New Delhi, Sept. 5 -- The petroleum and natural gas regulator has warned that it will encash bank guarantees and terminate contracts of city gas distributors if they fail to submit annual performance bond guarantees (PBG) on time.

A performance bond is a financial guarantee and is required for grant of authorization to an entity that wins a project to set up and operate piped natural gas (PNG) and compressed natural gas (CNG) networks.

Such guarantees are required to be submitted at regular intervals as a project progresses towards completion. It is usually in the form of a demand draft, pay order or bank guarantee from any scheduled bank for the required amount.

The Petroleum & Natural Gas Regulatory Board (PNGRB) said in a notificati...