| Date | Version | January 18, 2021 | 1.0 |
| Keywords | PNGRB, CGD, City or Local Natural Gas Distribution Networks, Access Code, Standardized Access Agreement |
| List of Legislation Referred |
|
| Jurisdiction | India |
| Domain | Natural Gas | Downstream |
Introduction
The Petroleum and Natural Gas Regulatory Board (Access Code for City or Local Natural Gas Distribution Networks) Regulations, 2020 establish a framework for providing non-discriminatory access to City Gas Distribution (CGD) Networks. The regulations seek to promote transparency, competition and efficient utilisation of natural gas infrastructure.
In a Nutshell
- The Access Code enables third-party shippers to access a City or Local Natural Gas Distribution Network on a non-discriminatory basis.
- Capacity booking and standardised access arrangements form the foundation of the regulatory framework.
- The regulations provide detailed procedures relating to capacity declaration, booking, transportation, balancing, charges and operational obligations.
Capacity Declaration
Authorised entities are required to determine and declare available capacities relating to entry points, exit points, CNG exit points, PNG distribution points and CNG compression facilities.
Such information must be published within the prescribed timelines after declaration of the CGD Network as a common carrier or contract carrier.
Capacity Booking
- Authorised entities must publish information inviting capacity booking requests.
- Interested shippers are required to submit offers within the prescribed period.
- Capacity allocation must be finalised through a transparent process and documented through an Access Arrangement.
- Additional booking opportunities must be provided whenever additional capacity becomes available.
Third-Party Access
Where a CGD Network has been declared a common carrier, the authorised entity must provide access to third-party shippers for CNG and L-CNG stations on a non-discriminatory basis.
The regulations also address situations requiring installation of additional compression facilities and prescribe timelines for communication where technical constraints prevent such expansion.
Obligations of the Authorised Entity
- Comply with all applicable PNGRB regulations and guidelines.
- Receive gas at agreed entry points and deliver gas at agreed exit points.
- Manage and operate the CGD Network.
- Act as the supplier of last resort for domestic customers in case of shipper default.
Obligations of the Shipper
- Comply with all applicable regulations before delivery and after receipt of gas.
- Deliver gas at agreed entry points and receive gas at agreed exit points.
- Ensure that supplied gas complies with prescribed quality parameters.
- Pay transportation charges and provide guarantees or security as required.
- Remain responsible for billing and collection of dues from customers.
Gas Parameters
The authorised entity must specify acceptable limits for gas pressure, temperature, calorific value and other quality parameters on a non-discriminatory basis.
If supplied gas does not meet the required specifications, the authorised entity may either reject the gas or accept it and recover the applicable service costs.
Charges
The shipper is required to pay transportation charges and other applicable fees for the use of the CGD Network.
- Transportation charges for CGD and CNG.
- Overrun charges where applicable.
- System imbalance charges.
- Off-specification gas charges.
- Applicable taxes and duties.
- Other approved charges such as ship-or-pay, transport-or-pay or system upgrades.
The regulations also provide for escrow mechanisms and settlement procedures relating to imbalance and overrun charges.
System Use Gas, LUAG and Line Pack
- System Use Gas (SUG) and Lost and Unaccounted for Gas (LUAG) are to be absorbed by the authorised entity.
- Line Pack (LP) responsibilities are also borne by the authorised entity and not passed on to shippers.
Operating Procedures and Emergencies
The Access Arrangement must contain procedures governing normal operations and emergency situations.
Emergencies may arise due to gas leakage, network safety concerns, unsafe gas quality, pressure issues or any other situation reasonably believed to threaten network integrity or public safety.
Confidentiality of Information
Both authorised entities and shippers are required to maintain confidentiality of all information exchanged under the regulatory framework, including operational data, submissions, communications and commercial information.
Access Arrangement
The Access Arrangement serves as the contractual framework governing access to the CGD Network and must comply with the requirements prescribed under Schedule-I of the Regulations.
The standardised access arrangement covers services, obligations, metering, gas quality, scheduling, balancing, overruns, invoicing, communications, curtailment, emergencies and other operational matters.
Conclusion
The Access Code Regulations, 2020 represent a significant step towards introducing transparency, competition and open access in India’s City Gas Distribution sector. By standardising capacity allocation, operational procedures and access arrangements, the regulations aim to create a fair, efficient and competitive natural gas market while ensuring reliable service delivery and network integrity.
