Haryana City Gas moves Supreme Court against GAIL

Vol 11, PW 11 (04 Oct 07) People & Policy

The battle for open access to GAIL’s gas transmission pipelines has finally reached the courts, as expected.

PETROWATCH learns on September 14, India’s Supreme Court directed GAIL and the oil ministry to respond to applications from Haryana City Gas and Adani Energy demanding subsidised natural gas as well as connectivity to GAIL’s gas transmission pipeline: the HBJ, which cuts across huge swathes of northern India. Both the ministry and GAIL are likely to respond sometime this month, after having received the Supreme Court order on September 26.

“We were compelled to approach the Supreme Court,â€‌ says a Haryana Gas source. “Numerous letters to GAIL did not get us any response.

â€‌ Anger at GAIL’s unwillingness to grant access to the HBJ dates back to August 2005 when Haryana state authorities issued NOCs to local retailer Haryana City Gas to sell CNG and begin Piped Natural Gas supplies to households and commercial establishments in four towns in Haryana: the Delhi suburb of Gurgaon, Rohtak, Rewari and Jhajjar. Not only does Haryana City Gas want access to the GAIL transmission network, it is also demanding some of the 700,000 cm/d subsidised domestic gas â€کallocated’ by the oil ministry for CNG supplies in Gurgaon, the neighbouring Delhi suburb of Faridabad (in Haryana) and Noida (in Uttar Pradesh).

“We offered GAIL two options for connectivity from the HBJ to our Gurgaon CGD network,â€‌ Haryana Gas tells us, “either at a location some 300 metres outside their terminal at (car maker) Maruti Udyog or at our 1500-sq metre plot just 1.5 metres away from the GAIL pipeline.â€‌ Angry, Haryana Gas accuses GAIL of backtracking on signed agreements.

In 2000, for example, it claims GAIL agreed to sell 1.5m cm/d R-LNG from Dahej for its planned CGD networks in Haryana. This informal agreement, says Haryana Gas, was converted into a Heads of Agreement in October 2002.

Anticipating regular gas supplies from the HBJ, Haryana Gas signed around 100 Gas Sales Agreements with end-users and continued talks with GAIL on supplies until October 2004, when they abruptly ended.