PIPELINES: REGULATION IN THE AIR?

Vol 2, PW 22 (11 Nov 98) Midstream & Downstream
     

Noises coming out of the Indian oil ministry suggest plans are afoot to set up a new body to regulate the countrys burgeoning pipeline sector.

As usual no timetable was given, so for the moment the news remains hypothetical. The momentum began on 28 October when the Economic Times wrote an editorial titled: "Wanted: A Pipeline Act", prompted by Reliances controversial proposal to build a 3,000km pipeline across India, threatening a separate project by the state pipeline company, Petronet-India.

The article argued it would be, "a waste of national resources" to build parallel pipeline networks and called on the government to enshrine the "Common Carrier Principal" into law, allowing marketing companies access to pipeline infrastructure at a price, a practice common outside India. Oil secretary TS Vijayaraghavan must have read the article because just three weeks later on 18 November the Business Standard newspaper wrote: "The ministry of petroleum has decided to open up the petroleum pipeline sector to private investment on a Common Carrier Principle.

A regulatory authority will be set up to monitor private sector investment in the sector. The decision was taken at a meeting convened yesterday by petroleum secretary TS Vijayaraghvan".

Very nice, but as veteran India watchers will know, all "Regulatory Authorities" (ie. Gas Regulatory Authority; the DGH etc) need an Act of Parliament to empower them.

A Pipeline Regulatory Authority will therefore need to join the line (queue).