PNGRB denies licence to Adani Total Gas for development of CGD network in Noida

New Delhi: Passing an order on a matter dating back to 2008, the Petroleum and Natural Gas Regulatory Board (PNGRB) has rejected the application of Adani Total Gas for authorisation for the development of City Gas Distribution (CGD) network in Noida. In an order dated July 14, the watchdog said, “The Board hereby rejects ATGL (Adani Total Gas Ltd) for authorisation for the development of CGD network in Noida GA, application dated 25.06.2008, due to non-fulfilment of the requirements specified under the provisions of Regulations 18(2)(e) and 18(2)(i) of the PNGRB (Authorizing Entities to Lay, Build, Operate or Expand City or Local Natural Gas Distribution Networks) Regulations, 2008.”

Adani Total Gas sought authorisation for CGD network in Noida in 2008

PNGRB had received an application from Adani Total Gas, then known as Adani Energy Limited, on June 25, 2008 claiming authorisation for the development of CGD network in the Geographical Area (GA) of Noida. “The Board could not process ATGL application, at the time of its submission, as the matter related to authorisation of Noida GA was sub-judice before the Hon’ble Supreme Court of India in ‘M. C. Mehta Vs UoI (WP No. 13029/1985), prior to the establishment of the Board,” said the PNGRB in its order. However, the Supreme Court disposed of the case on September 6, 2022, saying that the matter should be decided by the regulator (PNGRB) or someone else. PNGRB, then, took up the matter on September 15, 2022.

Why was ATGL’s application rejected by PNGRB?

Quoting the CGD Authorisation Regulations, the PNGRB said that an entity claiming authorisation for a geographical area should have land for the purpose of setting up a City Gas Station (CGS) and should have procured the necessary equipment for setting up the station before it is appointed a distributor for that particular area. The CGS is the inlet point of the pipeline from where the natural gas enters into the CGD network. The PNGRB found Adani Total Gas lacking on both these fronts. “… regarding the necessary equipment procurement for CGS, AEL has submitted that ‘As per GAIL’s philosophy of providing connectivity, GAIL shall construct the CGS on the land provided by the CGD entity. Accordingly, GAIL shall be procuring and setting up CGS facilities,’” said the PNGRB referring to Adani’s submission on its failure to procure the equipment for setting up CGS in Noida.

The Board also said that Adani Total Gas had failed to procure Administered Price Mechanism (APM) gas for the development of CGD network in Noida, as required by the rulebook. “In this regard, it is pertinent to mention that APM Gas allocation was done by MoPNG for IGL (Indraprastha Gas Ltd) vide their letter dated 08.04.2004 and AEL was not included in that allocation. Further, the entity has not submitted any documentary proof regarding their claim for APM allocation by MoPNG. In view thereof, the Board is inclined to infer that ATGL not complying to the requirement of this sub-regulation,” said the PNGRB.

“It would not be out of place to mention that there is no data with respect to the entity’s present progress in Noida GA available with PNGRB. From their submission, it is observed that the entity is not operating in Noida at present and the current health status of their pipeline laid in Noida is also uncertain. In addition, it is also observed that although ATGL was allocated land for CNG stations in Noida GA, the entity is not operating any CNG station in Noida,” the PNGRB noted in its order.

IGL and Adani Total Gas

Indraprastha Gas Ltd (IGL), which had been retailing CNG in Delhi since the late 1990s, was given authorisation for the development of CGD network in 2004. It was also allocated APM gas for the CGD network in the area by the Ministry of Petroleum and Natural Gas. Adani sought authorisation for the GA of Noida in 2008.

While two PNGRB Members — AK Tiwari and Gajendra Singh — voted in favour of rejecting Adani Total’s application, Member (Legal) Ajit Kumar Pande opined that it is not prudent for him to pass any order on the matter as it is sub-judice before the appellate tribunal APTEL.

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