Gas regulator preps new storage plan as war blocks supplies

India's energy regulator is moving to plug a widening hole in the country’s gas supply chain as the conflict in West Asia threatens supplies of natural gas that is vital to power, fertiliser and city gas distribution networks.

- Rituraj Baruah

India imports 55% of its gas requirement.

According to two people aware of developments, the Petroleum and Natural Gas Regulatory Board (PNGRB) is preparing to propose over ground storage facilities for natural gas near the country’s existing LNG (liquefied natural gas) terminals—India currently has eight such terminals. The storage would be used for both commercial purposes and for strategic requirements during exigencies, they said.

“PNGRB may propose the government to set up storage reserves for LNG, preferably near existing terminals to support India’s growing demand at times of exigencies and ensure energy security,” one of the two people said on the condition of anonymity, adding that the regulator would approach the ministry of petroleum and natural gas to frame rules under the PNGRB Act.

India imports 55% of its gas requirement.

The urgency follows a halt in tanker traffic through the Strait of Hormuz, which carries more than half of India’s LNG imports, and a spike in prices of LNG after an attack on QatarEnergy’s Ras Laffan complex on Monday.

The move assumes significance considering India imports 55% of its gas requirement and holds barely 20 days of inventory—including supplies in transit. In terms of LNG, India has stocks of up to 21 days, the officials said.