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Oil ministry notifies eligibility for setting up LNG terminals

Posted on Nov 16, 10:39PM | IANS

The petroleum ministry Friday notified eligibility criteria for registration of LNG terminals to facilitate setting up liquefied natural gas terminals for imported LNG.

The oil ministry said the "rules on eligibility conditions" were being notified to promote the setting up of LNG terminals "in an environment of equitable access and commercial transparency so as to foster higher availability of imported Liquefied Natural Gas in the country."

Among the eligibility conditions is the post-registration offer of constant carrier capacity of 20 percent of uncommitted re-gasification capacity, or 0.5 million metric tonnes per annum (MMTPA), whichever is higher.

Another condition requires furnishing a bank guarantee for an amount equal to 1 percent of the estimated project cost of the liquified natural gas terminal, or Rs.25 crore, whichever is less.

As domestic gas output continues to dip, the country's biggest gas importer Petronet LNG is set to commission its second and the country's third LNG import terminal at Kochi.

The two currently operational LNG terminals are at Hazira and Dahej, both in Gujarat.

Government officials said that with increasing demand for gas in the country companies are firming up plans to enable LNG import terminals.

A third terminal in Gujarat is being implemented at Mundra and talks are on between infrastructure company Larsen and Toubro and state-owned Gujarat State Petroleum Corporation (GSPC) to set a fourth terminal in partnership near Okha.

Mumbai-based infrastructure major Shahpoorji Pallonji Mistry has decided to set up an LNG import terminal in a joint venture with Hindustan Petroleum Corporation Ltd in Gujarat, while state-run GAIL is in the process of commissioning a 5 million tonnes facility at Dabhol.

India's natural gas production of about 143 million cubic meters per day (mmcmd) is short of demand of 194 mmcmd this fiscal. The demand is projected to rise to 466 mmcmd by 2016-17, according to 12th Plan projections.