GAIL opposes IGX platform for LNG terminal capacity booking

IGX has proposed acting as a facilitator for regasification capacity bookings at LNG terminals, without getting involved in contractual negotiations or payment settlements. GAIL and other stakeholders submitted their views as part of the Petroleum and Natural Gas Regulatory Board‘s (PNGRB) consultation on the proposal.

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“Imposing an artificial layer of transaction costs for a service that does not streamline the fundamental contractual process will unjustifiably increase the financial burden on end-users,” GAIL said. Downstream natural gas consumers are already facing significant margin pressures due to high and volatile global LNG spot prices, it added.

GAIL, which operates an LNG terminal on India’s western coast, said information asymmetry has not been a significant barrier to participation by terminal users. “No significant inefficiencies in the existing framework have been observed that necessitate creation of a separate booking platform,” it said.

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More than half of India’s LNG regasification capacity of around 57.5 million tonnes per annum remains underutilised because of weak domestic gas demand. Under these circumstances, a booking platform is unlikely to lead to any meaningful increase in capacity utilisation, GAIL said.