Piped gas suppliers may gain from norms on force majeure
City Gas Distribution (CGD) entities implementing projects to supply piped natural gas to households as well as CNG for automobiles and industries are likely to save on penalties for work delays triggered by the pandemic, with the Petroleum and Natural Gas Regulatory Board (PNGRB) issuing guidelines on force majeure considerations.
“To examine the requests of CGD entities for time extension… the board has approved the guidelines for consideration of Force Majeure in CGD networks,” PNGRB said. Sources working on different CGD projects said several entities had approached the regulator in the wake of the COVID-19 lockdown. An official said little work was possible at the height of the lockdown, till the third week of April. Some relaxation in construction activity that followed was not of much use as, by then, many migrant labourers had returned to their native places.
With many factories closed, access to material was also a challenge. Most CGD entities, especially those awarded projects in the 9th and 10th round of bidding by the PNGRB, were likely to benefit from the guidelines. Indian Oil Corporation Executive Director (Southern Region Pipelines) D.S. Nanaware said a minimum work programme had been agreed to by the CGD entities and non-compliance would attract penalties.
As per the force majeure norms, “in the event of authorised entity rendered unable to perform any obligation… the relative obligation of the entity affected by such force majeure shall be suspended for the period during which such force majeure lasts.” Consumers may face a delay to the extent of the period for which force majeure is invoked.
