growth, thanks to the gas pipeline grid set up by Gujarat Petronet. GAIL would never have built pipelines to Ahmedabad or to (distant) Himmatnagar or Morbi where ceramic industries are starved of gas, he continues.

Industries in Gujarat have a huge appetite for gas.

LNG Summit