Nobody wants PNGRB regulating LNG terminals
Maybe it's best if the PNGRB keeps its nose out of the LNG business.
That's the most likely message industry stakeholders will deliver in response to new draft regulations for establishing and operating LNG terminals to which the PNGRB has invited comments by July 4 (2024). In its public notice released on June 5 (2024), the PNGRB says it wants both upcoming LNG terminals and established LNG terminals registered with the board.
"According to the previous guidelines, any new LNG terminal must register with the board," says a source. "But no such regulation was there for existing terminals."
In addition to registration, the draft guidelines suggest that LNG terminal operators provide the board with a Final Investment Decision and financing details. "They believe that by regulating the sector, they are in a better position to decide if the investment will be wasted," adds our source.
"But who are they to decide if an investment is pointless?" Another source believes the PNGRB has no authority over LNG terminals. "They are overstepping their jurisdiction," he says.
"They are trying to make the LNG terminals common carrier (open to all for use for a fee)." He recalls a similar failed attempt in April 2018 to push through such regulations and another attempt approximately five years before.
"Both times, the PNGRB faced strong opposition over its move to make LNG terminals common carrier," he adds. Our source acknowledges that the current notice does not mention common carrier terminals, but he believes that's the PNGRB's hidden agenda.
In its present notice, the PNGRB wants LNG terminal operators to seek its approval before expanding capacity to "promote competition among entities; avoid infructuous (pointless) investment; maintain or increase supplies; protect customers' interests in terms of gas availability; and ensure gas pipeline infrastructure availability to evacuate R-LNG." An LNG terminal registration can be cancelled if the operator is involved in unfair trade practices or defaults on obligations, adds the PNGRB notice.