Viability issues: Think Gas seeks 30% reduction in LNG terminal charges

New Delhi: City gas distributor Think Gas has told the downstream regulator that "prohibitive terminal economics currently undermine the viability of third-party usage" of LNG terminals and called for a 30% reduction in usage charges at all LNG terminals.

Think Gas, backed by I Squared Capital, Osaka Gas and Sumitomo Corporation, has distribution licences for 19 city gas areas, covering 49 districts across the country.

"High regasification charges across LNG terminals ( '73-104/MMBTU) and truck loading charges ('81-120/MMBTU), burdened with annual escalation of 5% per annum, require a mandatory moderation of these charges by at least 30% across all LNG Terminals," Think Gas wrote to the Petroleum and Natural Gas Regulatory Board (PNGRB) during a consultation process on the Indian Gas Exchange proposal to set up a platform to book LNG terminal capacity.


PNGRB doesn't regulate regasification fees charged by terminals.

India has eight operating LNG terminals with a total capacity of about 58.5 million tonnes per annum. More than half of the import capacity remains underutilised due to weak demand.

Think Gas said LNG terminal operators impose "unreasonably high" boil-off gas charges despite there being no actual boil-off during continuous LNG operations. This imposes "an artificial cost burden on end consumers and hinders the development of the natural gas market", Think Gas said.

The city gas distributor cited lower terminal fees, quick connectivity of all trunk pipelines to the national gas grid system and an extended period for evacuation of LNG cargo at terminals as critical enablers for the proposed IGX platform to take off.