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CLAUSE
NO.
NOTIFIED RULE
PROPOSED AMENDMENTS
NOTIFICATION
Islamabad, the, 5th April, 2012
S.R.O 410 (I)/2012. In exercise of the powers S.R.O./2015. In exercise of the powers
conferred by Section 41 of the Oil and Gas conferred by Section 41 of the OilAND Gas
Regulatory Authority Ordinance, 2002, (XVII of Regulatory Authority Ordinance,2002(XVII of
2002), the Oil and Gas Regulatory Authority, 2002), the Oil and Gas Regulatory Authority,
with the approval of the Federal Government, is with the approval of the Federal Government,is
pleased to make the following rules, namely:
pleased to make the following amendments in
the OGRA Natural Gas ( Regulated Third
Party)Rules,2012,namely:-
1
(1)
(2)
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NOTIFIED RULE
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2
(1)
i
NOTIFIED RULE
PROPOSED AMENDMENTS
Definitions:
In these rules unless there is anything
repugnant in the subject or context,access
arrangement
means
an
access arrangement means an agreement
agreement(s) between transporter and shipper between transporter and shipper or between
or between transporter and other connected transporter and connected system operator as
system operator as approved by the Authority; approved by the Authority;
ii
iii
iv
capacity allocation means maximum daily capacity allocation means maximum daily
quantity (MO) in MMCFD of gas which can be quantity in MMCFD of gas which can be
delivered at a certain entry point and exit point, delivered at a certain entry point and exit
in
accordance
with
relevant
access point, in accordance with relevant access
arrangement;
arrangement;
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vi
vii
viii
connected
system
operator
means
operator of any connected system;
contracted capacity means firm capacity contracted capacity means firm capacity
that the transporter committed with gas that the transporter committed with gas
producers, its consumers, aggregated volumes producers, its consumers, aggregated volumes
contracted
with
other
shippers
for contracted
with
other
shippers
for
transportation
and/or
connected
system transportation at the time of capacity
operator at the time of capacity declaration in declaration in volumetric terms on daily,
volumetric terms on daily, monthly or yearly monthly, yearly or longer term basis under an
basis under an access arrangement;
access arrangement;
ix
xi
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xi(a)
PROPOSED AMENDMENTS
"Energy equivalence volume" means any such
volume which the transporter will deliver to
the shipper at the exit point in order to meet
the energy equivalence of the volume input at
the entry point;
xii
entry
point
means
the
flange
at entry
point
means the flange at
downstream of the meter at which the gas downstream of the meter at which the gas
delivered by shipper or by connected system delivered by shipper or by connected system
operator, is injected into the gas pipeline operator, is injected into the gas pipeline
transportation system of the transporter;
transportation system of the transporter. Or
into the interconnection pipeline of the
connected system operator, whichever is
applicable;
xiii
xiv
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xv
xvi
xvii
interconnection
and
operation interconnection
and
operation
arrangement means the agreement entered arrangement means the agreement entered
into between the transporter and any other into between the transporter and any other
transporters or LNG developer or LNG buyer for transporters or LNG developer or LNG buyer or
the purposes of interconnecting two systems connected system operator for the purposes of
and arranging the operational relations between interconnecting two systems and arranging the
the two, as approved by the Authority;
operational relations between the two, as
approved by the Authority.
xviii
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xix
xx
xxi
xxii
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xxiii
LNG terminal owner or operator means a LNG terminal owner or operator LNG
person developing the LNG import terminal for TO/O means a person developing the LNG
the provision of LNG receiving, storage and re- import terminal for the provision of LNG
gasification services at its terminal on a tolling receiving, storage and regasification services
basis;
at its terminal on a tolling basis.
xxiv
load
management
means
deliberate
actions sponsored by a transporter to reduce
peak demands, or curtail gas supply of its own
consumer whose supplies are on interruptible or
on as and when available basis, or to improve
system operating efficiency;
xxv
xxv(a)
Natural gas seller means a person who is
involved in sale of natural gas to a retail
customer of natural gas;
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xxvi
NOTIFIED RULE
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"negative Imbalance" means the imbalance "negative Imbalance" means the imbalance
created by the shipper if the shipper off-takes created by the shipper if the shipper off-takes
more quantity of gas from the gas pipeline more quantity of gas from the gas pipeline
transportation system than injected into it. transportation system than injected into it.
Shipper shall be allowed a negative imbalance Shipper shall be allowed a mutually agreed
of one percentage of contracted capacity as negative imbalance within the access
tolerance limit. any negative imbalance over the arrangement of one percentage of contracted
tolerance limit shall be liable to charges as capacity as tolerance limit. Any negative
agreed in access arrangement, in addition to imbalance over the tolerance limit shall be
transportation charges;
liable to charges as agreed in access
arrangement, in addition to transportation
charges. The total negative imbalances over
the agreed tolerance limit shall be considered
at the end of each invoicing period and
charged to relevant party accordingly;
xxvi(a)
xxvi(b)
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xxvii
xxviii
xxix
xxx
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xxxi
"positive Imbalance" means the imbalance "positive Imbalance" means the imbalance
created by the shipper if he off-takes less created by the shipper if he off-takes less
quantity of gas from the gas pipeline quantity of gas from the gas pipeline
transportation system than injected into it. transportation system than injected into it.
Shipper shall be allowed a positive imbalance of Shipper shall be allowed a mutually agreed
two percentage of contracted capacity as positive imbalance within the access
tolerance limit and any positive imbalance over arrangement of two percentage of contracted
the tolerance limit shall be liable to charges as capacity as tolerance limit. Any positive
agreed in access arrangement, in addition to imbalance over the tolerance limit shall be
transportation charges;
liable to charges as agreed in access
arrangement, in addition to transportation
charges. The total positive imbalances over the
agreed tolerance limit shall be considered at
the end of each invoicing period and charged
to relevant party accordingly;
xxxii
xxxiii
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xxxiv
xxxv
xxxvi
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xxxvii
shipper means a person that has an access shipper means a person that has an access
arrangement with the transporter to utilize the arrangement with the transporter to utilize the
natural gas pipeline transportation system natural gas pipeline transportation system
capacity. for transportation of natural gas capacity, for transportation of natural gas
between an agreed entry point and agreed exit between an agreed entry point and agreed exit
points, including but not limited to, producer of points, including but not limited to, producer of
natural gas, LNG developer, LNG buyer, RLNG natural gas, LNG developer, LNG buyer,
seller (as per integrated project or unbundled Connected System Operator, RLNG seller (as
project structure), RLNG reseller and RLNG end per integrated project or unbundled project
buyer or each singular natural gas consumer;
structure), RLNG reseller and RLNG end buyer,
natural gas seller, natural gas reseller, retail
consumers of natural gas or each singular gas
consumers;
xxxviii
xxxix
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xl
xli
xlii
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xliii
transportation loss (TL) means the transportation loss (TL) means the
quantity of gas, which is unaccounted for by a quantity of gas, which is unaccounted for by a
reasonable and prudent operator including but reasonable and prudent operator including but
not limited to measurement uncertainty, blow not limited to measurement uncertainty, blow
downs, venting or releases during regular downs, venting or releases during regular
operation and maintenance of the gas pipeline operation and maintenance of the gas pipeline
transportation system used as common carrier. transportation system used as common carrier.
The volume of such gas would be calculated on The volume of such gas would be calculated on
the basis of past three years historical data of the basis of moving average of past 3 years
actual losses in defined transmission pipeline unaccounted for gas allowed by the Authority
network and distribution or supply main network in its revenue requirement determinations
or segment. In case the historical data is not under the applicable rules. The transporter and
available the same shall be agreed upon by shipper may also mutually agree such
transporter and shipper through the access volume,which shall not be less than the volume
arrangement and shall be approved by the allowed by the Authority.
Authority;
xliv
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xlv
(2)
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3
(1)
Scope of Services:
The transportation service consists of taking The transportation service consists of taking
delivery of the gas made available by a shipper, delivery of the gas made available by a
at one or more entry points along the gas shipper, at one or more entry points along the
pipeline transportation system and delivering an gas pipeline transportation system and
equivalent quantity of gas subject to adjustment delivering an energy equivalent quantity of gas
on account of System Use Gas (SUG), subject to adjustment on account of System
Transportation Loss (TL) and Line Pack (LP) at Use Gas (SUG), Transportation Loss (TL) and
one or more exit points in accordance with the Line Pack (LP) at one or more exit points in
terms and conditions laid down in the access accordance with the terms and conditions laid
arrangement
between
the
shipper
and down in the access arrangement between the
transporter as approved by the Authority.
shipper and transporter as approved by the
Authority.
(2)
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(2)
(3)
Shipper or his authorized nominee shall own, Shipper or connected system operator or his
operate and maintain facilities upstream of authorized nominee shall own operate and
transporters onshore entry point at his own maintain facilities upstream of transporters
cost and risk.
onshore entry point at his own cost and risk.
(4)
(5)
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(6)
(7)
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Pipeline Capacity:
(1)
(2)
(3)
(4)
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(1)
(2)
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7
(1)
(2)
Transporter may operate and maintain the entry Transporter may operate and maintain the
and exit point facilities and interconnection entry
and
exit
point
facilities
and
pipelines at the owners cost and risk. Ownership interconnection pipelines at the owners cost
of such facilities may belong to shipper or and risk. Ownership of such facilities may
connected system operator or transporter, as belong to shipper or connected system
the case may be, and is to be agreed in the operator or transporter, as the case may be,
access arrangement or in the interconnection and is to be agreed in the access arrangement
and operation agreement.
or in the interconnection and operation
arrangement.
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(1)
RLNG Specification:
Acceptable RLNG specification range at the
entry point shall be as agreed between the
shipper and the transporter under the access
agreement which shall be within the limits as
given in Schedule-III.
(2)
(3)
(1)
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(2)
(3)
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Specific
requests
from
prospective
shippers other than LNG developer or LNG
buyer:
(1)
(i)
(ii)
(iii)
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(iv)
(2)
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(1)
Capacity allocation:
Capacity on firm basis shall be made available
for a minimum of one year. However, the
maximum period for capacity allocation shall be
as agreed in the access arrangement between
the transporter and shipper.
(2)
(3)
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(1)
(2)
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(3)
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The transporter shall be paid for transportation The transporter shall be paid for transportation
charges for the contracted capacity in terms of charges for the contracted capacity in terms of
volume at the entry point and shall account for volume at the entry point and shall account for
this gas in terms of equivalent energy value at this gas in terms of equivalent energy value at
exit point irrespective of volume.
exit point irrespective of volume. Any volume
of gas for energy equivalence at the exit point
shall be on transporter account and such
make-up volume shall be allowed as
adjustment by treating it as deemed delivery /
sale by the Authority for computing transporter
unaccounted for gas under the applicable rules
/ policy guidelines, as the case may be;
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(4)
The available capacity shall be contracted on a The available capacity shall be allocated on a
use it or lose it basis. In case the contracted use it or lose it basis. In case the contracted
capacity utilization is below seventy percent in capacity utilization is below seventy percent in
two calendar years, the unutilized part of the two calendar years, the unutilized part of the
contracted capacity may stand cancelled. The contracted capacity may stand cancelled. The
relevant terms and conditions in the existing relevant terms and conditions in the existing
access arrangement shall be modified and access arrangement shall be modified and
approved by the Authority keeping in view the approved by the Authority keeping in view the
past performance with respect to the capacity past performance with respect to the capacity
utilization.
utilization.
(5)
The allocated capacity shall be through a The allocated capacity shall be through a
contract between shipper and transporter under contract between shipper/connected system
access arrangement in form of maximum daily operator and transporter under access
quantity.
arrangement in form of maximum daily
quantity.
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(6)
(7)
13
(1)
(2)
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(1)
Nominations:
A shipper shall intimate to the transporter about
the quantities that it intends to deliver at a
particular entry point and off-take at a particular
exit point from the gas pipeline transportation
system on weekly basis on every Monday at
0800 hours PST in respect of the week starting
from immediate following Monday.
(2)
15
Transportation Tariff:
The transporter shall submit the transportation
tariff application to the Authority for approval
along with the prescribed fee.
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(1)
(2)
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(5)
(6)
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(1)
(2)
NOTIFIED RULE
PROPOSED AMENDMENTS
Gas, Line Pack and Transportation Losses: System Use Gas, Line Pack and Transportation
Losses:
Quantum of System Use Gas (SUG),Line Pack
(LP) and Transportation Loss (TL) (calculated at
maximum allowable operating pressure of the
pipeline) shall be specified in the access
arrangement. A shipper shall provide the
natural gas for SUG, LP and TL in proportion to
its capacity allocation in the gas pipeline
transportation system.
In case of dedicated pipeline the shipper shall
provide its gas for LP and at the termination of
access
arrangement,
recoverable
volume
equivalent to the related LP shall be delivered to
the shippers customer or compensated as per
access arrangement.
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(1)
Planned Maintenance:
The transporter is required to draw up, inform
and place on its website a maintenance plan for
a defined period identifying those entry and exit
points where gas flows may be restricted due to
maintenance works, the extent of the
restrictions and when they shall occur in
accordance with the terms and conditions of the
access arrangement. The transporter shall
prepare the plan to minimize disruption to
affected
parties
and
may
request
for
information from shippers about their intended
entry and exit flows.
(2)
(3)
19
Operational Planning:
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(1)
Shipper shall on a periodic basis of at least sixty Shipper shall on a periodic basis of at least
calendar days provide nomination of quantities sixty calendar days provide nomination of
that it desires to transport through the gas quantities that it desires to transport through
pipeline transportation system in line with the the gas pipeline transportation system in line
provisions of rule 6.
with the provisions of rule 5.
(2)
(3)
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(4)
(5)
20
(1)
Measurement of Gas:
At each entry point, there shall be measurement
equipment necessary to measure the quantity
of gas flown, pressure and temperature. Either
at the entry point or in the AHA before the entry
point, there shall be equipments to measure gas
composition, heating value, H2S content, Water
& hydrocarbon dew point. Values of such
parameters shall be specified in the ScheduleIII.
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(3)
(4)
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21
(1)
(2)
(3)
22
Load Management:
RLNG end buyers for whom shipper and Transporter shall not subject shipper gas to any
transporter have entered into an access load management to the extent of access
arrangement shall not be subject to any gas arrangement volumes only.
load management by the transporter to the
extent of access arrangement volumes only.
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23
Obligations:
(1)
(2)
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24
Emergencies:
In the event of emergencies the transporter
may take necessary measures as agreed by the
shippers and the transporter, or by transporter
and connected system operator in the access
arrangement and interconnection and operation
arrangement on mutually agreed terms, as the
case may be.
25
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Fees:
The shipper/transporter shall pay the following The shipper/transporter shall pay the following
fees under the rule sub rule (1) and (6) of rule fees under the rule sub rule (1) and (6) of rule
13 and 16 respectively, namely:
12and 15 respectively, namely:
S/N
1
2
3
4
27
(1)
Miscellaneous:
These Rules
shall not have affect on the
agreement signed by existing gas utility
companies i.e. Sui Northern Gas Pipelines
Limited and Sui Southern Gas Company Limited,
prior to coming of these rules.
(2)
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(1)
a
NOTIFIED RULE
Access Arrangements:
The transporter shall place on the website the
following which inter alia includes,
available capacity at entry and exit points shall
be updated on regular basis, but as at least
once a month;
d
e
f
g
h
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SCHEDULE - I
[See Rule 5(1)]
FORMAT FOR DECLARING CAPACITY OF
GAS PIPELINE TRANSPORTATION SYSTEM
BY TRANSPORTER
S/N
1
2
3
4
5
Description
Name of person:
Name of pipeline segment/ section:
Section wise capacity on the pipeline (to be
furnished for each section separately):
(a) Number of sections
(b) Name of section with start and end point:
(c) Capacity - (i). Volume terms
Number of AHAs:
Number of entry points on the pipeline route:
6
7
8
9
10
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be
furnished
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12
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PROPOSED AMENDMENTS
Technical parameters:
(a) Inlet pressure at entry point:
(b) Calorific value band at entry point:
(c) Temperature:
(d) Other elements as per Schedule III
Status of extra capacity available in the gas
pipeline transportation system on common
carrier basis:
13
14
15
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SCHEDULE II
[See rule 5(3) & rule 11(3)]
FIRST
COME
FIRST
SERVED
CRITERIA
PROPOSED AMENDMENTS
(FCFS)
In order to ensure transparent and nondiscriminatory third party access under these
Rules, the prospective shipper shall submit
following information and documents along with
projected/firm timeline for compliance under
First Come First Served Criteria, as set out
hereunder, for capacity allocation.
(a)
(b)
(d)
(e)
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(f)
(g)
(h)
(i)
(j)
(k)
(l)
full
(m)
(n)
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(o)
PROPOSED AMENDMENTS
(o) The allocated capacity would automatically
be waived off if the final RLNG purchase & sale
agreement is not signed within thirty calendar
days of capacity allocation by the Authority.
For shippers other than LNG developers/LNG For shippers other than LNG developer / LNG
buyers/ RLNG buyer.
buyer;
Submission to the Authority of:
Gas sale and purchase agreement signed with
(i) RLNG Purchase and Sale Agreement or HOA producers of natural gas or natural gas seller
signed with an RLNG seller/RLNG reseller/ and
or natural gas reseller or the RLNG purchase
and sales agreement or HOA signed with RLNG
seller/RLNG reseller,as the case may be.
The
allocated
capacity
would delete.
automatically be waived off if the final
RLNG Purchase and Sale Agreement is
not signed within fifteen (15) calendar
days of capacity allocation by the
Authority.
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NOTIFIED RULE
PROPOSED AMENDMENTS
The Authority shall undertake a due diligence of The Authority will undertake a due diligence of
the achievement of the above noted requisites the achievement of the above noted requisites
and project milestones and award capacity and project milestones. and a Awarding of new
allocation to the applicant on FCFS basis and in capacity allocation to the applicant shall be
terms of price competitiveness.
based on FCFS basis and in terms of price
competitiveness.
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Soon after the capacity allocation and not later Soon after the capacity allocation , the Shiper
than thirty days of dry financial close, the shall furnish to the Authority the performance
shipper shall furnish to the Authority the bank
gurantee
equal
to
one
year's
performance bank guarantee US$ five million transportation tariff in US$
or Rupee
from a reputable bank acceptable to the equivalent from a reputable bank acceptable to
Authority, encashable in Pakistan. Failure to the Authority, encashable in Pakistan. Failure to
achieve the above milestones may tantamount achieve the above milestones or compliance
to cancellation of allocated capacity and with the Authority's directions may tantamount
encashment of performance bank guarantee.
to cancellation of allocated capacity and
encashment of performance bank guarantee.
The
transporter
shall
only
start
their
infrastructure development after achieving the
wet financial closure or disbursement date by
the developers subject to the prior approval of
the Authority.
The Authority shall allocate/book capacity in The Authority shall allocate/book capacity in
transporters
gas
pipeline
transportation transporters
gas
pipeline
transportation
system:
system. The following rules shall apply for the
allocated/booked capacity:
(a) For the connected system operators for the
period as per the concession agreement with
respective port authority. If either of the below
cases happen, then allocated capacity to
connected system operator may be cancelled
by the Authority.
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For the shippers other than LNG developer/LNG For the shippers other than LNG developer/LNG
buyer, as per the period of the Gas/RLNG buyer, as per the period of the Gas/RLNG
Purchase and Sale Agreement, under which Purchase and Sale Agreement, under which
capacity will be allocated. In case of any of the capacity will be allocated. In case of any of the
below, then capacity allocated to shipper shall below, then capacity allocated to shipper shall
be cancelled by the Authority in a timely be cancelled by the Authority in a timely
manner.
manner. If the cancelled capacity is originally
assigned/transferred from an LNG developer as
per provisions of clause sub rule (2) of rule 12,
then cancelled capacity of the shipper shall
return back to original owner.
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S/N
1
2
3
4
5
6
7
8
9
10
11
12
Parameters
Limit
Hydrocarbon dew point (Degree Fahrenheit,
max.)*
32*
Hydrogen Sulphide (grains/100 SCF, max.)
0.24
Total Sulphur (grains/100 SCF. Max)
3.5
Carbon Dioxide (mole % max.)
3
Nitrogen (mole % max.)
7**
Oxygen (mole % max.)
0.2
Total Inerts (mole % max.)
10
Temperature (Degree Fahrenheit, max.)
120**
Water Content (Lbs/MMSCF, max)
7**
Pressure (PSIG)
**
Calorific value (BTU/SCF)
925-1150
Wobbe Index (BTU/SCF)
1290+ 5%
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Schedule III(A)
Natural
Gas
quality
for
entry
to
transporter gas pipe line Transportation
System.
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SCHEDULE - IV
[See rule 15 and 19(4)]
TRANSPORTATION TARIFF
DETERMINATION OF TRANSPORTATION
CHARGES
1
In order to encourage a level playing field and
market development it is important that tariffs
for access to and use of gas pipeline
transportation systems should be as transparent
and non-discriminatory. The tariffs should be
cost reflective and they should still provide
sufficient incentive for efficient management,
system upgrade and expansion i.e. send
adequate signals for investments.
2
Achieving
cost
reflectiveness
requires
separating and allocating correctly the cost
element to different functions involved in
transportation (accounting segregation of
Transmission, Distribution, Sales etc), defining a
calculation
methodology
and
design
of
tarification.
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3
The key practical issues in tarification design
are: the income, the system owner will be
allowed to collect from the shippers and the way
this is recovered from the shippers. Due
consideration is to be given to the value of
assets being used, the appropriate rate of
return, depreciation, operating costs (variable
and fixed) and other similar financial matters
which may arise at the time of determination of
tariff.
4
It is essential that the value of regulated assets
(RAV) used for transportation is realistically
ascertained through accounting segregation and
determined to reflect current replacement cost
since the original cost has depreciated due to
which the allowable revenue declines as the
capital base fall, particularly in case of mature
pipeline system like SSGCL and SNGPL.
5
In order to recover the annual revenue
requirement, the transportation tariff shall
consist of following charges:
a
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For return calculation purposes the existing For return calculation purposes the existing
fixed assets involved in transportation will be fixed assets involved in transportation will be
valued at replacement cost while additional valued at replacement cost, less accumulated
investments at actual cost. Revaluation of fixed depreciation
thereon
while
additional
assets in operation including reassessment of investments as appearing at historical written
their economic life for working out depreciation down cost.
Revaluation of fixed assets in
in respect of gas pipeline transportation system operation including reassessment of their
shall be carried out for determining net economic life for working out depreciation in
replacement value as on June 30, 2011 which respect of gas pipeline transportation system
may be reviewed after every 2 years.
shall be carried out for determining net
replacement value as on June 30, 2014 which
may be reviewed after every 5 years.
Depreciation on existing fixed assets involved in Depreciation of existing fixed assets involved in
transportation and used as common carrier will transportation and used as common carrier will
be based on the revised economic life of such be 2.5% based on economic life of such assets
for 40 years.
assets.
10
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11
c
12
13
WORKED
SAMPLE
CLACULATION
TRANSPORTATION TARIFF UNDER
SCHEDULE
OF
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Operating and Maintenance Cost
Depreciation on replacement value of
segment
ROA on replacement value of the segment
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the
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Mo
deleted
subsequently.
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as
not
used
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connected
included.
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system
operator
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Authority
need
not
approve
available capacity.
consequential amendment per 5(2)
above.
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correction
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