Regulator looks to redefine PNG, insist on transport only by pipeline

The Petroleum and Natural Gas Regulatory Board (PNGRB) is planning to amend the definition of piped natural gas (PNG) in its regulation, overriding objections from some city gas companies, according to people familiar with the matter.

In 2018, the regulator expanded the definition of "piped natural gas" in its city gas licensing regulation to mean "natural gas transported through pipelines or cascades or any other permitted mode".

This was done to give confidence to potential licensees that they could use cascades to fulfil their minimum work programme obligations since some licence areas were not well connected to the national gas grid, people said.


PNGRB is now planning to remove "cascades or any other permitted mode" from the PNG's definition.

Relying on the 2018 amendment, many city gas distributors have increasingly used cascade to serve their CNG customers as well as commercial and industrial customers.

City gas licensees enjoy the right to exclusively supply gas to consumers with a demand of up to 50,000 standard cubic meters a day (SCMD) in its licensed area. This, according to PNGRB's understanding, is applicable only if the licensees supply gas using a pipeline, people cited earlier said.

But sometime back a court upheld a city gas licensee's contention that the exclusivity would apply even when the supply is made using cascades since the definition of piped natural gas includes transport by cascade.

By amending PNG's definition, the PNGRB is aiming to remove the basis for that court judgment and encourage city gas companies to lay pipelines, people said.

Indian Oil Corp has told PNGRB that if the words "cascades or any other permitted mode" were removed from the definition of PNG, it will impact the work programme target of city gas companies.

In response, the regulator has said that the proposal to remove "cascade" from PNG's definition in regulation is in line with the original PNGRB Act.

Adani Total Gas Ltd has said that the proposed change "would infringe the exclusivity rights vested with the city gas distribution entities for development of" licensed areas. Reliance Industries supported the amendments proposed by the PNGRB.