1. Introduction

Liquefied Natural Gas (LNG) import infrastructure consists of facilities through which LNG is received from international markets, unloaded from LNG carriers, stored at cryogenic temperatures, regasified, and delivered into the domestic natural-gas pipeline network. A typical LNG import terminal may therefore include:

• marine jetty and berthing facilities;
• breakwaters and port infrastructure;
• LNG unloading arms and pipelines;
• cryogenic LNG storage tanks;
• regasification facilities;
• boil-off-gas management systems;
• safety and firefighting infrastructure; and
• pipelines connecting the terminal to the natural-gas grid.

In India, regulation is therefore multi-layered. The Petroleum and Natural Gas Regulatory Board (PNGRB) regulates registration and relevant technical/safety aspects, while environmental, coastal, port, land, industrial-safety and pipeline laws may simultaneously apply. PNGRB's current framework includes the PNGRB (Registration for Establishing and Operating Liquefied Natural Gas (LNG) Terminals) Regulations, 2025, together with technical and safety standards for LNG facilities. PNGRB

The legal objective is to reconcile four interests: energy security, investment and infrastructure development, competition/open access, and environmental and public safety.

2. Statutory foundation

The principal legislation is the Petroleum and Natural Gas Regulatory Board Act, 2006 (PNGRB Act).

PNGRB's statutory functions include registration of entities establishing and operating LNG terminals and protection of consumer interests through fair trade and competition. The Board also regulates access to common-carrier and contract-carrier pipelines. PNGRB

Section 15 — Registration

Section 15 is particularly important because an entity seeking to establish or operate an LNG terminal falls within the registration framework. The statutory scheme also contains transitional treatment for entities already carrying on such activities before the relevant appointed day. PNGRB

The Central Government has also framed the PNGRB (Eligibility Conditions for Registration of Liquefied Natural Gas Terminal) Rules, 2012. PNGRB

Consequently, LNG-terminal regulation is not simply a matter of obtaining a commercial licence. The developer must satisfy the statutory registration and regulatory requirements in addition to environmental and other approvals.

3. LNG terminal registration and regulatory control

The 2025 PNGRB LNG Terminal Regulations are now an important part of India's regulatory architecture. They concern registration for establishing and operating LNG terminals. PNGRB

Regulation becomes particularly significant because LNG terminals are capital-intensive infrastructure. Developers normally require substantial long-term commitments for:

• LNG procurement;
• storage capacity;
• regasification capacity;
• shipping arrangements;
• pipeline connectivity; and
• terminal financing.

This creates a regulatory balance. Excessive intervention may affect investment certainty, while insufficient regulation can create safety, competition and access problems.

Historically, industry participants have also debated whether LNG terminals should be subject to extensive common-carrier obligations. For example, submissions during the regulatory-development process argued that LNG terminals differ fundamentally from pipelines because terminal capacity involves storage tanks and berthing arrangements rather than a continuously variable transportation network. PNGRB

4. Open access and common-carrier issues

One of the most important legal questions is whether an LNG import terminal should provide capacity to third parties.

The 2012 eligibility framework contemplated an obligation concerning uncommitted regasification capacity. The regulatory material records a requirement concerning 20% of short-term uncommitted regasification capacity or 0.5 MMTPA, whichever is higher, as common-carrier capacity. PNGRB

This illustrates an important distinction:

Pipeline regulation primarily concerns transportation access, whereas LNG-terminal regulation concerns access to an import, storage and regasification facility.

The legal issues therefore include:

1. whether spare capacity must be offered;
2. how capacity is allocated;
3. whether long-term contractual commitments take priority;
4. how berthing slots are allocated;
5. whether access must be non-discriminatory; and
6. how terminal owners' property and investment rights are balanced against competition.

5. Environmental regulation

LNG import terminals are generally large coastal infrastructure projects and may trigger environmental-clearance requirements.

Important legal instruments include:

• Environment (Protection) Act, 1986;
• EIA Notification, 2006;
• Coastal Regulation Zone (CRZ) Notifications;
• Water and Air pollution-control legislation;
• environmental conditions imposed by competent authorities; and
• National Green Tribunal jurisdiction.

An LNG terminal can therefore require environmental appraisal concerning:

• marine ecology;
• dredging;
• breakwaters;
• coastal land use;
• thermal impacts from regasification;
• construction-related pollution;
• hazardous-material risks;
• fisheries and livelihoods; and
• cumulative impacts of port development.

The Chhara LNG litigation demonstrates the importance of these requirements.

6. Case Law

A. Panchabhai Nanjibhai Dhundhlva v. State of Gujarat (Gujarat High Court, 2021)

This is a particularly useful Indian case concerning a Greenfield LNG import terminal with a Floating Storage and Regasification Unit (FSRU) at Jafrabad, Gujarat.

The petitioners challenged the project principally on grounds concerning coastal regulation, land and alleged absence of appropriate permissions.

The Gujarat High Court noted that the project had undergone regulatory scrutiny, including consent from the Gujarat Pollution Control Board and environmental clearance. The Court found that the necessary permissions had been granted by competent authorities and concluded that there was no material demonstrating that the project was unlawful. Indian Kanoon

Legal significance

The case demonstrates that an LNG terminal cannot be assessed by looking at only one approval. A project may involve a chain of permissions from different authorities.

It also illustrates judicial restraint where:

• statutory authorities have considered the project;
• environmental procedures have been followed; and
• no clear statutory illegality is demonstrated.

The case is especially relevant to FSRU-based LNG infrastructure, which can present different land-use and construction questions from conventional onshore terminals.

B. Sayyed Mohammed Sabir Usman v. Union of India — Chhara LNG Project

The Chhara, Gujarat LNG project generated substantial environmental litigation concerning the development of an LNG storage and regasification terminal and associated port infrastructure.

The project involved a 5 MMTPA LNG storage and regasification terminal, together with related port/breakwater development. Environmental and CRZ clearances had been granted on 5 March 2019. Indian Kanoon

The litigation raised questions about:

• public consultation;
• environmental clearance;
• CRZ clearance;
• relationship between port and LNG-terminal components; and
• whether linked projects required a common environmental-impact assessment.

2026 NGT decision

On 7 September 2026, the National Green Tribunal's Western Zone Bench considered the appeals concerning the Chhara projects.

The Tribunal addressed, among other things, whether the breakwater extension and LNG-terminal project constituted sufficiently interlinked projects to require a common EIA. It ultimately dismissed the appeals and upheld the impugned environmental clearances. CaseMine

The Tribunal also considered the relationship between the EIA Notification, 2006, CRZ Notification, 2011 and the governmental Office Memorandum concerning integrated/interlinked projects. LawSathi Research

Legal significance

The Chhara litigation shows that LNG-terminal regulation extends beyond the terminal itself. Associated port infrastructure can become legally significant when determining the environmental impact and approval structure of an LNG project.

It also demonstrates the importance of identifying whether supposedly separate components are legally and environmentally interconnected.

C. ArcelorMittal Nippon Steel India Ltd. v. Government of Gujarat (2021)

This litigation involved issues surrounding development of a proposed LNG terminal at Hazira and the use of port infrastructure.

The proceedings illustrate another dimension of LNG infrastructure regulation: the interaction between LNG-terminal development and port/jetty rights and agreements. The case record refers to proposed LNG-terminal development, environmental and CRZ clearances and arrangements concerning port expansion. Indian Kanoon

Legal significance

An LNG terminal may depend upon infrastructure controlled under separate legal arrangements, including:

• port concessions;
• captive jetties;
• land allotments;
• maritime permissions;
• environmental approvals; and
• contractual rights concerning existing port infrastructure.

Therefore, obtaining PNGRB registration alone does not resolve all legal questions relating to an LNG import project.

7. Technical and safety regulation

LNG is stored at extremely low temperatures and presents significant fire, explosion, cryogenic and vapour-management risks.

PNGRB has a specific regulatory framework titled the Technical Standards and Specifications including Safety Standards for Liquefied Natural Gas Facilities Regulations, 2018, as amended. PNGRB

Technical regulation can address matters such as:

• LNG unloading systems;
• storage tanks;
• separation distances;
• fire protection;
• emergency shutdown systems;
• boil-off-gas systems;
• pressure control;
• vapour dispersion;
• hazardous areas;
• pipeline connections; and
• emergency-response arrangements.

The regulatory philosophy is therefore preventive: safety standards must be integrated into the design and operation of the terminal rather than treated only as post-accident requirements.

8. Port and maritime regulation

An LNG import terminal is also a maritime facility.

An LNG carrier must safely enter the port, berth, unload LNG and depart. Consequently, regulatory issues may involve:

• port authority permissions;
• navigation;
• dredging;
• breakwaters;
• berthing;
• marine safety;
• vessel compatibility;
• pilotage;
• harbour-management rules; and
• emergency response.

This creates an important legal distinction between terminal regulation and port regulation.

For example, the LNG terminal may be regulated by PNGRB while the physical port infrastructure is subject to the relevant maritime and port authorities.

9. Pipeline connectivity

An LNG terminal cannot ordinarily function as a complete import system without downstream transportation infrastructure.

After regasification, natural gas must enter pipelines connecting the terminal to consumers and regional or national gas networks.

PNGRB separately regulates natural-gas pipelines and has statutory functions relating to common-carrier and contract-carrier pipelines and access. PNGRB

This produces an important regulatory interface:

LNG carrier → terminal → regasification → transmission pipeline → distribution network → consumer

Each stage may involve different legal requirements.

A terminal could therefore have adequate LNG capacity but still face practical constraints if pipeline connectivity is inadequate.

10. Competition and consumer protection

The PNGRB Act expressly gives the Board a consumer-protection and competition-related role. PNGRB

For LNG infrastructure, competition issues can arise when:

• one terminal controls strategically important import capacity;
• capacity is reserved under long-term contracts;
• new importers seek access to existing facilities;
• terminal owners also participate in gas marketing;
• pipeline connectivity limits alternative suppliers; or
• allocation of berthing slots affects market access.

Regulation therefore seeks to prevent infrastructure bottlenecks from becoming barriers to competition.

11. Property rights versus regulatory obligations

An important constitutional and administrative-law issue is the relationship between private investment and regulatory control.

LNG terminals frequently involve billions of rupees of investment. Investors therefore require certainty concerning:

• capacity utilisation;
• tariffs and charges;
• access rights;
• land;
• port concessions;
• regulatory approvals; and
• long-term LNG supply contracts.

At the same time, the State may impose obligations in the public interest.

Industry submissions concerning LNG regulation have specifically questioned whether imposing extensive common-carrier obligations on private terminal infrastructure would exceed PNGRB's statutory authority or interfere with property rights. These are regulatory arguments rather than judicial findings, but they illustrate the legal tension surrounding terminal-access regulation. PNGRB

12. Major legal challenges in LNG import infrastructure

The principal legal challenges can be summarised as follows:

13. Principles emerging from the case law

Several broader principles emerge.

1. Multiple approvals are legally distinct

An LNG terminal cannot assume that PNGRB registration automatically authorises every aspect of the project. Environmental, coastal, port, land and safety approvals remain separately relevant.

2. Environmental procedure matters

The Chhara litigation demonstrates that courts and tribunals examine the procedural relationship between different project components and environmental approvals. CaseMine

3. Regulatory decisions receive judicial scrutiny, but legality remains the central question

In Panchabhai Nanjibhai, the Gujarat High Court focused substantially on whether competent authorities had granted the necessary permissions and whether statutory illegality had been demonstrated. Indian Kanoon

4. LNG terminals and ports are legally interconnected but not necessarily identical

A terminal may depend upon port infrastructure without every port component becoming part of the same regulatory approval.

5. FSRU technology does not eliminate regulatory obligations

Floating LNG infrastructure still raises environmental, coastal, marine, safety and regulatory-registration issues, as demonstrated by the Jafrabad litigation. Indian Kanoon

14. Conclusion

LNG Import Infrastructure Regulation in India is a multi-regulator legal system rather than a single licensing regime. The PNGRB Act and LNG-terminal regulations provide the principal petroleum-and-natural-gas regulatory framework, while environmental, CRZ, port, land, maritime, safety and pipeline laws operate alongside it.

The regulatory architecture seeks to achieve a balance between energy security and investment on one side, and safety, environmental protection, competition and public participation on the other.

The cases concerning Jafrabad LNG/FSRU infrastructure and the Chhara LNG terminal demonstrate how these competing interests are handled judicially. Panchabhai Nanjibhai Dhundhlva v. State of Gujarat illustrates the importance of obtaining and maintaining the necessary statutory permissions, while the 2026 Chhara NGT decision illustrates the scrutiny applied to environmental and CRZ clearances for LNG-terminal and associated port infrastructure. Indian Kanoon

Thus, the future legal development of LNG import infrastructure is likely to focus on open access, regulatory certainty, FSRU and small-scale LNG facilities, safety standards, environmental impact, pipeline integration and transparent capacity allocation. The current PNGRB framework, including the 2025 LNG Terminal Regulations, is an important part of that evolving legal architecture. PNGRB