Gas economy: Centre planning to change LNG pipeline pricing policy

The second of the two-part series talks about why zonal pricing may be on the way out

In a surprise announcement, Petroleum and Natural Gas Minister Dharmendra Pradhan recently said that the government is planning to change the pricing formula for building gas pipelines.
 

At a virtual workshop with the International Energy Agency this month, Pradhan said, “The present zonal tariff structure for gas pipelines results in additive tariffs for usage of multiple pipelines to transport natural gas from distant gas supply sources. It causes wide disparity in pipeline tariffs, particularly for the buyers.”
 

According to the government’s projections, the building of liquefied natural gas (LNG) pipelines is expected to be a $60 billion investment opportunity by