Strong opposition to LNG stations in CGD areas

Vol 24, PW 18 (29 Jul 21) People & Policy
       

For the Indian government, LNG is in the spotlight at the expense of CNG, and CGD companies are protesting.

Almost all CGD companies, including the Association of CGD Entities (ACE), sent in detailed objections by the PNGRB's July 21 deadline for a response to its June 30 proposal allowing competitors to set up LNG-only fuel stations in areas awarded under earlier bidding rounds. "This is a backdoor entry into lucrative areas by companies who did not bid for these areas," says a CGD source.

On July 26, Justice (Ms) Rekha Palli at the Delhi High Court, ruling on Gujarat Gas's legal challenge to the PNGRB proposal said the regulator could go ahead with its July 29 'open house' consultation but that any decision would have to await the full PNGRB quorum. Presently the PNGRB has just one member, Satpal Garg, who retires on August 14 (2021).

"Such proposals should be first discussed in detail by the full Board," said the CEO of a CGD company. Other industry sources complain the PNGRB licence for CGD areas covers natural gas supply, "and this includes LNG."

Some stress there is no market for LNG fuel to justify the entry of competitors into already awarded areas. Many fear new entrants will set up independent LNG stations but soon realise there's no market and will lobby the ministry or PNGRB for the right to sell CNG under the pretext of recovering their investment.

"Ultimately, the losers will be established CGD players who face unfair competition from new entrants who entered without bidding," says a source. He adds CGD players won areas during a competitive bidding process and committed extensive, and expensive, work programmes.

"Banks (that lent money) are already feeling jittery that electric vehicles will hit CNG sales," we hear. "They are asking us to go slow until a clearer picture emerges, if LNG stations are set up in our areas by outsiders, banks might stop lending to CGD companies."

If the PNGRB goes ahead with this "ill-conceived proposal", adds a source, "nobody will invest in the (upcoming) CGD-XI round." For a full breakdown of LNG cargo arrivals to India, with landing prices and volumes, subscribe to the LNG Dipla database from Petrowatch.com