oman Government of India Ministry of Petroleum and Natural Gas Shastri Bhawan, New Delhi-110001 (Fax: 23389985) L-16021/9/2013-GP dated the March 5, 2015 To 1. Secretary, PNGRB, New Delhi. 2. CMDs of IOC/BPCL/HPCL/GAIL 3. MDs of all CGD enti 8. Subject- Draft Guidelines for granting Marketing Rights for CNG as Transportation Fuel, including setting up CNG Stations. Sirs 1am ditecied fo say that the draft guidelines for granting Markeling Rights for CNG as Transportation Fuel, including setting up CNG Stations have been hosted in the MoP&NG's website petroleum.nic.in, 2. It is requested that your comments/views on the draft guidelines may kindly be furnished to this Ministry within 15 days. Yours faithfully, C 2 rn (S.P, Agarwal) Under Secretary fo the Government of Indic Tel.No. 23388652Draft Guidelines for Granting Marketing Rights for CNG, as Transportation Fuel, including setting up CNG Stations Resolution No. ., In addendum to the Resolution No. P- 23015/1/2001-Mkt dated 8" March, 2002, the Central Government hereby includes “Compressed Natural Gas” (CNG) as a transporlation fuel, in addition to the other transportation fuels, namely, High Speed Diesel (HSD), Motor Spirit (MS) and Aviation Turbine Fuel (ATF), This addendum is being issued for the purpose of granting marketing rights to entities for CNG, including setting up of CNG Stations, as follows :- 1. Definitions: In this Resolution, unless the context otherwise requires - a. "Compressed Natural Gas or CNG" means natural gas used as fuel for vehicles, typically compressed to the pressure ranging from 200 to 250 bars, in the gaseous state; b. “CNG Station” means the filing station where one or more dispensing units are provided for sale of compressed natural gas; The expression “CNG Station’ includes CNG Mother Station, CNG Online Station, CNG Daughter Station and CNG Daughter Booster Station, as described in the Gas Cylinder Rules, 2004. The activities under CNG Station would include compression, storage, handling and transportation of CNG through cascades, as may be required, for marketing, sale, and dispensing of CNG; c. “Eligible Entity”: means a person, association of persons, firm, company or co-operative society, by whatsoever name called or referred to, other than a dealer, and who are granted marketing rights for CNG, including setting up CNG stations, as laid down under the Clause 2 of this resolution. All other words and expressions used in this Resolution and not defined, but defined in the PNGRB Act, 2006, shall have the same meaning, as, assigned to them in the PNGRB Act, 2006. Page 1 of &Grant of Marketing Rights to Eligible Entities for CNG : The following categories of entities are eligible and granted marketing rights for CNG, including setting up CNG stations in any part of the country ‘a. Entities who are qualified as per the criteria as set out in the Resolution dated 08.03.2002, for getting marketing rights for MS, HSD and ATF. For the purpose of CNG, the threshold investment limit shall be Rs. 500 crore in place of Rs.2000 crore as specified in the said notification dated 08.03.2002; b. Entities authorised by the Petroleum and Natural Gas Regulatory Board (PNGRB), or by the Central Government, or deemed to have such authorisation under the PNGRB Act, 2006, for laying, building, operating ‘or expanding a City or local natural gas distribution network (CGD Network); ¢. Entities authorised by the PNGRB, or by the Central Government, or deemed to have such authorisation under the PNGRB Act, 2006, for laying, building, operating or expanding a common carrier or contract carrier. . Issuance of grant of Marketing Rights for CNG: a. The eligible entities under these guidelines shall apply to the Government for issuance of “Grant of Marketing Rights for CNG, as transportation fuel". b. Government may follow the extant procedure of Resolution No. P- 23016/1/2001-Mkt dated 8th March, 2002 for granting marketing rights for CNG, as transportation fuel to eligible entities under these guidelines. This may also include the provisions pertaining to imposing conditions in public interest as mentioned under clause XIII of Resolution no. P-23015/1/2001-Mkt dtd 08th March 202 subject to the availability of natural gas pipeline or CGD networks in the vicinity of remote areas and low service areas. Page 2 of 5c. The entities which have already been granted marketing rights for MS, HSD and ATF, as transportation fuel, under Resolution No. P- 23015/1/2001-Mkt dated 8th March, 2002 will deemed to have such grants of marketing rights for CNG, as transportation fuel. d. The eligible entities shall apply to Chief Controller of Explosive (CCoE) for purpose of obtaining clearances under the applicable statutory provisions. |. Procurement and allocation of Natural Gas for GNG (Transport) segment : a. Allocation/supply of domestic natural gas for CNG (transport) segment shall be as per extant MoP&NG guidelines, as in force from time to time. b. In addition, eligible entities would also be at liberty to arrange supplies of natural gas from market sources by themselves. . Access to Natural Gas Pipelines and/or City or local natural gas Distribution Networks (CGD Networks) : a. Eligible entities may book capacities in Natural Gas Pipeline(s) and/or in CGD Network(s) on common cartier or contract carrier basis, as may be required, for transportation of natural gas up to the premises of their respective CNG Stations; b. Matters pertaining to access to Natural Gas Pipeline(s) / CGD Network(s) on common carrier or contract carrier basis and the applicable transportation rate(s) for such usage on common carrier or contract carrier basis etc. shall be governed in terms of the provisions of the PNGRB Act, 2006, and the notified rules and regulations there-under. ¢. Eligible entities would also be liberty to make their own arrangement(s) through cascade(s) ete for transportation of natural gas up to the premises of their respective CNG Stations. . Establishment and Operation of CNG Station(s): a. Eligible entities would be entitled to set up and/or operate CNG Stations, either by themselves, or through their Joint Ventures/ Subsidiaries, or through dealerships, for sale and supply of CNG; Page 3 of 5Provided that such eligible entities shall establish their own facilities for sale and supply of CNG at new outlet(s)/location(s) during “transition period” without “encroaching’ upon the prevailing set-ups of existing CNG Stations. Explanation:- For the purposes of this clause, the expression “transition period" shall mean a period of three years from the date of notification of this addendum and "encroaching" includes taking over of retail outlet, of one entity by another. b. In order to promote optimal utilization of existing retail outlets dealing with liquid transportation fuels (2. MS, HSD) and in order to avoid infructuous efforts and investments, eligible entities are permitted to enter into their own arrangements with the existing owner(s) / dealer(s) of such existing retail outlets for establishing and operating CNG facilities; c. Eligible entities would be at liberty to set-up Greenfield CNG Stations based on their own techno-economic considerations. d. Furthermore, eligible entities have to appoint its dealers for setting up CNG Stations in an objective and transparent manner. Eligible Entities have to make public its policy for setting up CNG Stations. 7. Technical and Safety Standard(s) for CNG Station(s): In respect of technical standards and safety standards pertaining to CNG Stations, eligible entities shall comply with all statutory provisions of Act(s), Rule(s) and Regulation(s), in force, as applicable, and in this regard, such eligible entities shall obtain all requisite approvals from the concemed competent authorities for setting up and operating CNG Stations. . 8. Effective Date These guidelines shall be effective from the date of publication of provisions of this Resolution in the Official Gazette and will be deemed to be applicable Page 4 of 5to the existing entities who are already engaged in marketing and sale of CNG. 9. Miscellaneous a, MoP&NG reserves the right for issuing clarifications/amendments on various matters covered in these guidelines. and — such clarificationsfamendments will have the same effect as this Resolution itself; b. Keeping in view the fast track development of CNG sector along Highways and in public interest, the Central Government, on su-motu, may specify various CNG corridors in the vicinity of pipeline networks. Explanation- With the development of envisaged national gas grid, natural gas availability will be possible in all parts of the country and the "CNG Corridor” can be developed on the National Highway/ State Highway Which are in the vicinity of natural gas pipeline/networks. Therefore, with the development of natural gas grid and in public interest, the Central Government may specify various CNG corridors in the vicinity of pipeline networks where all eligible entities under this addendum may develop their CNG retail networks ©. In case of any doubt with regard to any of the provisions of these guidelines, the matter shall be referred to the Ministry of Petroleum and Natural Gas, Government of india, for interpretation. Page 5 of 5