PNGRB Unveils Draft Framework To Regulate LNG Terminals

Companies planning to set up new liquefied natural gas (LNG) terminals or expand existing ones will need approval from the downstream regulator, according to a draft regulation by the Petroleum and Natural Gas Regulatory Board (PNGRB).

The regulation, titled "Registration for Establishing and Operating LNG Terminals Regulations, 2024," was opened for public consultation on 5 June.

Any entity wishing to establish or operate an LNG terminal must notify PNGRB before making the final investment decision (FID), as per the draft.

The oil regulator will base its approval on five criteria: promoting competition among operators, avoiding unproductive investments, ensuring adequate availability of natural gas throughout the country, protecting customers’ interests, and ensuring the availability of gas evacuation facilities from the terminal, according to the draft.

The proposed regulation requires companies planning new capacity to present a credible business plan for capacity utilisation and submit both the business plan and a detailed evacuation plan.

PNGRB will approve the completion schedule of the LNG terminal and can impose a financial penalty on the operator for failing to adhere to the schedule.