Oil regulator PNGRB has invited bids for laying two natural gas pipelines, which will partly include the one already being laid by Reliance Industries to transport gas from its eastern offshore fields.
The Petroleum and Natural Gas Regulatory Board (PNGRB) has invited Expression of Interest (EoI) for a pipeline from Chennai (in Tamil Nadu) to Nellore (in Andhra Pradesh), according to an advertisement by the Board.
This section is part of the 600-km Kakinada (in Andhra Pradesh) to Chennai pipeline that RIL was authorised to lay to transport natural gas from its eastern offshore KG-D6 fields.
PNGRB has similarly invited bids for a line from Kakinada to Visakhapatnam and Srikakulam in Andhra Pradesh, which form part of RIL's under-implementation 1,100-km Kakinada to Basudevpur (in Orissa) pipeline.
The Board invited bids even through the question whether the regulator is empowered to give firms the authorisation to lay pipelines is to be decided by the Supreme Court.
PNGRB had previously invited bids for 1,585-km pipeline from Mallavaram on the east coast of Andhra Pradesh to Bhilwara in Rajasthan, 1,680-km line from Mehsana in Gujarat to Bhatinda in Punjab and 740-km Bhatinda to Srinagar via Jammu line.
A consortium led by Gujarat State Petronet Ltd (GSPL) emerged winner in the bids but PNGRB is yet to issue formal authorisation in absence of Court decision on its authority to do so.
Section 16 of the PNGRB Act, which gives the Board the powers to authorise entities to lay pipelines and build city gas distribution networks, was notified only on July 15 this year.
Irrespective of the Section 16, PNGRB had during past three years gone ahead with invitation of bids for city gas projects and pipelines, a move that has been challenged in the Supreme Court.
The Apex Court has posted the matter for hearing in August 2011.
A PNGRB official said RIL has been slow in implementing the two pipelines as well as the 670-km Chennai to Tuticorin pipeline and so the board invited EoI to lay the sections.
RIL on the other hand has written to the PNGRB saying it has already completed acquisition of right-of-user (ROU) for the pipelines and the delay, if any, in the implementation was due to the uncertainty over who the government is going to allocate gas from KG-D6 fields.
The company says it does not have freedom to market the gas and a pipeline will become infructuous if the gas was allocated to regions other than where the line has been laid.
RIL was authorised to lay the two pipelines besides the Kakinada to Bharuch in Gujarat, which is already operational.