Fri. Sep 24th, 2021

City gas distribution

Transporting future fuel

#64 Pipeline System Indiscipline & charges

5 min read

As we know that pipeline safety is very much important for the smooth functioning of all the network. For this, it is very important to follow the following points for the system integrity & proper functioning.

  1. If the pipeline capacity has been utilized by the shipper without permission of the transporter over 110% of the capacity allocated, then, the shipper shall be charged for such unauthorized overrun by the transporter in a transparent manner on non-discriminatory basis.
  2. If the shipper off-takes less quantity of gas from the pipeline system than injected into it, then, the shipper is creating positive imbalance and it  shall be allowed a cumulative positive imbalance of ten per cent of allocated capacity as tolerance limit.
  1. Positive imbalance up to ten per cent of the booked capacity shall not attract any positive imbalance charges and the shipper shall be charged by the transporter for positive imbalance charges in a transparent manner on non discriminatory basis if it exceeds ten per cent.  
  2. If shipper off-takes more quantity of gas from the pipeline system than injected into it, then, the shipper is creating negative imbalance and the shipper shall be allowed a cumulative negative imbalance of five per cent of allocated capacity as a tolerance limit.
  3. Negative imbalance of five per cent of the allocated capacity shall not attract any negative imbalance charges and the shipper shall be charged by the transporter for negative imbalance charges in a transparent manner on non discriminatory basis if it exceeds five percent.  
  1. Charges for the system indiscipline, that is, for unauthorized overrun positive imbalance and negative imbalance shall be on daily basis in terms of maximum daily quantity.  
  2. the transporter shall maintain the pipeline system in such a way that the allowed positive imbalance of 10% or negative imbalance of 5% does not  interfere with the operations of the pipeline and shall ensure that the shippers get their allocated quantities within acceptable contractual variations, at specified gas parameters at exit points. 
  3. It shall be the responsibility of the defaulting shipper to cure imbalances beyond the permissible limit caused by it in transporter’s pipeline and in case, the defaulting shipper is unable to cure such imbalances within a period of fifteen days, then, the transporter shall have the right to adjust daily-nominated quantity of such shipper to mitigate such imbalances to ensure safety and integrity of pipeline system.  
  1.   In case the transporter and the shipper have entered into an agreement which recognizes an aggregated volume of natural gas on periodic basis and the shipper makes commitment to avail the capacity intermittently within a period less than one year,  the imbalances and overrun charges shall be calculated on maximum daily quantity basis as scheduled by the shipper and the transporter.  
  2. There shall be established an escrow account to be maintained by the transporter which shall be credited with all charges received by the transporter on account of imbalances and overruns under the regulation and the transporter shall be eligible to withdraw from the escrow account the payment towards his contractual obligations with reference to supply or pay and extra efforts to compress gas in case of negative imbalance and system management of the pipeline system due to such imbalances created by the shippers.   
  3. The transporter shall submit audited statement of the escrow account on an annual basis to the Board.  
  1. The balance amount available in the escrow account, after the eligible withdrawal by the transporter, may be utilized in such a manner and for such purposes as may be specified by the Board.  
  2. A transporter shall provide, under the relevant regulations of the Board, Imbalance Management Services to the extent it is technically and operationally feasible.
  3. So, this is how the system integrity is maintained in the pipeline with reference to the amount of gas.

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