Incoherent LNG order baffles PNGRB

Vol 16, PW 11 (13 Dec 12) Midstream & Downstream

India’s gas regulator is puzzled by the wording of an oil ministry directive calling for LNG terminals to reserve 20% capacity for ‘common carrier’ use.

Ratan P. Watal, secretary at the PNGRB, wrote to the oil ministry last month (November) for clarification on a murky notification issued on October 30 designed to outlaw the monopoly on LNG imports enjoyed by Petronet-LNG and Shell/Total.

In dispute is a single incoherent sentence: “Any establishing (sic) or operating LNG terminal after the date of establishment of the PNGRB shall be eligible to register to the Board.” Does this mean both established (existing) and future (proposed) LNG terminals or just new LNG terminals “The wording is confusing,” complains a PNGRB source.

“The notification doesn’t say anything about established LNG terminals undergoing capacity expansion.” Also bizarre is a ministry demand that LNG terminals registering with the Board must offer 20% or at least 0.5m t/y of “short-term uncommitted” re-gasification capacity for common carrier use.

All that’s clear is that “short-term” means less than five years. Unclear is why LNG terminal operators would admit to ‘uncommitted’ capacity or who would police it if they fail to comply “The PNGRB is only permitted to register operators,” says a sceptical source at a state-owned oil company.

“The Petroleum & Natural Gas Regulatory Board Act, 2006 does not cover regulating terminals.” Yet the ministry order draws praise from consumers like Lanco, KRIBHCO and others ready to import LNG themselves.

“It is a step in the right direction,” says Lanco. “If LNG terminals were open for common carrier use we would already have begun importing cargoes.