The commissioning of the Rs 4,200 crore LNG terminal in Kochi has put Kerala on the world LNG map, heralding a new era in the State’s industrial development.
This will be the fourth LNG terminal in the country after Dahej and Hazira in Gujarat and Dhabol in Maharasthra.
With the arrival of the first vessel carrying 1.23 lakh cubic metres of cargo on Tuesday, Petronet LNG Ltd, which has set up a terminal at Puthuvypeen, is all set to start the first phase of commercial supply soon.
Public sector FACT and BPCL-Kochi Refinery will be among the first consumers of re-gasified LNG from PLL’s Kochi terminal.
Several other companies in and around Kochi such as Hindustan Organic Chemicals, Nitta Gelattin, BSES Power Project at Brahmapuram and even some firms in the southern part of the State, are in the queue to receive the re-gasified LNG.
The commissioning cargo has come from RaasGas, Qatar, a reliable supplier and world leader in LNG which supplies 7.5 million a year to Petronet at Dahej Terminal. However, Petronet LNG could start operations utilising less than 10 per cent of the installed capacity of 5 million tonnes.
A. K. Balyan, Chairman and Managing Director, said the company is worried over the delay in completing the 900 km GAIL pipeline network from the Kochi terminal to Karnataka and Tamil Nadu for gas distribution. The first phase of the pipeline network covered only 44 km, which would cater to limited industrial areas within the city, he said.
Due to these constraints, he said the second phase of the terminal connecting Kochi to Mangalore and Bangalore was not ready.
“We have no other options but to operate the terminal with lower capacity utilising only 10 per cent of the installed capacity,” he said. Because of this, the company has installed imported equipments to prevent gas leakage.
Asked on the objections raised by Tamil Nadu Government on the pipelines passing through farmlands, he said the matter is pending with the court and expects it to be resolved soon. It may be recalled that farmers in various parts of Kerala also raised objections on laying the pipeline beneath cultivated agricultural lands, as they fear it may damage crop and affect productivity.
A senior official in GAIL, Kochi, said the work has been stalled in Kerala’s northern districts especially Kannur, Kozhikode and Malappuram.
Gas pricing
Regarding the pricing of gas, he said it depends on cost of transportation. At present, the landing price of LNG is hovering around $ 14.5 mmbtu (million metric British thermal unit)
Industry sources, however, expressed apprehensions over the economic viability of the gas at this price range because it would be made available to the end user at around $19.5 mmbtu by paying VAT, transportation charges and customs duty.