Section 18 in The Petroleum and Natural Gas Regulatory Board (Authorizing Entities to Lay, Build, Operate or Expand Petroleum and Petroleum Products Pipelines) Regulations, 2010
18. Entity not authorized by the Central Government for laying, building, operating or expanding petroleum and petroleum products pipeline before the appointed day.
(1)An entity laying, building, operating or expanding petroleum and petroleum products pipeline at any time before the appointed day but not duly authorized to do so by the Central Government shall apply immediately for obtaining an authorization in the form as per Schedule 1.(2)The Board may consider the following criteria while considering the application for grant of authorization, namely:-(a)the entity meets the minimum eligibility criteria as specified in clauses (a) to (e) and (i) of sub-regulation (6) of regulation 5 before the appointed date and is possessing all necessary statutory clearances, permissions, no objection certificates from the Central and State Governments and other statutory authorities;(b)an entity which is not registered under the Companies Act, 1956 at the time of submitting the application for grant of authorization shall undertake to become a company registered under the Companies Act 1956:Provided that the Board may exempt an entity to register under the Companies Act, 1956 on such conditions as it may deem appropriate;(c)a satisfactory assessment of the actual physical progress made and the financial commitment thereof till immediately before the appointed day in comparison with the entity's DFR appraised by the financial institution funding the project. In case the project has not been funded by any financial institution, the Board may appraise the DFR. The DFR of the entity should clearly indicate the specified length, route and capacity of the proposed petroleum and petroleum products pipeline;(d)in respect of the actual physical progress made and the, financial commitment thereof referred to in clause (e), a physical progress of at least twenty five percent and a financial commitment of at least twenty five percent of the capital expenditure identified for the petroleum and petroleum products pipeline project as per the DFR immediately before the appointed day may be considered as adequate;(e)the Board reserves the right to get the actual physical progress and the financial commitment certified and depending upon the progress achieved, the Board may consider authorizing the entity for laying, building, operating or expanding the petroleum and petroleum products pipeline-(i)as per the route and length as specified in its DFR;(ii)as per the route or length actually covered under implementation till the appointed day; or(iii)as per the route or length specified by the Board;(f)in relation to laying, building, operating or expanding the petroleum and petroleum products pipeline, it is for the entity to satisfy the Board on the adequacy of its ability to meet the applicable technical standards, specifications and safety standards as specified in the relevant regulations for technical standards and specifications including safety standards;(g)assessment of the financial position of the entity in timely and adequately meeting the financial commitments in developing the petroleum and petroleum products pipeline project as appraised by a financial institution and an examination of the audited books of accounts of the entity;(h)the booking of the capacity in the petroleum and petroleum products pipeline should be equal to at least fifty percent of the sum of the own capacity requirements of the entity and firmed-up contracted capacity and the agreements in this regard should have been entered in a transparent manner and based on the principle of at an arm's length;(i)the entity shall submit copies of the agreements for transportation or supplying of petroleum products by the petroleum and petroleum products pipeline for the firmed-up contracted capacity specified under clause (h) to the Board; and(j)any other criteria considered as relevant by the Board based on the examination of the application.(3)The evaluation of the application in terms of the clauses (a) to (i) of sub-regulation (2) shall be done in totality, considering the composite nature and the inter-linkages of the criteria.(4)The Board, after examining the application in terms of the criteria under sub-regulation (3) and also taking into account the requirements in other regulations may form a prima-facie view as to whether the case should be considered for authorization.(5)In case of prima-facie consideration, the Board shall issue a public notice in one national and one vernacular daily newspaper (including web hosting) giving brief details of the project and seek comments and objections, if any, within thirty days from any person on the proposal.(6)The Board, after examining the comments and objections, if any, under sub-regulation (5) may either consider or reject the case for grant of authorization for the petroleum and petroleum products pipeline.(7)In case it is decided to grant authorization, the same shall be in the form at Schedule D;(8)In case of rejection of the application, the Board shall pass a speaking order after giving a reasonable opportunity to the concerned party to explain its case and proceed to select an appropriate entity tor the project in terms of regulation 6.(9)In case the entity is selected tor grant of authorization for laying, building, operating or expanding petroleum and petroleum products pipeline,-(a)the petroleum and petroleum products pipeline tariff shall be determined under the relevant regulations on determination of petroleum and petroleum products pipeline tariff;(b)the entity shall abide by the technical standards specification's including safety standards as specified under relevant regulations for technical standards and speCifications including safety standards;(c)the Board shall monitor the actual progress made by the entity in the activities of laying, building or expanding the petroleum and petroleum products pipeline on a quarterly basis, with reference to the period of commissioning, the targets specified in the DFR of the project and the terms and conditions of the authorization with a view to avoiding any time or cost over-runs which may adversely affect the petroleum and petroleum products pipeline tariff:Provided that in case of any delay in the commissioning of the petroleum and petroleum products pipeline or meeting any target beyond that specified in the authorization, the Board reserves the right to not consider the additional costs attributable to the time over-run while fixing the petroleum and petroleum products pipeline tariff as specified under sub-regulation (a);(d)the entity shall abide by the provisions under the relevant regulations on access code and declaring petroleum and petroleum products pipelines as common carrier or contract carrier;(e)the provisions under regulations 8, 9, 13, 14, 15 and 16 shall apply to the entity.
