Deora to meet industry players on gas distribution

Petroleum Minister Murli Deora will meet industry players in Mumbai tomorrow to give a final shape to the draft policy on local natural gas distribution, which, among other things, proposes allowing competition in distribution of piped cooking gas and CNG.

Companies that have been invited to the meeting include Exxonmobil, BG, Shell, Reliance Industries, Anil Dhirubhai Ambani (ADA) group, Teri, British Petroleum, and state-owned oil companies. Planning Commission representatives will also attend the meeting.

Other issues likely to come up for discussion include applicability, grant of authorisation, exclusivity, bid bond and performance bond, conditions under ROU acquisition and unbundling of operations.

The minister will also take up the matter of gas grid connectivity, technical health, safety and environment (HSE) standards and the role of state governments.

The issue of exclusivity "" of allowing two players in the same city for gas distribution "" has been a major hurdle in finalising the gas distribution policy.

There have been conflicting demands from companies, including RIL, REL, ONGC, IOC, GAIL and foreign energy firms like BG, BP, Shell and ExxonMobil, for exclusivity in setting up networks to retail natural gas to households and commercial entities and CNG for automobiles.

According to industry sources, Reliance Industries Ltd and Reliance Natural Resources Ltd do not favour more than one player in the same city. "But on the other hand, there is BG India, which has been partnering Mahanagar Gas Ltd in Mumbai and Gujarat Gas in Gujarat for city gas distribution," sources said.

The Planning Commission, too, has said the policy should allow competition for the benefit of consumers.