The Indian Petroleum and Natural Gas Regulatory Board (PNGRB) is considering increasing regulatory control over India's LNG import terminals, which could slow investments in the sector due to the potentially tightened oversight.
PNGRB has issued a draft proposal of new regulations which include certification of registration by PNGRB for each new LNG import project. Developers of terminals could face fines in case the start-up dates of their projects are delayed, Argus reports.
Under the draft regulations, LNG project developers will also have to disclose publicly their tariffs for regasification and other charges.
According to Argus, the tighter control over the LNG import terminals could be an attempt to reverse the falling utilization rates at India's facilities over the past year.
For Indian firms, securing LNG supply is crucial as consumption of natural gas in industrial activities is set to soar.
India's industry expansion and rising oil refining to meet higher fuel demand are set to drive a tripling of the country's natural gas consumption by 2050, the U.S. Energy Information Administration (EIA) said earlier this year.
In 2022, India's gas consumption amounted to 7.0 billion cubic feet per day (Bcf/d), with over 70% of the demand coming from the industrial sector. By 2050, India's natural gas consumption is set to more than triple to 23.2 Bcf/d, according to EIA's estimates.
Among India's five consuming sectors, the industrial sector's share of gas consumption will grow the most, rising to 80% of total consumption, followed by the transportation sector rising to 10%.
Per the EIA forecasts, India's gas demand - buoyed by oil refining and other industrial production - is expected to grow at an annual rate of 4.4% by 2050, more than twice the 2.0% annual growth rate of gas consumption in China, the next-fastest-growing country.
India's economy is growing faster than all other major economies, and so is its demand for energy.
By Charles Kennedy for Oilprice.com
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