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NOTIFICATION

THE PETROLEUM AND NATURAL GAS REGULATORY BOARD

New Delhi, the 16thMay 2013

F.No.INFRA/IMP/CGD/1/2013 - In exercise of the powers conferred bysection 61 of the Petroleum and Natural Gas Regulatory Act, !!6 "1# of

!!6$, the Petroleum and Natural Gas Regulatory %oard hereby ma&es the

following regulations to e'aluate ris&s, impro'e the safety of city gas

distribution networ& and bring more e(ecti'eness in operations to minimi)e

the probability of *G+ networ& failure, namely-

1. Short title and commencement.

"1$.hese regulations may be called the Petroleum and Natural GasRegulatory %oard "Integrity /anagement 0ystem for *ity or ocalNatural Gas +istribution Networ&s$ Regulations, !123

"$.hey shall come into force on the date of their publication in the45cial Ga)ette3

2. Defnitions.

"1$In these regulations, unless the context otherwise reuires,-

"a$ 7Act8 means the Petroleum and Natural Gas Regulatory %oardAct, !!69

"b$ 7city or local natural gas distribution networ&8 "hereinafterreferred to as *G+ networ&$ means pipeline networ& as de:ned in theAct9"c$ 7city gate station "*G0$8 means the station as de:ned inPetroleum and Natural Gas Regulatory %oard ".echnical 0tandards and0peci:cations including 0afety 0tandards for *ity or ocal Natural Gas+istribution Networ&s$ Regulations, !!;9

"d$ 7ris&8 means the ris& as de:ned under the Petroleum andNatural Gas Regulatory %oard "*odes of Practices for

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ii$ impro'ing the safety of city gas distribution networ&s so as to protect

the personnel , property, public and en'ironment9

iii$ bringing more streamlined and e(ecti'e operations to minimi)e the

probability of *G+ networ& failure3

6. nte!rity "ana!ement System.

.he de'elopment and implementation of integrity management system forthe city gas distribution networ&s shall be as described in 0chedule 1 to0chedule 1! of these regulations3

and 0chedule ; in con?unction toAppendix II3

"$In case of any de'iation or shortfall in achie'ing theimplementation of integrity management system as speci:ed inthese regulations, the entities shall be liable to face the followingconseuences, namely-

"i$ the entity is reuired to complete each acti'ity within the

speci:ed time limit and if there is any de:ciency in achie'ing inone or more of the acti'ities, the entity shall submit amitigation plan within the time limit for acceptance of the%oard and ma&e good all short comings within the time agreedby the %oard and if the entity fails to complete acti'ities withinthe speci:ed time limit by the %oard, rele'ant penal pro'isionsof the Act shall apply9

"ii$ in case the entity fails to implement the integrity managementsystem, the %oard may issue a notice to such defaulting entityallowing it a reasonable time to implement the pro'isions of

integrity management system and if the entity fails to complywithin the speci:ed time, the rele'ant pro'isions of the Act andregulations shall apply3

'. (e&%irement %nder other stat%tes.

It shall be necessary to comply with all statutory rules, regulations and Actsin force as applicable and reuisite appro'als shall be obtained from the

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rele'ant competent authorities for the *G+ networ&s3

). "iscellaneo%s.

"1$ In the e'ent of any problem faced by an entity in implementingthe pro'isions contained in these regulations, the entity mayapproach %oard for necessary dispensation3

"$ .he %oard may issue guidelines from time to time relating toIntegrity /anagement 0ystem for *ity or ocal Natural Gasdistribution Networ&s3

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S*+,D-.,S/see re!%lation 60

S*+,D-, 1Objective

.he ob?ecti'e of Integrity /anagement 0ystem "I/0$ is to ensure theintegrity of *G+ networ&s at all times to ensure public protection of

en'ironment, maximum a'ailability of *G+ networ&s and also minimi)ingbusiness ris&s associated with operations of gas networ&3 .he a'ailabi li tyof the Integrity /anagement 0ystem will allow professionals andtechnicians in integrity tas&s to ensure wor& plans and targets in the short,medium and long term hori)on which in turn will impro'e their e5ciencyand satisfaction to attain them3

.he I/0 will enable the *G+ operator to select an identi:ed system forimplementation such that the I/0 will be uniform for all *G+ entities withinthe country3

An e(ecti'e Integrity /anagement 0ystem shall be -

"a$ensuring the uality of *G+ networ& integrity in all areas which ha'epotential for ad'erse conseuences9

"b$ promoting a more rigorous and systematic management of *G+networ& integrity and mitigate the ris&9

"c$ Increasing the general con:dence of the public in operation of *G+networ&9

"d$optimi)ing the life of the *G+ networ& with the inbuilt incidentimplementation of Integrity /anagement Plan "I/P$ in'estigation anddata collection including re'iew by the entity3

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0*@

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Description o$ *D System

3.1 hysical description.

+escription of *G+ Networ& should include speci:c description of

the primary networ&s, secondary and tertiary networ&s with

respect to design speci:cations, length, ma?or installations details

such as

3.1.1 S%b ransmission ipeline /S03.1.2*ity as Station /*S03.1.3Odoriation System3.1.4Steel pipeline net7or8s3.1.5Secondary , net7or8s3.1.6 ertiary net7or8s9 ,9 and: or copper3.1.#District (e!%latin! Station /D(S03.1.' solation ;alves /Steel9 ,0

3.1.) *

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S*+,D-, 4Selection o$ appropriate nte!rity "ana!ement System

E31 In tegrity /anagement 0ys tem for *G+ Networ&s couldemploy either a Performance based I/0 or a Prescripti'etype Integrity /anagement 0ystem3 =hereas, *G+ industry

has gathered a reasonable good experience of *G+operat ions and such *G+ indust ry i s fair ly mature , aPerformance based Integrity /anagement 0ystem areappreciated globally3 @owe'er, where *G+ networ&s are inde'eloping stage, a Prescripti'e type Integrity /anagement0ystem is recommended3 =hereas, the Performance basedIntegrity /anagement 0ystem recogni)es the experience ofthe entity which has been operating the *G+ networ& butthe Prescripti'e type Integrity /anagement 0ystem is morer igorous as i t considers the worst case scenario of thefai lures in the *G+ networ&s and therefore worst case

scenario for mitigation3E 3 .hough subseuent schedule in these regulations apply to

both prescripti'e and performance based type of Integrity/anagement 0ystem, present regulations mainly focus onprescript i'e aspects in absence of adeuate historicalIntegrity /anagement 0ystem data3

E32 A prescripti'e type of Integrity /anagement 0ystemmandates the implementation of an established process foraddress ing the r is&s , the ir conseuences and pro'enmethods for mit igat ion3 I t a lso mandates the in-house

de'elopment of Integrity /anagement Plan, /anagement of*hange pertaining to technical aspects 3 %ased on thede'elopment of *G+ industry in India till date, thepreparation of Prescript i'e type Integri ty /anagement0ystem has been considered for implementation to all *G+networ&s in India3 Curther, as the *G+ industry matures andgathers su5 cient records or data as per the reuirementsprescribed in Petroleum and Natural Gas Regulatory %oard".echnical 0tandards and 0peci:cat ions including 0afety0tandards for *ity or oca l Natura l Gas +is tributionNetwor&s$ Regulations, !!;, a re'iew mechanism may be

considered by the %oard for recommending a Performance%ased Integrity /anagement 0ystem for *G+ Networ&s3

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S*+,D-, 5

nte!rity Assessment ools

0ome of the tools for Integrity assessment are pro'ided below3 .he operatorshould use as many support systems necessary to achie'e the Integri ty/anagement Plan for *G+ networ&s3 It may be noted that the baselinedata for speci:c measurement should be a'ailable with the operator as aready-rec&oner

/a0 Direct assessment and eval%ation

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Desi!nin! applicable nte!rity "ana!ement System $or the*D

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No

Fes

No

Fes

@i!%re=1 *D

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.he types of data to support a ris& assessment will 'ary depending on thethreat being assessed3 *G+ Networ& and facility &nowledge is an essentialcomponent of data collection3

+ata may be of any form mentioned in the abo'e section or customi)ed asper the speci:c reuirements3 .he data shall be in a form which would aid ine(ecti'e ris& assessment3 It may be noted that the implementation of theintegrity management programme would in itself dri'e the collection and

prioriti)ation of additional data3 .he 'olume and types of data will expand asthe plan is implemented o'er years of operation3

.he data collected shall as far as possible be rele'ant in applicability to theidenti:ed threats3

.he una'ailability of identi:ed data elements is not a ?usti:cation forexclusion of a threat from the integrity management programme3+epending on importance of the data, sound engineering ?udgment basedon a'ailable information, if possible in con?unction with industry-wide dataand best practices may be used for ris& assessment3

Cour aspects should be 'isuali)ed during data collection

1$ +ata alignmentIntegration of disparate data sources to a common location3 .hishelps in pinpointing ris&s to be attended3

$ +ata historyAbility to manage the temporal aspects of any data

2$ +ata Normali)ationIntegration of disparate data sources that analy)e same attributesfrom di(erent aspects

E$ +ata accuracy and con:denceImportant piece of decisi'e data reuired to support decisionma&ing

6.1.2 dentifcation o$ hreats Gas pipeline incident dataanaly)ed and classi:ed by Pipeline Research *ouncil International"PR*I$ represents root causes for threat to pipeline integrity34ne of the causes reported by the operator is 7un&nown83 .heremaining 1 threats ha'e been grouped into three groups basedon time dependency and further in to nine categories of relatedfailure types according to their nature and growth characteristicas below

%I ime Dependent hreats

1) External Corrosion

2) Internal Corrosion

3) Stress Corrosion Cracking

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(II) Stable hreats

4) Manufacturing related defects

i3 +efecti'e pipe seam

ii3 +efecti'e pipe

5) Welding fa!rication related

i3 +efecti'e pipe girth weldii3 +efecti'e fabrication weld

iii3 =rin&le bend or buc&le

i'3 0tripped threads Dbro&en pipe Dcoupling failure

6) E"ui#$ent

i3 Gas&et 4-ring failure

ii3 *ontrolDrelief euipment malfunction

iii3 0eal pump pac&ing failure

i'3 /iscellaneous

(III) ime independent hreats

%) &'ird #art( $ec'anical da$age

i3 +amage inBicted by :rst, second or third party "instantaneousDimmediate failure$

ii3 Pre'iously damaged pipe "delayed failure mode$

iii3 andalism

i'3 Rat bites'3

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- *athodic Protection system sur'ey and monitoring reports- Incident in'estigation and records of analysis for :nding root

causes- Accidental or opportunity based exca'ation and inspection- *G+ Networ& damage and defects reports- Repair or maintenance acti'ities- Regular and past operational data- Register of ris&s identi:ed during design "including route sur'ey

records$, construction, operations and maintenance D sur'eillance Dpatrolling

- *onstruction and maintenance records "including maintenancebac&log$, history, method of construction, test and inspection dataetc3

- *ompany internal speci:cations under 'arious heads- *G+ Networ& data from records li&e Piping and Instrumentation

+iagram, pipe-boo&, design and manufacturer documents, as-builtdocuments and drawings etc3 and by use of Geographic Information0ystem

- 0ystem modi:cation records and history- *onsultations with 4riginal

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the threats3 .he *G+ entity should tailor the method to meet the needs ofthe system3Ris& assessment helps organi)e data and information to help *G+ entitiesprioriti)e and plan acti'ities3

In carrying out ris& assessment, the probability of occurrence andconseuence shall be determined for e'ery threat, and the indi'idual ris&ratings shall be added to yield :nal ris& rating under consideration3

/isk rating 0 ro!a!ilit( rating Conse"uence rating

robability ratin! H Probability rating may be determined byassigning appropriate scalable 'alues for the probability ofoccurrence, based on industry experience and companys pastexperience3Cor example, a probability rating of scale 1 to E, 1 to J or 1 to 6 maybe applied, and probabilities may be characteri)ed as wee&ly,monthly, half-yearly, yearly, etc3 .he rating shall be ascending forincreasing probability of occurrence3

*onse&%ence ratin! H *onseuence rating may be determinedsimilarly by assigning appropriate scalable 'alues to conseuence of athreat materiali)ing, and these may be indi'idually characteri)edunder impact on people, en'ironment, :nancial and business loss'alue and legal conseuences3 A *G+ entity may consider as manyfactors as applicable from amongst these or de:ne additional factorsas reuired3

Cor example, a conseuence rating of scale 1 to E, 1 to J or 1 to 6 may beapplied to each category "impact on people, en'ironment, :nancial andbusiness loss 'alue and legal conseuences$, and from amongst these, thehighest rating may be ta&en as the conseuence rating under consideration3As an example, impact on people may be characteri)ed as minor or ma?orin?ury, single fatality, multiple fatalities etc3 In the same way, business lossmay be characteri)ed in terms of increasing monetary impact3 .he ratingshall be ascending for increasing impact3

A ris& assessment model along the abo'e lines helps pro'ide in impro'edunderstanding of the nature and locations of ris&s along a *G+ networ& orwithin a facility3 %ut, ris& assessment methods alone should not becompletely relied upon to establish ris& estimates or to address or mitigate&nown ris&s3 Ris& assessment methods should be used in con?unction with&nowledgeable, experienced personnel "sub?ect matter experts and peoplefamiliar with the facilities$3

An integral part of the ris& assessment process is the incorporation ofadditional data elements or changes to facility data3 .he ris& ratings shall bere'iewed and necessary changes made after a pre-decided inter'al or whenchanges ta&e place or when additional data or information becomes

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a'ailable3 .o ensure regular updates, an e(ecti'e process shall beestablished for ma?or system changes and modi:cations which can impactris& rating of the system, and this shall incorporate the ris& assessmentprocess after the changes are made3

A company should carry out the following acti'ities as part of ris&assessment -

"a$*arry out *athodic Protection system and *P adeuacy sur'ey

for distribution pipelines and categori)e the anomalies detectedon the basis of ris& le'els9

"b$*arry out periodic analysis to determine the le'el of ris&s toassets "as an input to asset replacement acti'ity$9

"c$Ris& analysis and assessment for all reported asset-relatedincidents and :ndings "including incidental steel pipeline and/+P< exposures, or exca'ation$9

"d$Prepare, maintain and update a register of &nown ris&s toassets, including their ris& rating3

Prioriti)ation usually in'ol'es sorting ris& ratings in decreasing order3 Cor

initial e(orts and screening purposes, ris& results could be e'aluated simplyon a 7highHmedium-low8 basis or as a numerical 'alue3 =hen segmentsbeing compared ha'e similar ris& 'alues, the failure probability andconseuences shall be considered separately3 Cactors including linea'ailability "Bow stoppage options$ and system throughput reuirementscan also inBuence prioriti)ation3

6.1.5. nte!rity Assessment.

A plan shall be de'eloped to address the most signi:cant threatsDris&s asper pre'ious section and determine appropriate integrity assessment

methods to assess the integrity of the *G+ Networ&3 .he followingmethods can be used for Integrity Assessment -

"a$@ydro testing before commissioning at test pressure as per .E0standards9

"b$

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uality control plan for such assessment3 After establishing e(ecti'eness ofassessment, the inter'al of assessment may be further modi:ed sub?ect tothe reuirements under Petroleum and Natural Gas Regulatory %oard".echnical 0tandards and 0peci:cations including 0afety 0tandards for *ityor ocal Natural Gas +istribution Networ&s$ Regulations, !!; and otherrele'ant regulations3

6.1.6 (esponses and "iti!ation.

.his section co'ers the schedule of responses to the indications obtained byinspection, repair acti'ities that can be a(ected to remedy or eliminate anunsafe condition, pre'enti'e actions that can be ta&en to reduce oreliminate a threat to the integrity of a *G+ Networ&, and establishment ofthe future inspection inter'als3 0uch responses may be immediatelyimplemented, scheduled o'er a period of time or the system may be simplymonitored based on the inspection outcome3

0ome of the mitigation actions are listed below -"a$Actions for increasing the adeuacy le'els of *athodic

Protection, li&e increasing *athodic Protection current le'els,installation of additional capacity etc39

"b$Replacement D repair of assets based on analysis outcomes9"c$*onsultation with euipment suppliers for deciding course of

actions3

In short, the below approach may be followed for mitigation actions

.he plans for critical acti'ities shall be re'iewed periodically by thecompany to address the resources "means$ reuirement andnecessary changes in organi)ational and external factors a(ectingintegrity management3

6.2 er$ormance lan.

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periodic basis$ against pre-de:ned targets helps to assess thee(ecti'eness of asset performance3

A company can e'aluate a systems integrity management programmeperformance within their own system and also by comparison with othersystems on an industry-wide basis30uch performance e'aluation should consider both threat-speci:c andaggregate impro'ements3 .hreat-speci:c e'aluations may apply to a

particular area of concern, while o'erall measures apply to the entire*G+ networ& under the integrity management programme3

Performance indicator measures may measure either or all of the belowas applicable -

"a$ Process measures9"b$ 4perational measures9"c$ +irect integrity measures3

A performance indicator may be either leading or lagging indicator3agging measures are reacti'e in that they pro'ide an indication of past

integrity management programme performance3 eading measures areproacti'e in that they pro'ide an indication of how the plan may beexpected to perform3

.he company shall conduct periodic internal audits to 'alidate thee(ecti'eness of its integrity management programmes and ensure thatthey ha'e been conducted in accordance with the plan3

A list of items is pro'ided below in de'eloping a company integritymanagement and performance e'aluation programme -

1$ An integrity management policy and program for all applicableelements shall be in place9

$ =ritten integrity management plan procedures and tas&descriptions are up to date and readily a'ailable92$ Acti'ities areperformed in accordance with the plan9E$ Indi'iduals ha'e recei'edproper uali:cation and training for acti'ities which they are tounderta&e9

J$ .he integrity management program meets the reuirements of thisdocument9

6$ All action items or non-conformances are closed in a timelymanner9

>$ .he ris& criteria used ha'e been re'iewed and documented9;$ Pre'ention, mitigation, and repair criteria ha'e been established9#$ Periodic internal audits shall be used to pro'ide an e(ecti'e basis

for e'aluation of the integrity management program36.3 *omm%nication lan.

.he *G+ entity shall de'elop and implement a communications plan inorder to &eep appropriate company personnel, ?urisdictional authorities,and the public informed about their integrity management e(orts and the

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results of their integrity management acti'ities3 .he information may becommunicated as part of other reuired communications3

6.4 "ana!ement o$ *han!e lan.

Cormal management of change procedures shall be de'eloped in order toidentify and consider the impact of changes to *G+ networ& systems andtheir integrity3

A management of change process includes the following -"1$ Reason for change"$ Authority for appro'ing changes"2$ Analysis of implications"E$ Acuisition of reuired wor& permits"J$ +ocumentation"6$ *ommunication of change to a(ected parties">$ .ime limitations";$ 0ta( in'ol'ed"#$ Planning for each situation

"1!$ niue circumstances if any3

6.5 %ality *ontrol lan.

Reuirements of a uality control plan include documentation,implementation, and maintenance3 .he following acti'ities are usuallyreuired -

"1$ Identify the processes9"$ +etermine the seuence and interaction of these processes9"2$ Prepare standard operation procedures and guidelines for criticalprocesses "e3g3 operation, maintenance, pro?ects etc$9"E$ Pro'ide the resources and information necessary to support theoperation and monitoring of these processes9"J$ /onitor, measure, and analy)e these processes9"6$Implement actions necessary to achie'e planned results andcontinued impro'ement of these processes3

Internal audits of the *G+ networ& integrity management system shall be

performed on a regular basis3 .he purpose of the audits is to ensure

compliance with the policies and procedures as outlined in these

regulations3 Recommendations and correcti'e actions ta&en shall be

documented and incorporated into the *G+ networ& integrity managementsystem3

Internal audits are conducted by the audit group nominated by @ead of the

4perations .eam of the entity at least once in a year3 Internal audits aim to

ensure that the integrity management systems framewor& is being

followed3

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.he following essential items will be focused for any internal and external

audit of the entire integrity management system -

"a$ensure that the %aseline Plan is being updated and followed and

that the baseline inspections are carried out93

"b$'erify uali:cations of 4peration and /aintenance personnel and

contractors based on education uali:cation "Appendix III$, formal

training recei'ed through in-house or external program,

demonstrated practical s&ills, and experience records in therele'ant areas3 Cor guidance in this regard reference may be

made to A0/< % 21K3

"c$

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A *G+ networ&s Integrity /anagement 0ystem is a management plan in theform of a document that explains to operators employees, customers,regulatory authorities, etc3, how the operator and its assets are managed,by stating

"a$ who is responsible for each aspect of the asset and its

management9

"b$ what policies and processes are in place to achie'e

targets and goals related to ensuring integrity of the

assets9

"c$ how they are planned for implementation9

"d$ how Integrity /anagement 0ystem performance is

measured and9

"e$ how the whole system is regularly re'iewed and audited3

.he document shall be agreed at %oard le'el of the entity, constantly andsystematically re'iewed and updated, and all le'els of management comply

with its contents3 Necessary awareness shall also be created within andoutside the company regarding bene:ts to the society for up &eeping of the*G+ Networ& system for all times to come3

Preparation of the document shall be done in following three stages and sixsteps -#.1 "ana!ement Approval.

StepB1Prepared by In-house team or *onsultant

StepB2 *hec&ed by In-house team @ead or *onsultant head

StepB3 Pro'isionally appro'ed by @ead of 4peration team of theentity

StepB4 *onformity of Integrity /anagement 0ystem document withthe Regulation by .hird Party Inspection Agency ".PIA$ and dulyappro'ed by *

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*G+ networ& integrity management system is in line with the reuirementsof the 'arious regulations issued by the Petroleum and Natural GasRegulatory %oard from time to time and has been appro'ed by the *

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Sr.

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S*+,D-, )

(evie7 o$ he nte!rity "ana!ement System

).1 eriodicity o$ revie7 o$ nte!rity "ana!ement System.

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APPENDIX I

(e$erences

Reference documents of 0tandard 4peration and /aintenance proceduresrelated to *G+ networ&s Integrity may be de'eloped for use of 4perationand /aintenance personnel3 0ome of them are mentioned below forreference

1$ Petroleum and Natural Gas Regulatory %oard ".echnical 0tandards and

0peci:cations including 0afety 0tandards for *ity or ocal Natural Gas

+istribution Networ&s$ Regulations, !!;3

$ Petroleum and Natural Gas Regulatory %oard "*odes of practices for

$ API 11!E- =elding of pipelines and related facilities3

;$ A0/< %oiler and Pressure essel "%P$ code 0ection IL- =elding and

%ra)ing uali:cation3

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A,

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/see re!%lation 69 Sched%le 6.5 and Sched%le 1?0

"inim%m %alifcations and eCperience $or personnel involved invario%s *D activities

1. Desi!n Sta!e

"a$+egree in engineering "%

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i'3 /aintenance H