Vocal opposition to PNGRB plan for LNG roll-out

Vol 24, PW 19 (12 Aug 21) Midstream, Downstream, Renewables

There's a distinct fault line emerging between gas retailers and LNG importers over the PNGRB's proposal to let anyone set up LNG fuelling stations in already-awarded CGD areas.

More than 100 companies attended a PNGRB open house on July 29 (2021) to discuss the controversial LNG station proposal after it was first proposed by former chairman DK Sarraf and member commercial Satpal Garg on June 2 (2020). Unlike some of the others present, gas retailer IOAGPL took a firm stance.

"We do not support slicing up the gas business," said IOAGPL. "Even if delivered through cylinders to customers, and not through a pipeline, LNG is part of the CGD business according to the PNGRB Act."

He added all gas supplies in already-awarded areas should be through CGD companies. IOAGPL stressed LNG is natural gas and the PNGRB’s proposal is not in the "best interests" of investors or the CGD business.

After awarding CGD areas, IOAGPL argued that the PNGRB could not change the rules "whether they are right or wrong" after awarding CGD areas. Indraprastha Gas (IGL) and other CGD companies, who spoke after, supported IOAGPL and expressed their views in comments submitted through the Association of CGD Entities (ACE) industry lobby group.

Ironically, IOAGPL promoter and LNG importer IOC took the opposite position. "LNG is not part of the CGD business," IOC told the meeting.

Fellow LNG importer Adani-Total’s written comments also supported the PNGRB proposal saying gas supplies through means other than a CGD network is outside the scope of the PNGRB. More ironic was LNG importer GAIL supporting the PNGRB proposal while its gas retail subsidiary GAIL Gas vehemently opposed the plan.

Predictably, AG&P opposed the plan and said the CGD business is capital intensive and fraught with "huge" commercial risks and that the full PNGRB should be in place to consider proposals of this magnitude before they become law.