NRL, IGGL at odds over saturated gas pipeline

Duliajan-numaligarh gas pipeline has elicited strong response from interested parties. According to comments reviewed by Business Standard, Indradhanush Gas Grid has supported this proposal floated by the Petroleum and Natural Gas Regulatory Board.

The proposal to declare the critical Duliajan-numaligarh gas pipeline a common carrier has elicited strong responses from interested parties.

According to comments reviewed by Business Standard, Indradhanush Gas Grid (IGGL) has supported this proposal floated by the Petroleum and Natural Gas Regulatory Board (PNGRB). But others, such as Numaligarh Refinery (NRL) and Gujarat State Petronet (GSPL), have opposed this move. In its representations, Duliajan Numaligarh Pipeline Ltd (DNP), the company that owns this pipeline, has sought more time to respond to PNGRB’S proposal.

If declared common carrier, more than one consumer can use the pipeline.

This 192-kilometre pipeline was conceived for transporting natural gas from Oil India’s (OIL’S) fields in Duliajan to NRL for captive use. The estimated cost of the project stood at ~346 crore and it was commissioned on February 28, 2011. This dedicated pipeline allowed more affordable natural gas to be used by Numaligarh Refinery.

The move to declare the pipeline a common carrier may clog capacity of the pipeline with more entities wanting to opt for this cheaper means of gas transport.

NRL said, “The entire capacity of 1.2 million standard cubic metres per day (mmscmd) in the pipeline will be required by NRL and there is no additional capacity currently available for other entities. Therefore, the pipeline is not suitable for being declared a common carrier.”

Hindustan Oil Exploration Company (HOEC) is one of the entities looking to capitalise on the possible pipeline availability as it aims to increase its natural gas production with more assets coming onstream.

For Indradhanush Gas, the DuliajanNumaligarh gas pipeline is an important component of its plan to implement the North-east Gas Grid (NEGG) project. According to IGGL, the Duliajan-numaligarh gas pipeline connects the gas sources of Oil India located in the Upper Assam region with NRL.

It added, “Conversion of the pipeline to common carrier will facilitate evacuation of surplus gas from upper Assam region to NEGG for supply to end consumers located anywhere in the North-east region or mainland India.”

But GSPL has opposed this conversion. “GSPL objects to this automatic conversation of the dedicated pipeline into natural gas pipeline,” the GSPL representation said.

According to the company, the DuliajanNumaligarh gas pipeline was developed specifically for NRL. So, converting it into a common carrier is not in accordance with the PNGRB Act, 2006.

“This is the first time that a dedicated pipeline would be considered for being converted into a common carrier or contract carrier pipeline. It is, therefore, a matter not limited to only the specific entities or persons along the route of the Duliajan-numaligarh pipeline, but of a larger interest in terms of the impact on the natural gas pipeline industry,” the GSPL representation said.

The Duliajan-numaligarh pipeline was developed by DNP, a joint venture company promoted by Assam Gas Company (AGCL), NRL and OIL. AGCL is the largest shareholder with 51 per cent equity participation, NRL holds 26 per cent and 23 per cent is with OIL. AGCL is an undertaking of the Assam government while NRL is currently a subsidiary of Bharat Petroleum Corporation.

The move to declare the pipeline a common carrier may clog capacity of the pipeline with more entities wanting to opt for this cheaper means of gas transport