British Gas wants regulator to stay out of distribution

Vol 7, PW 19 (03 Dec 03) People & Policy

Investment and inter-connectivity is the British Gas double-bill formula to ensure the development of a successful natural gas pipeline regulatory regime in India.

Unlike Shell and Gujarat Petroleum, BG openly welcomes the Indian governments initiative to formulate a national gas pipeline policy but stresses, the need to promote investment in gas pipelines and to provide inter-connectivity between regions, consumers and producers. In a two-page response submitted on 31st October, BGs India chief Nigel Shaw tells the government: The proposed interim pipeline policy should establish a clear and unambiguous set of rules and contribute to the growth of the natural gas industry.

BG wants a clear distinction between the role of national regulator and state governments. The focus of the regulator should be on the development of an Inter-State pipeline network whereas state bodies should be responsible for developing and administering Intra-State pipeline networks.

Contacted by PETROWATCH, a gas regulation expert explains the BG position. India faces a dual challenge, he said.

First is to build a network and secondly open the natural gas market. Our expert agrees with BGs demand for two distinct jurisdictions, arguing that, gas (pipeline) regimes are extremely difficult to implement if you have multiple pipeline operators at both the federal and state level.

BG wants the future regulator to stay out of local pipeline distribution, no doubt with its fully owned subsidiary Gujarat Gas in mind. Gujarat Gas operates 1,695-km of high pressure natural gas transmission and distribution pipelines across Surat, Bharuch and Ankleshwar in Gujarat: The regulators jurisdiction should be limited to Inter-State transmission pipelines only, adds Shaw, and should exclude local distribution and upstream pipeline networks.

Insists Shaw: The regulator should have powers to allow non-discriminatory and transparent third party access on these pipelines to ensure economic and efficient utilisation of existing and future infrastructure. Cynics point out that Gujarat Gas is an emerging player in third party transportation of natural gas in India and would benefit greatly if the ministry accepts this suggestion.