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After parliamentary panel flags limited CBG progress, state oil firms cancel 87 LoIs
State-run oil and gas companies have cancelled letters of Intent (LoIs) issued to 87 “non-serious candidates” for setting up of compressed biogas (CBG) plants after a parliamentary panel recommended the review of LoIs, citing limited progress in building CBG plants.
Oil and gas companies issue LoIs to entrepreneurs to procure CBG from them. The entrepreneurs use the LoI to receive regulatory clearances and loans for their CBG projects. After the standing committee on petroleum and natural flagged the issue of LoIs, the oil ministry advised state-run oil and gas companies to review the selection criteria for LoI issuance “so that only serious applicants are selected and also to withdraw the LoIs issued to non-performing entrepreneurs,” the committee said in its latest report.
As of June 1, 2022, a total of 3,263 LoIs had been issued by the state oil companies, the committee said in its previous report tabled in December. Of this, only 35 CBG plants had been commissioned and around 40 plants were expected to be commissioned by March 2023, it said.
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