GSPL to fight PNGRB over captive pipeline order

Vol 23, PW 11 (09 Apr 20) Midstream & Downstream

After an unexpected defeat, Gujarat State Petronet (GSPL) is preparing to fight a PNGRB order allowing other companies to lay dedicated gas pipelines to their industrial facilities in Gujarat.

On March 17 (2020), the PNGRB rejected GSPL's complaint filed in 2018 saying: "Three respondents (Torrent, OPaL and IndianOil) are entitled to apply for laying dedicated pipelines." In its 12-page order, the Board adds: "The complaint is devoid of merit and dismissed."

A senior GSPL source confirms it is studying the court order to decide its next move. "Our main argument to the PNGRB was simple," says a source.

"Such duplicate parallel pipelines will directly hit GSPL business and revenue and waste all investments the company has made laying pipelines." GSPL also asked the downstream regulator to consider whether laying 'captive' or 'dedicated' pipelines directly by gas consumers was 'ultra vires' (beyond the power) and in violation of the Petroleum and Natural Gas Regulatory Board Act, 2006.

GSPL argues that such pipelines lead to interference with its rights as an "authorised common carrier of gas." GSPL further stresses the Board can only declare a pipeline a "common or contract" carrier and cannot grant authorisation for a dedicated pipeline such as laid by OPaL and Torrent as the Act doesn't cover it.

OPaL and Torrent's arguments persuaded the Board GSPL has failed to provide them with capacity in its pipeline network.