British Gas leads the way with letter to ministry

Vol 8, PW 18 (01 Dec 04) People & Policy

British Gas is leading the charge to convince the government that gas is different, and should be treated differently.

On 11th November, BG India chief Nigel Shaw wrote to oil secretary Sushil Tripathi introducing the Gas Industry Group. Shaw writes the groups objective is to suggest constructive views from global experience and practice for the development of the natural gas industry in India.

The Group believes natural gas should be treated separately from petroleum products, writes Shaw. These two commodities, which are common only at production level, are very different and are at different stages of development in the country: the former (gas) being at a nascent stage, while the latter (oil products) is mature and over a century old.

Shaw writes that natural gas requires the development of well-established infrastructure to increase supplies, access and availability whereas petroleum products do not require the same infrastructure development. According to Shaw, the development of infrastructure to connect supply from existing and new fields and LNG terminals with demand centres is key to development of the gas sector and attracting investment.

Shaw stresses the Group backs new legislation to regulate the industry but adds: We believe a Natural Gas Act should be considered to provide a framework for regulation akin to other industries in India and natural gas industries internationally. Shaws letter suggests the following changes in the Petroleum Regulatory Bill.

The GIG feels that the introductory paragraph of the bill should include setting up of a separate natural gas regulator On Clause 11 (e) (i) concerning the functions and powers of the board, the GIG wants the proposed regulator to make the growth of the natural gas industry and increased availability of the clean fuel as his chief priority On Clause 11 (d) (iii) (concerning open access) the GIG wants India to adopt exclusivity for distribution (including city gas distribution) based on clear norms and gradual opening of supply over time آ· On Clause 33 (which gives the centre power over the regulator) the GIG calls for the strengthening of this clause by seeking a change in its structure to prevent undue interference in the regulators work. On Clause 34 (which allows the ministry to take control and management of companies) the GIG wants it scrapped.

It should not be part of the bill as it may discourage investors who fear its misuse. TRAI Act does not have a similar clause.

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