Ambani's EWPL seeks tripling of KG gas transportation tariff

Billionaire Mukesh Ambani-led East-West Pipeline Ltd has sought nearly tripling of the tariff it charges for transporting KG gas from east coast to Gujarat.

Downstream oil regulator PNGRB today floated a public consultation paper on EWPL, earlier known as Reliance Gas Transportation Infrastructure Ltd (RGTIL), seeking a rise in pipeline tariff from Rs 52.23 per million British thermal unit charged till 2017 to Rs 151.84 per mmBtu for 2018-19 to 2035-36.

A rise in tariff would lead to increase in the price of electricity and fertiliser as well as city gas like CNG.

"EWPL in its updated tariff filing for determination of final tariff has submitted the capital expenditure of East-West pipeline excluding interest during construction (IDC) as Rs 18,736.71 crores," PNGRB said in the consultation paper.

This includes Rs 16,227.30 crore of actual capex on building of the 1,460-km pipeline and another Rs 700 crore capex towards additional connectivity and Rs 1,809.41 crore for maintenance and replacement.

The pipeline primarily transports KG-D6 gas, which has steadily dipped from 69.43 million standard cubic metres per day achieved in March 2010 to just 4.3 mmscmd in January-March quarter.

Originally, EWPL had proposed a levelised tariff of Rs 55.91 per mmBtu for transporting Reliance Industries' eastern offshore KG-D6 gas from Kakinada in Andhra Pradesh to Bharuch in Gujarat beginning April 1, 2009.

However, the Petroleum and Natural Gas Regulatory Board (PNGRB) fixed a provisional tariff at Rs 52.23 per mmBtu.

The company on October 27 last year proposed a final tariff for the pipeline at Rs 78.72 effective from April 1, 2009, till the end of economic life of the pipeline -- up to March 31, 2034.

When PNGRB sought clarifications, EWPL updated the tariff filing to state that Rs 52.23 per mmBtu would be the tariff till 2017 and Rs 151.84 would be charged from 2018-19 to 2035-36, the regulator said in the notice.

PNGRB said as the length of the pipeline is more than 300 kms, zonal tariffs -- lower charge for zones near the origin of the pipeline and higher rates as the gas transverses away, will be fixed.

PNGRB said when it first fixed the provisional tariff, it had assessed the pipeline's carrying capacity of 85 million standard cubic metres per day including 21.25 mmscmd for use on a common carrier, open access and non-discriminatory basis by any third party.

But the company challenged this first before the Appellate Tribunal of Electricity (APTEL) and then before the Delhi High Court. The Court had in April last year ordered fixing of the tariff once the quorum of PNGRB was complete.

PNGRB became fully functional a couple of months back when the government made appointments of Chairman and members of the Board.

PNGRB sought views of stakeholders on EWPL's tariff filing within 15 days.