Regulator rejects Adani's application for Noida city gas licence

New Delhi: Oil regulator PNGRB has rejected Adani Total Gas Ltd's application for a licence to retail CNG to automobiles and piped gas to household kitchens in Noida, on the outskirts of the national capital, on grounds that it does not meet criteria.

The Petroleum and Natural Gas Regulatory Board (PNGRB) in an order dated July 14 said Adani Total Gas Ltd does not fulfill the requirements of law and so its application is rejected.

Adani has been eyeing a city gas distribution (CGD) licence for cities adjoining the national capital for nearly two decades now.

A firm can retail CNG or piped natural gas in a city only if it is authorised by the regulator or had permission from the central government prior to the regulator coming into existence.

While Indraprastha Gas Ltd - the joint venture of state-owned firms - had been authorised for the National Capital Territory of Delhi, Adani has challenged IGL's claim for adjoining cities.

PNGRB, which came into being in 2006, accepted city gas authorisations given to companies by the central government prior to its existence.

IGL, which had been retailing CNG in the NCT of Delhi since the late 1990s as per the orders of the Supreme Court and the union government, was given a city gas licence.

The firm also got the same for Noida in Uttar Pradesh citing an April 8, 2004 authorisation letter from the central government.

IGL has been retailing CNG to automobiles and piped natural gas to household kitchens and industries in Noida for over one-and-a-half decade now.

Adani Energy Ltd (AEL), which later began Adani Total Gas Ltd (ATGL) after French energy giant TotalEnergies took a stake in the company, on June 25, 2008, claimed authorisation for the development of a city or local natural gas distribution network (CGD network) for the geographical area (GA) of Noida.

The regulator could not process the application at the time of its submission and the issue of authorisation for Noida went to Supreme Court. The apex court in September last year disposed of a petition saying the regulator was free to proceed in deciding on the dispute.

Thereafter, PNGRB began processing the Adani application.

It rejected Adani's application with two out of the three adjudicating members voting for that. A third member, Ajit Kumar Pande, Member (Legal), opined that it was not prudent for PNGRB to pass an order as the case was sub-judice since Adani had filed an application with appellate tribunal APTEL.

Other PNGRB Members, Gajendra Singh and A K Tiwari voted in favour of the rejection of the application.

"The Board while examining the ATGL application considered the documents submitted with the application dated June 25, 2008, along with their submissions made during the meeting and additional documents submitted thereon.

"It would not be out of place to mention that the Board decided unanimously to reject the ATGL application in the 124th Board Meeting held on April 25, 2023," PNGRB said in the order.

PNGRB said an entity could be considered operating prior to the coming into existence of the regulator if it had procured the necessary equipment for erecting the city gate station (CGS).

ATGL application, it said, stated that "allotment of land for CGS has been taken from Noida authority." The application made out that the company had a land possession certificate from Noida authority for five locations but the firm had "not procured any necessary equipment." "Therefore, the Board is inclined to say that ATGL (is) not complying to the requirement (of the regulation under PNGRB Act)," the order said.

PNGRB also stated that the oil ministry had made a gas allocation to IGL for retailing as CNG and piped natural gas (PNG) in Noida vide a letter dated April 8, 2004. "And AEL was not included in that allocation." The company, it said, had not submitted any documentary proof to support its claim that it has got gas allocation.

"It would not be out of place to mention that there is no data with respect to the entity's (Adani'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," it said.

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," it added.

The regulator said ATGL had availed sufficient opportunities and "the board hereby rejects ATGL for authorisation for the development of CGD network in Noida GA due to non-fulfilments of requirements" of PNGRB Act.