The planned amendment also aims to eliminate the current provisions for imprisonment up to three years for marketing oil and gas or building pipelines and liquefied natural gas terminals without the regulator’s nod, the people said.
The government aims to introduce the amendment to the PNGRB Act, 2006 in the budget session of Parliament. The amendment will arm the regulator with appropriate legal provisions to deal with the emerging opportunities and challenges in the hydrocarbon sector, said the people.
“The Act needs to be strengthened in some ways so that PNGRB has the powers to deal with new molecules such as hydrogen and ammonia as well as new market mechanisms such as gas trading or the exchange,” said one of the persons, who did not wish to be identified.
The Act covers only fossil fuels.
Hydrogen, ammonia and biogas are likely to play a big role in meeting the country’s energy needs in future. Companies are piloting blending of hydrogen with natural gas while the government is considering mandating the use of green hydrogen and ammonia by refiners and fertiliser plants. Biogas is already being mixed with natural gas and supplied to customers.
The amendment may also provide the legal backing for setting up a transport system operator, which has been delayed for nearly two years. The transport system operator is expected to manage the common carrier capacity of all natural gas pipelines in the country.
One key driver of the planned amendment is to bring back some power to the government so that the latter can intervene quickly to resolve issues that fester for long, the person cited above said. A key issue has been the inability of the PNGRB to end the city gas companies’ exclusive rights to operate in dozens of licensed areas. The current law empowers the regulator to decide on the period of exclusivity for city gas companies but its attempts at ending exclusivity have met with legal challenges.
The PNGRB has been without a chairman for two years. The government has run the candidate selection process multiple times but hasn’t been able to appoint a chairman yet.
Last month, the regulator decided to have a uniform tariff for natural gas pipelines, which will help lower transport cost for consumers sitting far from the supply sources.
