Petroleum regulator PNGRB has rejected Adani Total Gas Ltd’s application for a license to retail CNG to automobiles and piped gas to household kitchens in Noida, on the outskirts of the nation’s capital, on the grounds that it does not does not meet the criteria.
The Petroleum and Natural Gas Regulatory Board (PNGRB) in an order dated July 14 said Adani Total Gas Ltd did not meet the requirements of the law and its application was therefore dismissed.
Adani has been considering a Town Gas Distribution (CGD) license for towns surrounding the nation’s capital for nearly two decades now.
A company may only retail CNG or piped natural gas in a city if it is authorized by the regulator or obtained authorization from the central government before the regulator was established.
While Indraprastha Gas Ltd – the state-owned joint venture – had been licensed for the National Capital Territory of Delhi, Adani disputed IGL’s claim for neighboring towns.
The PNGRB, created in 2006, received town gas authorizations issued to companies by the State before its existence.
IGL, which had been retailing CNG in Delhi’s NCT since the late 1990s in accordance with Supreme Court and union government orders, was granted a town gas license.
The company also secured the same for Noida in Uttar Pradesh citing an April 8, 2004 authorization letter from the central government.
IGL has been retailing CNG to automobiles and piped natural gas to home kitchens and industries in Noida for over a decade and a half now.
Adani Energy Ltd (AEL), which later created Adani Total Gas Ltd (ATGL) after French energy giant TotalEnergies took a stake in the company, on June 25, 2008, applied for permission to develop a urban or local natural gas distribution network (CGD network) for the geographical area (GA) of Noida.
The regulator was unable to process the application at the time of its submission and the licensing issue for Noida was taken to the Supreme Court. In September last year, the top court ruled on a motion saying the regulator was free to adjudicate the dispute.
Subsequently, the PNGRB began processing Adani’s application.
He rejected Adani’s candidacy, with two of the three members voting for it. A third member, Ajit Kumar Pande, Member (Legal), felt that it was not prudent for the PNGRB to pass an order as the case had been pending since Adani had filed a petition with the court of APTEL call.
Fellow PNGRB members Gajendra Singh and AK Tiwari voted to reject the candidacy.
“In considering ATGL’s application, the Board has considered the materials submitted with the application dated June 25, 2008, as well as their submissions made at the meeting and additional materials submitted thereon.
“It would not be out of place to mention that the Board unanimously decided to deny ATGL’s application at the 124th meeting of the Board held on April 25, 2023,” the PNGRB said in the order.
The PNGRB said an entity could be considered to be operating before the establishment of the regulator if it had purchased the equipment needed to erect the city gate station (CGS).
ATGL’s application, he said, stated that “the land allotment for CGS has been withdrawn from the authority of Noida”.
The application stated that the company had a land possession certificate from the Noida authority for five locations, but that the company had “not purchased the necessary equipment”.
“Therefore, the Board is inclined to find that ATGL (does not) comply with the requirement (of regulation under the PNGRB),” the order reads.
The PNGRB also stated that the Ministry of Petroleum had allocated gas to IGL for retail sale in the form of CNG and piped natural gas (PNG) in Noida in a letter dated April 8, 2004. “And AEL was not not included in this allowance.”
The company, he said, provided no documentary evidence to support its claim that it got a gas allowance.
“It would not be out of place to mention that there is no data regarding the current progress of the entity (Adani) in Noida GA available with PNGRB. From their submission, it is observed that the entity n is not operating in Noida at present and the current health status of their pipeline laid in Noida is also uncertain,” he said.
Further, “It is also observed that although ATGL has been allocated land for CNG stations in Noida GA, the entity does not operate any CNG stations in Noida,” he added.
The regulator said that ATGL had been given sufficient opportunities and “the Board hereby rejects ATGL for development permission for the CGD network in Noida GA due to non-compliance with the requirements” of the PNGRB Act.