Nod likely for multiple gas pipeline players

The government has proposed to allow competing gas transmission lines on the same route, but intends to put in place guidelines for separating transportation business from other activities of a company.

"Transportation of gas through transmission pipelines will be on an unbundled basis and any entity desirous of laying transmission pipelines will have to undertake that activity only through a purely transportation company, which will be at arm's length with the parent company," the revised draft of the Gas Pipeline Policy says.

The move will affect the Reliance group and GAIL (India) Ltd, which have discovered gas and are also planning to enter related businesses like electricity generation.

The draft put out by the petroleum and natural gas ministry for consultations with stakeholders proposed that the government or the regulator would decide the feasibility of more than one pipeline depending on the source of gas and the markets that these pipelines would serve.

The proposed terms of transmission tariff and the time frame required for the completion of the project would also be factored in while taking a decision.

The designated capacity of the pipeline is proposed to be fixed at at least 25 per cent over the capacity required by the agency laying the pipeline and agencies which tie-up for capacity.

The extra capacity will be available on an open access basis. Till the regulatory setup for the oil and gas sector is put in place, the government will discharge the regulatory functions.