New pipeline policy ends GAIL monopoly

However, the entities will have to seek authorization for laying the pipelines from the government regulator.

At present, Gail is the only company building trunk gas pipelines in the country. The new policy, proposing the entry of other players, will put an end to its monopoly status.

According to official sources, the petroleum ministry is likely to announce the final gas pipeline policy imminently, at which time laying inter-state pipelines will be open for competition and anyone offering “the least terms of transportation tariff” and the “most efficient means of operations”. The government says that all pipelines laid on the common-carrier principle should have at least 25% more capacity than that which is required by the owner for leasing to third-party users.

The new regime will require companies wishing to undertake pipeline projects to first approach the ministry with their proposals. After receiving clearance from the government, the proposal will be published, inviting capacity booking from interested parties within a period of two months from the date of publication. After this, the promoting company will have to approach the ministry to finalize the capacity and tariff of the pipeline, based on which proposals for acquisition of the right of usage are accepted.

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