The Petroleum and Natural Gas Ministry is taking utmost efforts to encourage higher availability of imported liquefied natural gas (LNG) in India. In such efforts, the ministry in November 2012 notified the rules on eligibility conditions for registration of LNG terminals. The move is expected to foster setting up of LNG terminals in the country.

The salient features of the new rules include (i) offer at all times, after registration, 20 per cent of its short term (less than five year contract) uncommitted re-gasification capacity or five lakh tpa, whichever is higher, as common carrier capacity; (ii) adhere to the technical standards and specifications including safety standards in activities relating to petroleum, petroleum products and natural gas, as prescribed by the Board by regulations, which are in force, including those prescribed by the Oil Industry Safety Directorate and; (iii) furnish a bank guarantee for an amount equal to one per cent of the estimated project cost of the liquefied natural gas terminal or Rs25 crore, whichever is less.

Meanwhile, on the Power sector front, the disagreement between the power firms and CIL continues. Ministry of Power has sought for changes in the latest fuel supply agreements (FSAs) readied by CIL. P Uma Shankar, Power Secretary, in a recent communication to his counterpart in Coal Ministry S.K. Srivastava has pointed out 10 issues that need to be modified in the FSAs. As per the communication, new FSA still contains a few clauses, which are against the interests of power developers. The issues raised by the Power Secretary include annual contracted quantity, end use of coal, source of supply, schedules, collection of samples, termination of contract and force majeure. In the CIL's FSA it has mentioned that if there are any changes in the distribution system, it will discuss with the buyer. And if both parties do not arrive at an agreement within 30 days, the miner can terminate the deal. The Power Ministry has strongly opposed the clause and said any termination of contract should be approved by the Central Government. CIL will terminate the pact if the power producers cannot renew their PPAs with a State electricity distribution utility within six months of its expiry. The Power Ministry wants this clause to be deleted.

This apart, the Power Ministry is expected to finalise new bidding norms for thermal plants soon. The ministry has proposed having separate set of bidding norms for coal linkage and captive coal projects for the domestic fuel based projects whereas no changes are being proposed in the present bidding norms for projects based on imported coal. The new documents have proposed that the projects where the location of the plant is not specified the bidding will be done amongst the domestic coal linkage holders who have uncontracted capacities under long term PPA through competitive bidding.

On the state level while Rajasthan Government has announced that the state policy for the Textile sector will be announced in 2013. The policy will emphasise on manufacturing, skill development and boosting exports. However, details about the required funding for the proposed policy are not yet being disclosed. Currently, the State Department of Industries has prepared a draft policy which will be circulated soon to concerned departments seeking their comments. The Andhra Pradesh Government has come up with an idea to ensure a buyer-seller link outside the state power utilities to minimise the subsidy burden. As per the Energy Department of Andhra Pradesh, the discoms will have to include the cost of solar power in their filings with the state electricity regulatory commission (APERC). However, the extra cost to the extent not covered by tariff order will have to be recovered through sale at the rate at which it was procured. In case the solar power is not fully subscribed to by the private industry, the government will bear the differential between the tariff allowed by the regulator and the actual cost paid to the developers by the power utilities for the remaining power. The government orders, however, do not permit the prospective solar power developers to set up their project at a location of their choice but only under specified substations to be notified by APTransco.