Gujarat Petronet challenges GAIL at PNGRB

Vol 17, PW 7 (31 Oct 13) People & Policy

Gujarat State Petronet (GSPL) has done what no other state-owned player dared: challenge GAIL for monopolising short term gas sales through two north Indian pipelines.

GSPL filed an appeal this month (October) with the PNGRB seeking to force GAIL into accepting short-term bookings to supply gas from the 1200-km Dahej to Dadri pipeline and the 610-km Dadri to Nangal pipeline. “GAIL repeatedly refuses to book us common carrier capacity on a short term basis," says GSPL.

"It is insisting we sign a ‘firm’ contract for 12 months minimum, including a ‘ship or pay’ provision.” GSPL alleges GAIL is happy to allow long term contracts but is hogging the short term market for itself.

An IndianOil source agrees. “We face similar problems with GAIL," he says.

"It refuses to sign gas transport agreements for less than a year. We aren’t challenging GAIL because we're both state-owned companies.

” Bharat Petroleum agrees. “GAIL does it because it owns the gas pipeline network and also sells gas,” says BPCL.

"GAIL worries if it allows us to transport gas to customers on short term contracts it will lose its market share for gas sales." GSPL adds PNGRB regulations from 2009 stipulate: "A pipeline entity must make available for other entities any capacity over and above its own requirement by entering into a contract to transport gas for a period less than one year.