Oil regulator PNGRB has proposed that new LNG import terminal in the country should reserve a fifth of the capacity for third-party access on common carrier principle. The Petroleum and Natural Gas Regulatory Board (PNGRB) issued draft regulations for setting up and operation of liquefied natural gas (LNG) terminals in the country. Comments on the regulations have been invited from stakeholders by month end. Energy companies wishing to set up LNG terminals in India will have to first apply for a registration to the Board in a scheduled format.
The firm will have to "offer at all times, after registration, 20 per cent of its short-term (less than 5 years contract) uncommitted re-gasification capacity or 0.5 million tons per annum (MMTPA), whichever is higher, as common carrier capacity," it said. This capacity can be booked by a third party to import their own LNG. Besides adhering to its technical standards and specifications of the Board, the company setting up the LNG terminal would have to "furnish a bank guarantee for an amount equal to 1 per cent of the estimated project cost of the LNG terminal or Rs 250 million whichever is less."
"An entity desirous of establishing or operating more than one LNG terminal shall make separate applications for each of such LNG terminals," it said. India currently has four operating LNG terminals - 15 million tons import facility of Petronet LNG Ltd at Dahej in Gujarat, Royal Dutch Shell's 5 million tons terminal at Hazira in Gujarat, state-owned GAIL India Ltd's Dabhol facility in Maharashtra and Petronet's 5 million tons Kochi terminal in Kerala.
Some other terminals like Adani-GSPC's Mundra facility in Gujarat are under construction while a few others have been proposed. The Board, the regulations said, shall issue a certification of registration valid for 25 years to an entity making an application for registration along with the bank guarantee and application fee. "At the end of the validity period of the certificate of registration, the Board may consider an extension of it for a block of 10 years at a time on such terms and conditions, as it may deem fit at that time," it said.
Any change in the ownership or management control of the LNG terminal will have to be informed to the Board along with copies of the supporting documents within 60 days of such a change. The PNGRB said it can suspend or terminate a registration in case of defaults in fulfilment of any of the eligibility conditions. "In case of termination of the certificate of registration issued to an entity, the bank guarantee furnished by such an entity shall be forfeited," it said. Once stakeholder comments are received, the PNGRB will finalise the regulations and "they shall come into force on the date of their publication in the Official Gazette."