Tuesday, October 4, 2022

Govt to set up independent operator for common carrier gas pipelines, add 100 districts to CGD network

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  • An independent gas transport system operator will be crucial as it will level the playing field, which has largely been dominated by state-run oil and gas companies

  • Ujjwala scheme, which has already benefitted 8 crore households, will be extended to cover 1 crore more beneficiaries

New Delhi: Yielding to a long-standing demand from the industry, the government has announced its plan to set up an independent gas transport system operator for facilitation and coordination of booking of common carrier capacity in all-natural gas pipelines on a non-discriminatory open access basis. The announcement was made by Finance Minister Nirmala Sitharaman in her 2021-22 Budget speech on Monday. An independent gas transport system operator will be crucial as it will level the playing field, which has largely been dominated by state-run oil and gas companies, for all gas marketers.

How will this announcement impact the sector?

The announcement comes along with another one where the minister said that the government will undertake monetisation of pipelines owned by state-run GAIL (India) Ltd, Indian Oil Corporation (IOC) and Hindustan Petroleum Corporation Ltd (HPCL). Both the announcements are aimed at freeing up the sector from government control and opening it up for participation to private players.

ALSO READ: Natural gas production in Dec’20 falls short of target by 23%

It must be noted that a plan to bifurcate GAIL’s pipeline and marketing business is already in the pipeline. The idea behind the decision is to remove the advantage that GAIL enjoys due to its control over the country’s gas pipelines. An independent gas transport system operator will allow open and transparent access to common carrier gas pipelines for all gas marketers, who can book capacities depending on their availability.

Govt to add 100 districts to CGD network, build gas pipeline in J&K

Among other key announcements made by Finance Minister Nirmala Sitharaman is the government’s plan to add 100 more districts to the City Gas Distribution (CGD) network in the next three years. The plan is in line with the government’s thrust on increasing the share of natural gas in India’s energy mix from the current 6 percent to 15 percent by 2030. The Ministry of Petroleum and Natural Gas has placed a lot of importance on increasing the georgraphical areas covered under the CGD network to improve access to the fuel. Sitharaman also said that a gas pipeline project will be taken up in the Union Territory of Jammu and Kashmir.

Ujjwala scheme, which has already benefitted 8 crore households, will be extended to cover 1 crore more beneficiaries, said the minister.

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