PNGRB Act 2006

common carrier
• "common carrier" means such pipelines for:
• transportation of petroleum, petroleum products and natural gas
• by more than one entity as the Board may declare or authorise from time
to time
• on a non-discriminatory open access basis under sub-section (3) of
section 20,
• but does not include pipelines laid to supply-
• (i) petroleum products or natural gas to a specific consumer; or
• (ii) crude oil;
• Explanation.- For the purposes of this clause, a contract carrier shall be treated as
a common carrier, if –(a) such contract carrier has surplus capacity over and above
the firm contracts entered into; or (b) the firm contract period has expired
contract carrier
• "contract carrier" means such:
• pipelines for transportation of petroleum, petroleum products and natural gas
by
• more than one entity pursuant to firm contracts for at least one year as may
be declared or authorised by the Board from time to time under sub-section
(3) of section 20
city or local natural gas distribution network
• "city or local natural gas distribution network" means:
• an interconnected network of gas pipelines and the associated
equipment used for
• transporting natural gas from a bulk supply high pressure
transmission main to the medium pressure distribution grid and
• subsequently to the service pipes supplying natural gas to domestic,
industrial or commercial premises and CNG stations situated in a
specified geographical area.
liquefied natural gas terminal
• "liquefied natural gas terminal" means the facilities and infrastructure
required to
• (i) receive liquefied natural gas;
• (ii) store liquefied natural gas;
• (iii) enable degasification of liquefied natural gas; and
• (iv) transport degasified liquefied natural gas till the outside boundaries of the
facility
marketing service obligations
• "marketing service obligations" means obligations:
• (i) to set up marketing infrastructure and retail outlets in remote
areas in respect of notified petroleum and petroleum products;
• (ii) to maintain minimum stock of notified petroleum and petroleum
products;
• (iii) of a local distribution entity to supply natural gas to consumers;
and
• (iv) such other obligations as may be specified by regulations;
retail service obligations
• "retail service obligations" means obligations of dealers and
distributors:
• for maintaining supplies to consumers
• throughout the specified working hours and
• of specified quality, quantity and display of maximum retail price of notified
petroleum, petroleum products and natural gas including CNG and such other
obligations, as may be specified by regulations;
restrictive trade practice
• (zi) "restrictive trade practice" means a trade practice which has, or
may have, the effect of preventing, distorting or restricting
competition in any manner and in particular,-
• (i) which tends to obstruct the flow of capital or resources into the stream of
production, or
• (ii) which tends to bring about manipulation of prices, or conditions of
delivery or to affect the flow of supplies in the market relating to petroleum,
petroleum products or natural gas or services in such manner as to impose on
the consumers unjustified costs or restrictions
authorised entity
• "authorised entity" means an entity-
• (A) registered by the Board under section 15
• (i) to market any notified petroleum, petroleum products or natural gas, or
• (ii) to establish and operate liquefied natural gas terminals, or
• (B) authorised by the Board under section 16
• (i) to lay, build, operate or expand a common carrier or contract carrier, or
• (ii) to lay, build, operate or expand a city or local natural gas distribution
network;
• "affiliate code of conduct" means the code of conduct governing
entities engaged in storage, transmission, distribution, marketing and
sale of natural gas under sub-section (1) of section 21;

• "maximum retail price" means the maximum price fixed by an entity

at which the petroleum, petroleum products and natural gas may be
sold to the retail consumers and includes all taxes, cess and levies,
local or otherwise and freight or commission payable to the dealers;
• transportation rate", in relation to common carrier or contract carrier
or a city or local natural gas distribution network, means such rate for
moving each unit of petroleum, petroleum products or natural gas as
may be fixed by regulations.
PNGRB Board
• Section 3. Establishment and incorporation of the Board :- (1) With
effect from such date as the Central Government may, by notification,
appoint, there shall be established, for the purposes of this Act, a
Board to be called the Petroleum and Natural Gas Regulatory Board.
• [appointed day is date of October 1, 2007 when the Central
Government notified the establishment of the Petroleum and Natural
Gas Regulatory Board]
FUNCTIONS AND POWERS OF PNGRB
• Section 11. Functions of the Board:
• (c) authorise entities to
• (i) lay, build, operate or expand a common carrier or contract carrier;
• (ii) lay, build, operate or expand city or local natural gas distribution network
(CGD);
• (b) register entities to
• (i) market notified petroleum and petroleum products and, subject to the
contractual obligations of the Central Government, natural gas;
• (ii) establish and operate liquefied natural gas terminals;
• (iii) establish storage facilities for petroleum, petroleum products or natural
gas exceeding such capacity as may be specified by regulations
• (d) declare pipelines as common carrier or contract carrier;
• (e) regulate, by regulations,-
• (i) access to common carrier or contract carrier so as to ensure fair trade and
competition amongst entities and for that purpose specify pipeline access
code;
• (ii) transportation rates for common carrier or contract carrier;
• (iii) access to city or local natural gas distribution network so as to ensure fair
trade and competition amongst entities as per pipeline access code;
• (i) lay down, by regulations, the technical standards and specifications
including safety standards in activities relating to petroleum,
petroleum products and natural gas, including the construction and
operation of pipeline and infrastructure projects related to
downstream petroleum and natural gas sector;
• (a) protect the interest of consumers by fostering fair trade and
competition amongst the entities;
• (f) in respect of notified petroleum, petroleum products and natural gas-
• (i) ensure adequate availability;
• (ii) ensure display of information about the maximum retail prices fixed by the
entity for consumers at retail outlets;
• (iii) monitor prices and take corrective measures to prevent restrictive trade
practice by the entities;
• (iv) secure equitable distribution for petroleum and petroleum products;
• (v) provide, by regulations, and enforce, retail service obligations for retail outlets
and marketing service obligations for entities;
• (vi) monitor transportation rates and take corrective action to prevent restrictive
trade practice by the entities;
• (g) levy fees and other charges as determined by regulations;
• (h) maintain a data bank of information on activities relating to petroleum,
petroleum products and natural gas;
• (j) perform such other functions as may be entrusted to it by the Central
Government to carry out the provisions of this Act.
Section 12. Powers regarding complaints and resolutions of disputes by the
Board
• (1) The Board shall have jurisdiction to:
• (a) adjudicate upon and decide any dispute or matter arising amongst entities or
between an entity and any other person on issues relating to refining, processing,
storage, transportation, distribution, marketing and sale of petroleum, petroleum
products and natural gas according to the provisions of Chapter V, unless the parties
have agreed for arbitration;
• (b) receive any complaint from any person and conduct any inquiry and investigation
connected with the activities relating to petroleum, petroleum products and natural
gas on contravention of-
• (i) retail service obligations;
• (ii) marketing service obligations;
• (iii) display of retail price at retail outlets;
• (iv) terms and conditions subject to which a pipeline has been declared as common carrier or
contract carrier or access for other entities was allowed to a city or local natural gas distribution
network, or authorisation has been granted to an entity for laying, building, expanding or
operating a pipeline as common carrier or contract carrier or authorisation has been granted to an
entity for laying, building, expanding or operating a city or local natural gas distribution network;
• (v) any other provision of this Act or the rules or the regulations or orders made there under
Section 14. Register
• For the purposes of this Act, a register to be called the Petroleum and Natural
Gas Register shall be kept at the head office of the Board containing such details
of entities
• (a) registered for
• (i) marketing notified petroleum, petroleum products or natural gas, or
• (ii) establishing and operating liquefied natural gas terminals, or
• (iii) establishing storage facilities for petroleum, petroleum products or natural gas
exceeding such capacity as may be specified by regulations.

• (b) authorised for –

• (i) laying, building, operating or expanding a common carrier, or
• (ii)laying, building, operating or expanding a city or local natural gas distribution network,
as may be provided by the Board by regulations.

• The register shall be open to public inspection at the head office of the Board.
15. Registration of entities :-
• (1) Every entity desirous of-
• (a) marketing any notified petroleum or petroleum products or natural gas; or
• (b) establishing or operating a liquefied natural gas terminal; or
• (c) establishing storage facilities for petroleum, petroleum products or natural gas
exceeding such capacity as may be specified by regulations, and fulfilling the eligibility
conditions as may be prescribed shall make an application to the Board for its registration
under this Act:
Entity operating prior to the Appointed date:
• Provided that no registration under this Act shall be required for any entity carrying on
any activity referred to in clause (a) or clause (b) or clause (c) immediately before the
appointed day but shall inform the Board about such activity within six months from the
appointed day [Deemed Registration]
• The Board may, grant a certificate of registration to the entity allowing to
commence and carry on the activity
• The Board may, by order, suspend or cancel a certificate of registration granted
provided the entity concerned has been given a reasonable opportunity of
being heard.
18. Publicity of applications for Registration
• When an application for registration is accepted whether absolutely
or subject to conditions or limitations,
• the Board shall, as soon as may be, cause such acceptance to be
known to the public in such form and manner as may be provided by
regulations.
16. Authorisation
• No entity shall- (a) lay, build, operate or expand any pipeline as a
common carrier or contract carrier,
• (b) lay, build, operate or expand any city or local natural gas
distribution network, without obtaining authorisation under this Act
Entity operating prior to the Appointed date:
• Provided that an entity under (a) or (b) operating from before the
appointed day shall be deemed to have such authorization, subject to
the provisions of this Chapter.[Deemed authorization]
17. Application for authorisation
• Common and Contract Carrier Authorization: (1) An entity which is laying,
operating or expanding, a pipeline as a common carrier or contract carrier
shall apply in writing to the Board for obtaining an authorisation under this
Act
• Deemed Authorization: an entity authorised by the Central Government at before
the appointed day shall furnish the particulars of such activities to the Board within
six months from the appointed day.
• CGD Authoriztion: An entity which is laying, building, operating or
expanding, shall apply in writing for obtaining an authorisation under this
Act
• Deemed Authorization: an entity operating CGD network authorised by the Central
Government at any time before the appointed day shall furnish the particulars of
such activities to the Board within six months from the appointed day.
• Reason for rejection: PNGRB will provide in writing the grounds for such
rejection or conditional acceptance, as the case may be.
GSPL India Gasnet Limited Vs. Petroleum & Natural Gas
Regulatory Board and Ors. MANU/ET/0072/2017 (APTEL)

• MoPNG issued authorization to GAIL to lay natural gas pipelines on common

carrier basis along Dadri-Bawana-Nangal (DBNPL) on 11.07.2007.
• DBNPL was to traverse through the states of Uttar Pradesh, Haryana, Delhi and
Punjab. In the case of Punjab, the pipeline was to pass through the Districts of
Sangrur, Bhatinda and Ludhiana, but Amritsar was not included.
• PNGRB issued a public notice inviting bids from interested parties for
development of natural gas pipeline network along Bhatinda (Punjab) - Jammu
Srinagar (J & K), (BJSPL) on 16.10.2009 with bid closing date on 17.08.2010.
GSPL won this bid.
• BJSPL pipelines: Natural gas pipeline from Bhatinda (Punjab) to Jammu &
Srinagar (J & K) via Moga - Kapurthala - Gurdaspur - Pathankot - Kathua
spanning about 300 Kilometers and spur-lines to Firozpur, Jalandhar,
Hoshiarpur, Amritsar, Batala, Jammu & Srinagar spanning about 440 kms (total
of 740 kms with a design capacity of at least 15 MMSCMD)
GAIL DBNPL pipeline (4)
• The entire case revolves around laying of a spur-line to Amritsar in Punjab.
• The Appellant is a company who in this case has got an authorization to
lay a natural gas pipeline from Bhatinda (Punjab) to Jammu and Srinagar (J
& K), (BJSPL). This pipeline route includes laying of a spur-line to Amritsar.
• GAIL is also authorized to lay another natural gas pipeline along Dadri-
Bawana-Nangal by PNGRB. Amritsar was not included in the pipeline route
passing through Punjab. This authorization was granted by (MoPNG) when
the Board was not established.
• Later, the same authorization granted to GAIL was accepted by the Board
with an amendment which includes laying of a spur-line to Amritsar which
was not there in the original authorization granted by MoPNG.
• Appellant's contention is that the Board could not have included the laying
of the spur-line to Amritsar which is outside the scope of its power and
without jurisdiction under the PNGRB Act and also a breach of natural
justice and this is the crux of the matter.
Contention of PNGRB and GAIL
• Spur lines within the tarriff zone do not need separate authorization
• Under terms and conditions of authorization by MOPNG, condition viz
No. 6 which reads as under: "6. The gas pipeline would be connected
to any other gas pipeline, as directed by the Government and/or any
other statutory authority.“
• APTEL Order:
• The Board could allow GAIL to lay a spur-line to Amritsar only within the tariff zone and relied on
the definition of tariff zone which as per Regulation 2(h)(ii) of the PNGRB (Authorizing entities to
lay, build, operate or expand natural gas pipeline) Regulation, 2008 reads as under:-
• 2(h) ) 1 “tariff zone” means the zone- (i) Of a length of three hundred kilometers each along the route of the
natural gas pipeline from the point of origin till the end point: Provided that the last zone of the natural gas
pipeline may be of a length of three hundred kilometers or less;
• (ii) - a corridor along the natural gas pipeline with a width of upto ten percent of the total length of the natural
gas pipeline without including the length of the spur-lines or fifty kilometers measured from the nearest
point on the surface of the natural gas pipeline on both sides, and including the point of origin and the end
point of the natural gas pipeline, whichever is less, and-
• Only the spur lines specified in the Central Government approval may be included. Connections
within 50 Kms zone can be accepted. However, common carrier/contract carrier beyond this will
require authorization through the bidding process.
• the distance between the DBNPL and Amritsar is 125 kms which is much longer than 50 kms as
stipulated in the above regulation. The distance of 85 kms as stated by GAIL is from Jalandhar to
Amritsar
• the length of the spurline is not relevant but what is relevant is how to deal with a spur-line
beyond the tariff zone.
• GAIL approval for the spur-line to Amritsar was sought based on the statement that Amritsar was
within the tariff corridor of 50 kms.
• Appellant that since the bids for the BJSPL network were competitive bids, all financials
including to transporting tariff to be quoted in the bid were worked out considering the gas
demands in the demand centers and also the total volumes of gas alongwith other inputs
and in doing so, possible markets in Amritsar was an important input for the bid preparation.
• On the other hand, wherein GAIL mentioned all the spur-lines to be considered in DBNPL
including Amritsar as per advice of the Board, but in the demand projection, demand in
Amritsar was not mentioned.
• We note that GAIL was one of the bidders for the BJSPL network along with the Appellant.
When the financial bids for BJSPL were opened up on 29.10.2011, it was known to the Board
that GAIL was not the winning bidder for BJSPL.
• It was known to the Board that in the MoPNG's authorization to GAIL for DBNPL did not
include the spur-line to Amritsar and also it was known to the Board that a spur-line to
Amritsar was included in BJSPL and GAIL lost to the tender for BJSPL.
• As per Section 17, the Board is simply authorized to accept the information submitted by
GAIL in respect of the pipeline.
• The way the Board allowed GAIL to include a spur-line to Amritsar in DBNPL authorization
appears to be against natural justice
• We find no appropriate ground for the Board to amend the Central Government's
authorization granted to GAIL for the DBNPL network by including a spur-line to Amritsar.
PNGRB Order dated 28 July 2011, Deemed
approval of HPCL pipeline
• The Chief Secretary of Karnataka by letter requested the MOPNG for laying of LPG
pipelines from Mangalore to Bangalore via Hassan;
• MOPNG circulated the letter to the PSUs
• Project was approved by the Board of HPCL: Government appointed board, hence
deemed government approval (detailed feasibility report)
• Provision of Section 16 was brought into force on 15.7.2010 and the regulation on
1.9.2010. Appointed date should be 1.9.2010 not the appointed date for PNGRB
Board of 1 October 2007
• Feasibility rest conducted
• Purchase order provided for the work
• Annual plan approved by the MOPNG for budgetary allocation
• Financial appraisal by SBI capital market
PNGRB Observation
• NO Government approval prior or after the appointed date
• The approval of board of director after the appointed date cannot be
construed as approval of the Central Government
• Approval was that of feasibility report
• PNGRB (Authorizing Entities to Lay, Build, Operate or Expand City or Local
Natural Gas Distribution Networks) Regulations, 2008.
• 18. Entity not authorized by the Central Government for laying, building,
operating or expanding CGD network before the appointed day.
• (2) The Board may take into consideration the following criteria to determine
whether such entity to be granted authorization
• (c) a satisfactory assessment of the actual physical progress made and the financial
commitment thereof till immediately before the appointed day in comparison with the
entity's DFR (detailed feasibility report0 appraised by the financial institution funding
the project…..
• (d) a physical progress of at least twenty five percent and a financial commitment of at
least twenty five percent of the capital expenditure identified for the CGD project as
per the DFR immediately before the appointed day may be considered as adequate;
• (e) the entity should have arranged, by way of acquisition or lease, land for CGS and
procured the necessary equipment for erecting the CGS before the appointed day;
• (f) the Board reserves the right to get the actual physical progress and the financial
commitment certified
• (i) firm arrangement for supply of natural gas
 Adani Gas Limited, PNGRB Order, 28.2.2019
• Adani Gas had, in response to a November 2005 invitation of Rajasthan government, bid
for setting up the city gas distribution (CGD) network in Udaipur and Jaipur.
• The state government on March 20, 2006 gave a no objection certificate, subject to
certain conditions, to the company for retailing CNG and piped natural gas in Udaipur and
Jaipur. Adani Gas in the same month deposited the commitment fee of Rs 2 crore.
• Subsequent to this, the central government in October 2007 appointed PNGRB as the
regulator for the sector. Soon after, PNGRB sought application from companies operating
CGD networks before its appointment as the regulator.
• PNGRB on March 31, 2008 issued a notice to Adani Gas stating "it did not have the
requisite authorisation from the central government," the order said, adding the
company submitted separate applications for authorisation for Jaipur and Udaipur to the
regulator on August 28, 2008.
• On May 18, 2011, the Rajasthan government withdrew the NOC given to Adani Gas.
Subsequently on May 19, 2011, PNGRB rejected Adani Gas' application for both the cities.
• The company challenged the decision of PNGRB before Rajasthan High Court which
dismissed its petition. It then filed an appeal before the Supreme Court.
• "Supreme Court vide order dated January 29, 2019 quashed the order dated May 19, 2011
passed by the Board and directed the Board to take a fresh decision in the matter within four
weeks," the order said.
• In compliance with the Supreme Court order, PNGRB held personal hearing with Adani Gas
representatives.
• The company contended that "it was entitled to be granted authorisation by the Board in
view of the provision of 'deemed authorisation' as contained in Section 16 of the (PNGRB)
Act" for entities operating before the regulator came into existence.
• In its order, PNGRB said Adani Gas meets the minimum eligibility criteria but did not comply
with the requirement of making committed investments and physical progress in rollout of
CGD network in both the cities. Also, it had not tied up gas for supply through the CGD
networks.
• "The conclusion of the Board is that Adani Gas is in non-compliance with a substantial part of
the criteria,"
• On the company's claim of having made substantial investment in the two cities, PNGRB said
"no documentary evidence has been presented by Adani Gas to show the mammoth
expenditure it has supposedly incurred on the project."
19. Grant of authorisation
• PNGRB on sue motto basis; or
• Receipt of application of bid
• PNGRB of the opinion that it is necessary to have a common
carrier/contract carrier or CGD
• PNGRB may give wide publicity of this intention
• invite applications from interested parties
• The Board may select an entity in an objective and transparent
manner as specified by regulations for such activities
Suo Moto proposal
• PNGRB is of the opinion that a Natural Gas
Pipeline from Mumbai to Angul (Odisha)
via Nagpur should be developed for
establishment of National Gas Grid so that
consumers in Maharashtra, Chattisgarh
and Odisha can be served (Map-01).
Hence, the Board decided to initiate a suo-
motu proposal for laying, building,
operating or expanding natural gas
pipeline from Mumbai to Angul under
Regulation 4(2) of the Petroleum and
Natural Gas Regulatory Board (Authorizing
Entities to Lay, Build, Operate or Expand
Natural Gas Pipelines) Regulations, 2008.
EOI NG Pipeline Public Notice
Notice: No: Infra/NGPL/121/APGDC/SAPL/01/17
• The Petroleum and Natural Gas Regulatory Board has received Expression of Interest
(EOI) in terms of Regulation 4(1) of the Petroleum and Natural Gas Regulatory Board
(Authorizing Entities to Lay, Build, Operate or Expand Natural Gas Pipelines)
Regulations, 2008 from M/s Andhra Pradesh Gas Distribution Corporation Ltd.(APGDC)
to lay, build, operate or expand Nature Gas Pipeline from Srikakulam (AP) to Angul
(Odisha).
• The details of the aforesaid proposed projects as submitted by the entity in the format
as per schedule “A” of the aforesaid Regulations and the maps depicting the route
proposed by the entity for laying, building, operating or expanding natural gas pipeline
are available at the website of the PNGRB: www.pngrb.gov.in under the scrolling
window ‘what’s new’.
• In terms of Regulation 5(1) of the aforesaid regulations, the Board announces
commencement of the public consultation process and solicits views in writing from
any person or entity on the said EOIs, within 30 days of publication of this public notice
in the newspaper. The views may be submitted in the prescribed format to the
Secretary, PNGRB either through e-mail at [email protected] or through post at
aforesaid address.
NGPL Bid for Srikakulam (Andhra
Pradesh) - Angul (Odisha) Natural Gas
Pipeline