~')~ClI1 Qt 'IIltfclCfi ~ ~Q:qII1Cfi ~Petroleum and Natural Gas Regulatory Board

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1st Floor, World Trade Centre, Babar Road, New Delhi - 110001

Yours faithfully,

No. InfralCGDIBIDIR-3/5/GA/Jamnagar

ToShri PPG Sarma,CEO, GSPC Gas Company Limited.GSPC Bhavan, Bid,Udyog Bhavan,Sector-I I, Ghandhinagar- 382 0 IO.Fax: 079·23220899

Ith January. 2014

Sub: Grant of Authorization for Geographical Area of Jamnagar eGOnetwork (Bid No. PNGRB/CGOlBidlR-3/5/GA-JAMNAGAR)

Sir,With reference to Bid No. PNGRB/CGD/BidIR-3/S/GA-JAMNAGAR and

the Performance Bond submitted by you vide letter No. GSPCGasIPNGRB/2013·14/28 dated I~I January. 2014. please find enclosed theGrant of Authorization in Schedule-D of the Petroleum and Natural GasRegulatory Board (Authorizing Entities to Lay. Build, Operate or Expand Cityor Local Natural Gas Distribution Networks) Regulations, 2008 for theGeographical Area of Jamnagar CG D network.

2. It may be noted that the authorization shall be governed by the provisionsof the relevant Regulations, various terms & conditions contained in the'Application cum Bid document' and the clarifications issued by PNGRB w.r.t.Bid No. PNGRB/CGD/BidfR-3/5/GA-JAMNAGAR.

3. Kindly acknowledge this letter and send us the acceptance within 14 daysfrom the date of this letter.

End: As Above

.'~ " 2 ....:.1 I

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Schedule 0

[see regulations 10 (I) and 18 (-)]

Grant of authorization for laying, building, operating or expandingJamnagar eGO network

ToShri PPG Sarma,Chief Executive Officer,GSPC Gas Company Limited,GSPC Bhavan, Bid,Udyog Bhavan,Sector-ll, Ghandhinagar-382 010.

Subject: Grant of authorization for laying, building, operating or expandingCGD network in the authorized area of JAMNAGAR under the Stateof G uj a rat under the Petroleum and Natural Gas Regulatory Board(Authorizing Entities to Lay, Build, Operate or Expand City or LocalNatural Gas Distribution Networks) Regulations, 2008

Sir,

With reference to your application-cum-bid for grant of authorizationfor laying, building, operating or expanding the CGD network in JAMNAGARin the State of Gujarat, it has been decided to grant you the authorization subjectto the Petroleum and Natural Gas Regulatory Board (Authorizing Entities to Lay,Build, Operate or Expand City or Local Natural Gas Distribution Networks)Regulations, 2008 and the following terms and conditions:

1. The Authorized Area for laying, bui lding, operating or expanding theproposed CGD Network shall cover an area of 10,630 square kilometersand as depicted in the enclosed drawing.

2. The activities of laying, building, operating or expansion of the CGDNetwork to commence within a period of 180 days from the date of thisauthorization.

3. The activities permitted above shall have to be completed as per theapproved ti~e"'~~H1cfu'1.'. ~ 'rased at~~nnexure-1. Any failure on the part

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of the entity in complying \\ ith the milestones prescribed in the timeschedule shall lead to consequences as speci tied under regulation 16 of thePetroleum and Natural Gas Regulatory Board (Authorizing Entities to Lay,Build, Operate or Expand City or Local Natural Gas DistributionNetworks) Regulations, 2008.

4. The entity shall design and install an optimal size of the infrastructure interms of pipelines of variou types including steel belting of theauthorized area, online compressors of adequate capacity for compressingof natural gas into C~G, allied equipments and facilities in the eGOnetwork as identified in its OFR depending upon the potential demand fornatural gas. The infrastructure in the CGD network should be adequate tomaintain uninterrupted flow of natural gas in the pipelines and be also ableto maintain supplies at adequate pressure to online CNG stations.

5. The entity shall maintain an uninterrupted supply of natural gas to allcategories of customers in the eGO network. In the event of any disruptionin the supply of natural gas in the CGO Network, first priority shall beaccorded to restoration of supplies to domestic PNG customers. In caseof disruption of supply to domestic PNG customers for more than twelvehours, the entity shall compensate to the domestic customer on thefollowing basis:-

(a) the normative volume of natural gas consumption for the firstdomestic PNG connection for cooking requirements based on last threemonths weighted average consumption per day to be applied for each day'sdisruption and multiplied by ten;

(b) normative value of natural gas consumption shall be based on lastthree months' weighted average billing price of natural gas for suppliesto the first domestic PNG connection for cooking requirements; and

(c) the value of compensation shall be equal to normative volume ofnatural gas consumption as per clause (a) multiplied by normative value asper clause (b) and shall be adjusted by allowing a credit to the domesticPNG Customer in the next bill ing cycle or in the next pre-paid smartcard in case of smart card metering.'-

In case the disruption of supplies i attributed to any fault of the domesticPNG customer, no cdth~n ation shall be payable by the entity.

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( 11 ,\00 month, 11'\1;\1 lk· d;J1( (\1 i Il\' (Ii' rlu. couunumc auon lot I~I\ inu.

hl.ldding and l·\.j")(.ln"jul1 o tthc C(il) nctw ork : .lrH,1

(h) AO months from the date oj i:--:-ll\.' ()( thi:-- cornmuuic.uion III terms (II

l'\.l'll1pllOn Irom the pun il'\\ nf common C;llTil.'1 or contract carrier for theCCJ D !let\\ ork .

Provided that the emir, meets the obl igatiol1s in line with the Petroleumand Natural Gas Regulatory Board (Exclusi. it)' for Cit) or Local NaturalGas Distribution Networks) Regulations. 2008:

Provided CU11herthat the period or exclusivity allowed under sub-clause (a)or sub-clause (b) may be terminated before the expiry of the periodmentioned above in line with the provisions under Petroleum and NaturalGas Regulatory Board (Exclusivity for City or Local Natural GasDistribution Networks) Regulations. 2008.

7. The authorized entity shall be required to take prior approval from theBoard for creation of any lien, charge or hypothecation of the eGOnetwork to secure finances for the project and furnish details of utilizationof funds. However, in case of raising funds from any financial institutionor bank, the entity will be required to only .inform the Board of the sanctionof the funds within a. period of seven days.

8. The entity shall submit a detailed and clear financial closure report to theBoard within a period of one hundred and Eighty days from the date ofauthorization issued by the Board under regulation 10 of Petroleum andNatural Gas Regulatory Board (Authorizing Entities to Lay, Build, Operateor Expand City or Local Natural Gas Distribution Networks) Regulations,2008.

IO. The entity shall publish the applicable retail selling price of PNGfor all categories of customers and also for the purpose of invoicing in Rs.!MMBTU.

II.The entity shall publish and display the retail selling price of C~Gfor the purpose of invoicing to CNG customers in Rs.! Kg at all CNGdispensing stations.

I2.The furnishing of performance bond of Rs. 30 million is a guarantee fortimely commissioning of the project as per the prescribed targets in the bidand for meeting the service obligations during the operating phase of theproject.

13.The entity shall abide by-

(a) the service obligations as specified under regulation 14 of thePetroleum and Natural Gas Regulatory Board (Authorizing Entities to Lay,Build, Operate or Expand City or Local Natural Gas DistributionNetworks) Regulations, 2008;

(b) the service obligations specified under the Petroleum and NaturalGas Regulatory Board (Exclusivity for City or Local Natural GasDistribution Networks) Regulations, 2008;

(c) the service obligations specified in Schedule-l to the Petroleum andNatural Gas Regulatory Board (Authorizing Entities to Lay, Build,Operate or Expand City or Local Natural Gas Distribution Networks)Regulations, 2008;

(d) the quality of service standards as specified under regulation 15of Petroleum and Natural Gas Regulatory Board (Authorizing Entities toLay, Build, Operate or Expand City or Local Natural Gas DistributionNetworks) Regulations, 2008.

14. In case the authorization of the entity is terminated, the Board may assignthe rights and obligations of the entity to any agency or another entityon such terms and conditions, as it may deem fit. Further, the entity maybe required, as per the directions of the Board, to continue the operationsof the CGD network at the same level till another agency or entity

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appointed by the Board takes over the full control of the C~~~~~~'~E~,:~~"""G:!.-- f\. L '.r~ J~,,",,~""""\ ~~,·,\JiGasa.(,~ ..• \."_t.o,.{'/,IJ:~--:...~\I~' I \.tVV\) -3 1\5' \l" C-:X,~';R\, •., '~'N:~\l!a~ t~"~\~~

- C' ) LZ \1\\'?\t!o\el.ll1''Y.~:\'\ C'.C\"-oM i1"clC Coe:;~"\.",;;'; ..-. ".;,' PPG ~iaJ'i1'd I. ~\OO!.'oN \ ~cC''\\·\\ "",J -'" .:,.,./ '-:--\'.'f E'tt'cut!ve Oftlc-,r' \st \'" :'-s <1':<<... •• \,OOl'-'- -; _OJ,.. I U\il.'{ X\' . ~eV'i (\~.n'

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IS.The entity shall comply with the applicable provisions under the Petroleumand atural Gas Regulatory Board (Authorizing Entities to Lay, Build,Operate or Expand City or Local , atural Gas Distribution Networks)Regulations, 2008, Petroleum and atural Gas Regulatory Board(Determination of Network Tariff for City or Local Natural GasDistribution Networks and Compression Charge for CNG) Regulations,2008, Petroleum and Natural Gas Regulatory Board (Exclusivity for Cityor Local Natural Gas Distribution Networks) Regulations, 2008, relevantregulations for technical standards and specifications, including safetystandards, any other regulations as may be applicable and the provisions ofthe Act.

16.The entity shall comply with any other term or condition which may benotified by the Board in public interest from time to time.

You are requested to confirm your acceptance by filling-in theacceptance of the grant of authorization provided below and return thesame in original.

Encl: As above

Yours faithfully,

!If;('~~c\4J~ rO\~aj~s{varaRao)

Officer on Special-Duty (R) 0

Dated:lth January, 2014151 F.oc'. v,

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~~;:>PG Sa: P1d

:r.!ef E:n!C :UV2 Otf'C...-1GSPC GAS ~OrvlP.A.NY I [MTTEO

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Acceptance of the Grant of Authorization

IjWe hereby accept the grant of authorization issued by the PNGRB videletter ref. Infra/CGD/BID/R-3/5/GA/Jamnagar dated 17th January,2014 and agree to comply with all the terms and conditions subject to whichIjWe have been granted the authorization for laying, building, operating orexpanding city or local natural gas distribution in the authorized aree ofJamnagar in the state of Gujarat.

Date: 28th January, 2014

Place: Gandhinagar

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Signature of the Entity or Authorized Signatory

Name and Official Seal

ANNEXURE-l

Milestones for the Project Implementation for Geographical Area ofJamnagar as per BID

Year Number of Domestic Inch-Kilometer ofCustomers Steel Pipelines

Year 1 92,000 1049.04 I

I I

Year 1 91,000 T 3690.24 I

Year 3 91,000 3496.80,

Year 4 92,000 3184.32I

Year 5 0 1435.92I

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1st Floor, v\':orid T, ",(In C€;,.t'cfDR r~,"~ f;; "",\ ., .ceo:

Baba Road, Now Del'u·" 000'

Chief Executive OfficerGSPC GAC, (()t-"PAN ,!t"tfl:

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