New Delhi
A draft proposal has been released by India’s Petroleum and Natural Gas Regulatory Board (PNGRB) to enhance regulatory control over the country’s liquefied natural gas (LNG) terminals. The proposal aims to address capacity underutilization and increase transparency in the sector.
Most LNG terminals, except Dahej, operate at less than 50 per cent capacity. The proposal seeks to optimize existing infrastructure use and ensure efficient operations. Measures to allow new suppliers to access terminals and increase competition are included.
The proposal outlines requirements for new LNG terminal projects. Entities must notify PNGRB before making final investment decisions. New projects will need a registration certificate, and developers must disclose tariffs publicly. The regulator’s approval will depend on promoting competition, avoiding unnecessary investments, ensuring adequate national gas supply, protecting consumer interests, and providing necessary pipeline infrastructure.
PNGRB will have the authority to impose fines for project delays. Companies must have credible plans for capacity utilization and provide a bank guarantee equal to one per cent of the project cost or INR 250 million, whichever is less.
Despite regulatory changes, India’s reliance on LNG imports is expected to remain strong. LNG imports surged by 44 per cent in the first quarter of 2024, driven by a significant decline in spot prices and strong demand across downstream sectors.
