Indian regulator finalizes city gas project norms

April 14, 2008
India's downstream regulator, PNGRB, has laid down criteria for retailing CNG for vehicles and gas for households in cities, paving the way, an official said, "for the development of compressed gas networks in the country."

Shirish Nadkarni
OGJ Correspondent

MUMBAI, Apr. 14 -- India's downstream regulator, Petroleum & Natural Gas Regulatory Board, has laid down criteria for retailing compressed natural gas for vehicles and natural gas for households in cities, paving the way, an official said, "for the development of compressed gas networks in the country."

PNGRB said city gas distribution projects in some 250 centers will be awarded on the basis of network tariff, CNG compression charge, length of pipeline proposed to be paid, and number of households to be covered.

The oil ministry transferred to the panel a number of pending applications for development of gas networks that had been submitted by different entities. These entities would now be required to apply to PNGRB for authorization to develop networks according to the procedure specified in the notified regulations.

Regulations specify the minimum eligibility criteria for an entity to participate in the bidding process. The statement said open bidding will be based on four parameters carrying different weight:

-- How low the unit network tariff's present value is over the economic life of the project (40%).

-- How low the present value is of the compression charge for the network over the economic life of the project (10%).

-- How high the present value is of inch-kilometer of steel pipelines proposed to be laid during the period of exclusivity in terms of exemption from the purview of the common carrier or contract carrier (20%).

-- How high the present value is of the number of domestic customers proposed to be connected during the period of exclusivity in terms of an exemption from the purview of common carrier or contract carrier (30% weight).

The regulations specify service conditions, quality of service standards, the consequences of default, and termination of authorization procedure, the statement said. The rules also specify the procedure to be followed while dealing with the entities that have been laying, building, operating, or expanding CNG networks.