OREANDA-NEWS. June 17, 2011. Public sector gas utility GAIL and Indraprastha Gas Ltd, the sole supplier of gas as automotive and kitchen fuels in Delhi and its suburbs, have challenged the sectoral regulator's decision to award three pipelines worth Rs 12,500 crore to a Gujarat government firm.

GAIL and IGL have moved the Supreme Court against the Petroleum and Natural Gas Regulatory Board's decision to authorise GSPL, a subsidiary of Gujarat State Petroleum Corporation -- the country's only oil company promoted by a state government – to lay the pipelines. The court is expected to take up their petition on Wednesday.

Both companies have contended that the board awarded the pipelines in violation of the apex court's interim order in a case pertaining to the regulator's functioning. They have said PNGRB's decision was not taken by a multi-member board. The apex court had earlier ordered that PNGRB's decisions on applications from companies for laying of pipelines have to be taken by a multi-member board as envisaged in the relevant laws.

The spirit of the court's interim order, GAIL and IGL have contended, implies that no application is to be decided till the PNGRB is reconstituted after filling up of all vacancies.

The court had also barred B S Negi, one of the PNGRB members, from participating in deliberations on any application. The court had asked the government to appoint a temporary member in place of Negi.

Last month, PNGRB awarded the pipelines to GSPL, a subsidiary of Gujarat State Petroleum Corporation. The pipelines are Mallavaram-Bhilwara (1,611 km), Mehsana-Bhatinda (1,688 km) and Bhatinda-Jammu (512 km). GSPL had bid for the lines in partnership with Central public sector units IndianOil Corporation, Bharat Petroleum and Hindustan Petroleum.