PNGRB moves to regulate existing & upcoming LNG terminals

New Delhi: The Petroleum and Natural Gas Regulatory Board (PNGRB) has floated a draft proposal to regulate existing and upcoming Liquefied Natural Gas (LNG) terminals as the ones already existing remain underutilised. According to the draft guidelines, any company wanting to establish or operate an LNG terminal will have to get an approval from the PNGRB before taking the Final Investment Decision (FID). The draft regulation, open to public consultation, refers to all operating and future terminals which will have to register with the regulator.

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How will approval for LNG terminals be granted?

The PNGRB’s nod to both new and upcoming units will depend on a number of criteria like, promoting competition among operators, avoiding infructuous investment, ensuring adequate gas supply, protection of consumer interest and availability of gas evacuation facility from the terminal, said the draft. The regulator can also suspend or terminate the registration of an LNG terminal, if it is found involved in unfair trade practice or breach of regulatory obligations.

PNGRB tries to ensure utilisation of LNG terminals

The proposed regulation also calls for companies to “have a credible business plan for utilisation of capacity” and “submit the business plan and detailed evacuation plan” when planning new units or terminals. PNGRB will approve the “completion schedule” of the LNG terminal and can impose a financial penalty on the operator for not sticking to the completion schedule.

India has seven LNG terminals with cumulative capacity of 45 MTPA. Most of these terminals are operated by Petronet LNG Ltd, a joint venture company of various oil and gas PSUs. An additional 20 MTPA of LNG terminal capacity are expected to be added in the coming years. However, even as companies plan the expansion of LNG terminals, the existing terminals have recorded a capacity utilisation of 30 percent or lower in 2023-24. Industry experts also expect moderate growth in India’s natural gas consumption as opposed to the government’s plan to increase the share of gas in India’s energy mix to 15 percent by 2030. In 2018, the Centre had announced its plan to increase the share of gas in the economy when the figure was at 5.8 percent. Six years later, it is still at 6 percent.

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