Oil Min to seek explanation from Reliance Gas Transportation

To seek explanation before accepting sector regulator PNGRB's recommendation of cancellign the firm's licence to lay four gas pipelines

The Oil Ministry will seek an explanation from Reliance Gas Transportation Infrastructure Ltd before accepting sector regulator PNGRB's recommendation of cancelling the firm's licence to lay four gas pipelines.

"We want to know from them the reason why they have not implemented the (2,175-km) pipelines," a top Ministry official said. "We will be writing to them seeking clarification".

Relogistics Infrastructure Ltd (Relog), a subsidiary of Mukesh Ambani's RGTIL, had in 2007-08 won government authorisation to lay Kakinada-Basudebpur-Howrah pipeline, Kakinada-Chennai line, Chennai-Bangalore-Mangalore pipeline and Chennai–Tuticorin line but physical work on these pipelines haven't yet started.

The Petroleum and Natural Gas Regulatory Board (PNGRB) wrote to the Oil Ministry recommending cancellation of the authorisation over delays in implementation of the pipelines.

"Yes, we have received the recommendation from PNGRB. We are examining it," he said, adding that the regulator has not made recommendation for cancellation of authorisation granted to state-owned GAIL India Ltd for Jagdishpur-Haldia line.

Relog has cited uncertaintly about availability of gas for not building the lines that as per the original authorisation were to be build in three years from date of all approvals.

The three year period expires this month.

The official said Relog has also refused to furnish bank gurantee, which can be confiscated if the company did not complete the pipeline within the given timeframe.

RGTIL says it built the 1,396-km East-West pipeline from Kakinada in Andhra Pradesh to Bharuch in Gujarat to ferry natural gas from eastern offshore KG-D6 fields, in record time. And it is "fully equipped" to complete the four pipelines in 24 months, but wants to synchronise the construction with gas sourcing.

The company claims that while demand can be perhaps generated, sourcing of gas is a problem.

Reliance Industries' eastern offshore KG-D6 field output has dropped to 32 million standard cubic meters per day instead of rising to 80 mmscmd.

KG-D6 and other eastern offshore gas fields were supposed to be the source of fuel for the pipelines but in view of falling output and no other field coming on stream in near future, the pipeline work has been delayed, it said.

As per the original authorisation, the pipelines were to be completed within 36 months of the notification of expression of interest or 24 months from the date of 100 per cent availability of right of user (RoU), whichever is later. The twin deadlines expire between June to August for the four pipelines.

The official said PNGRB has not yet taken any view on the authorisations granted by state-owned GAIL India Ltd.