Britain invites gas regulator on fact-finding tour of UK

Vol 11, PW 10 (20 Sep 07) People & Policy

Growing concern that the new downstream and gas regulator wants to expand its remit from gas transmission and distribution pipelines to LNG terminals appears to be misplaced.

Over the past month industry commentators have noticed the regulator showing an “unhealthy interestâ€‌ in LNG terminals, which they say are clearly excluded from the newly enacted Petroleum and Natural Gas Regulatory Board Act, 2006. There is even unconfirmed talk of the regulator planning a “study tripâ€‌ of LNG terminals across Europe.

Not so, regulator Labanyendu Mansingh tells us. “The UK government has invited us on a fact-finding mission to see how the regulatory system works in Britain only,â€‌ says Mansingh, contacted by this report.

“There is no plan to visit other countries. Next week we will take a decision on whether to accept the British invitation.

â€‌ If it goes ahead, adds Mansingh, the visit would take place in October and focus specifically on UK gas regulation. “During the visit we might visit a LNG terminal (Milford Haven) but the focus will be to understand the gas regulatory framework in the UK,â€‌ stresses Mansingh.

“We are not concerned with LNG terminals.â€‌ Experts tell us that under the Act, the regulator’s power is restricted to regulation of gas transmission and distribution pipelines, as well as the growth of City Gas Distribution networks and to some extent pricing, if it harms customers.

“For LNG the regulator’s only role is to grant authorisation to set up new terminals,â€‌ clarifies a source. “He has no power over existing terminals.

â€‌ Mansingh’s clarification that he is “unconcernedâ€‌ with LNG terminals will come as a relief to Petronet-LNG and Shell who fear he might force â€کOpen Access’ on their receiving terminals at Dahej and Hazira under pressure from Gujarat authorities concerned at the high cost of LNG. “Pipelines are â€کnatural’ monopolies,â€‌ comments an industry source.

“But LNG terminals are not like that. They are a â€کPoint Source’ for gas like a gasfield.

In the US LNG terminals are clearly exempted from granting â€کOpen Access’ and Europe is following the US model.â€‌