India, the emerging gas hub – Part 1

Government support in the form of enabling regulation for new exploration and production, increasing prices, and infrastructure approvals, has helped the growth of the gas industry in India. 

 Recent regulations
 Potential regulations under discussion/consideration

  •  New Exploration Licensing Policy (NELP I-VIII)
  • Deregulation of LNG terminals
  • 100 percent FDI in upstream
  • Removal of customs duty on LNG
  •  Open Acreage Licensing Policy (OALP) in lieu of NELP – to enable bidding for any acreage anytime, instead of for fixed blocks and at fixed timeslots
  •  Policy for unconventional resources

  • Open access gas carriage
– Third party carriage allowed on pipelines with mandated 25 per cent extra capacity
– Pipeline laying made competitive
–‘Infrastructure’ status for pipelines
  •  Pipeline tariff fixation methodology for the national gas grid
  • Uniform postal tariff/uniform grid tariff to avoid cascading effect

  •  Arm’s length transactions between mid- stream and downstream companies
  • NELP gas allocation as per Gas Utilisation policy
  • Open access and private participation in power generation and distribution
  • Nutrient based subsidy, import parity pricing and higher price allowance for fertiliser sector 
  • ‘Infrastructure’ status for city gas networks
  • Tax rationalisation/introduction of GST
  • Declared Goods Status for natural gas
  • Peaking power regulation to enable time of day tariffs
  • Evaluating national gas highways to promote gas

  • Administered pricing mechanism (APM)
  • Production sharing contracts (PSCs)
  • Market price gas (MPG)
  •  Price pooling

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