Petroleum and Natural Gas Regulatory Board (PNGRB) has asked the government to cancel licence granted to Reliance Gas Transportation Infrastructure (RGTIL) to lay four gas pipelines, saying the company has been dragging its feet on implementation of the 2,175-k.m. pipelines.
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 oil regulator has written to the Petroleum Ministry recommending cancellation of the authorisation over delays in implementation of the pipelines, a top PNGRB official said.
“The Board has taken a view of recommending cancellation of authorisation for the four pipelines. That has been communicated to the government,” he said, adding the licences were given by the government prior to PNGRB began functional and so its cancellation can now be done only by the Ministry.
Relog has cited uncertainty about availability of gas for not building the lines that as per the original authorisation were to be built 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-k.m. 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.