The Petroleum and Natural Gas Regulatory Board (PNGRB) has introduced new regulations requiring mandatory registration for companies planning to set up or expand liquefied natural gas (LNG) terminals in India. This marks a significant policy shift. This policy shift replaces the earlier framework, which required reserving a portion of terminal capacity for third-party access.
Streamlining Investments and Aligning with Energy Goals
This regulatory update aims to streamline infrastructure investment, enhance competition, and support India’s energy transition, particularly its goal of increasing the share of natural gas to 15% of the energy mix by 2030. By mandating registration before final investment decisions (FID), PNGRB seeks to minimize redundant investments and promote more equitable gas distribution across the country.
Clear Requirements for Project Approval
To gain approval, applicants must submit a Detailed Feasibility Report (DFR) along with credible business and LNG evacuation plans. Additionally, a bank guarantee of 1% of the project cost or ₹25 crore (whichever is lower) must be furnished. The original draft regulations had included a clause mandating 20% short-term capacity reservation for third-party access, but industry pushback led to its removal in the final version.
Regulatory Oversight and Penalties
PNGRB retains the authority to suspend or revoke registrations and forfeit bank guarantees in cases of non-compliance or unfair practices. The regulator will also monitor project timelines and can impose penalties for undue delays, ensuring accountability and timely execution.
Existing LNG Infrastructure in India
India currently operates seven LNG terminals, with major facilities run by Petronet LNG, Shell, GAIL, and Adani Total Gas across key coastal states. Projectstoday.com reports that the new registration mandate will bring greater transparency and structure to future LNG infrastructure development.
