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India’s Changing Gas Scenario: Challenges Before The Regulator L. Mansingh Chairperson, PNGRB

India’s Changing Gas Scenario: Challenges Before The Regulator L. Mansingh Chairperson, PNGRB. Gas Demand, Production & Import Trends. BCM. Energy Eras. 19 th CENTURY - COAL. 20 th CENTURY - OIL. 21 ST CENTURY - GAS. Natural Gas Demand Scenario

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India’s Changing Gas Scenario: Challenges Before The Regulator L. Mansingh Chairperson, PNGRB

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  1. India’s Changing Gas Scenario: Challenges Before The RegulatorL. MansinghChairperson, PNGRB

  2. Gas Demand, Production & Import Trends BCM

  3. Energy Eras 19th CENTURY - COAL 20th CENTURY - OIL 21ST CENTURY - GAS

  4. Natural Gas Demand Scenario As projected by hydrocarbon Vision - 2025

  5. Gas Availability Projections (MMSCMD) • - This availability is as compared to estimated gas demand of 313 MMSCMD as per HV – 2025 • - Although, it is difficult to accurately project the total availability by 2025, a deficit of about 200 MMSCMD is estimated

  6. Pattern of Gas Use (LPG & PETROCHEM) OTHERS (CNG,GLASS, CERAMICS, ETC.) 8% 14% FERTILIZER 32% SPONGE IRON 4% POWER 42%

  7. Objectiveof PNGRB Act For establishing Petroleum and Natural Gas Regulatory Board - to oversee and regulate refining, processing, storage, transportation, distribution, marketing and sale; to protect interests of consumers and entities engaged in specified activities; to ensure uninterrupted and adequate supply; and to promote competitive markets in respect of petroleum, petroleum products and natural gas

  8. Salient Functions of PNGRB Protecting consumers’ interest by fostering fair trade and competition Registering and authorising entities for specified activities Declaring pipelines as common or contract carriers Regulating access and transportation rates for common or contract carriers Ensuring adequate availability, preventing restrictive trade practices by monitoring prices & transportation rates and enforcing retail & market service obligations in respect of notified petroleum, petroleum products and natural gas Laying down technical standards and specifications including safety standards Maintaining data bank

  9. Establishment of PNGRB All provisions (except Section 16) of PNGRB Act notified w.e.f. 1.10.2007 PNGRB formally established w.e.f. 1.10.2007 No natural gas pipeline and CGD network can be built or operated after 1.10.2007 without authorisation of PNGRB Only entities with authorisation by Central Government prior to 1.10.2007 exempted from this requirement

  10. PNGRB - Major Challenges Declaring/authorizing petroleum products & NG pipelines and CGD networks on common carrier basis Development of NG market in India Specifying market service obligations - to ensure availability of petroleum products in remote and low service areas Specifying retail service obligations - to ensure supply of right quality and right quantity of petroleum products to consumers Fostering fair trade & competition

  11. Draft Regulations for CGD Networks • Draft Regulations for • (i) authorising entities for developing CGD Networks; • (ii) exclusivity for CGD Networks; and • (iii) determination of network tariff of CGD Networks • hosted on EIL’s website htpp://engineersindia.com • on 15.11.2007 requesting for comments from all concerned by 6.12.2007 • Regulations to be finalised after considering comments and finally notified on 1.1.2008

  12. Eligibility Criteria (1) Technically capable for (a) laying & building CGD Network (b) operating & Maintaining a CGD Network (2) Adequate Financial capability to undertake project Draft Regulations for CGD Networks

  13. Draft Regulations for CGD Networks • Bidding Criteria • (1) Lowest Transportation Tariff for CGD Network during economic life of project • (2) Quickness of Network Infrastructure in terms of pipeline capacity & spread • (3) Maximum possible & Quickest network coverage/penetration during exclusivity period for PNG connections • Based on above criteria, Bids to be called for- • - Least PV of year-wise network tariff (quoted in bid) over economic life of project - Weightage 40% • - Highest PV of year-wise “inch-kilometer” of steel pipelines proposed in Network during exclusivity period - Weightage 30% • - Highest PV of year-wise domestic PNG connections build-up (quoted in bid) during exclusivity period – Weightage 30%

  14. Exclusivity Criteria for CGD Networks • Two periods of exclusivity provided to promote flow of investments – • Exclusivity of infrastructure over its economic life of 25 years • Marketing exclusivity of 5 years after which 3rd party access to the network for marketing of natural gas would be available on payment of network tariff • Network Tariff to be generally decided on bid basis

  15. Existing CGD Networks Networks with Central Government authorisation prior to 1.10.2007 exempted from authorisation by the Board Entities without Central Government authorisation to apply to the Board for authorisation Network tariff, infrastructure investment and geographical coverage to be determined on normative basis Period of exclusivity lower than those decided for new entities

  16. Thank you

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