A wait-and-watch policy is being adopted by a number of industrial units in Kerala that are potential natural gas fuel users. LNG, termed cleanest fuel of 21 century, has reached the shores of Kochi, but industry in Kerala is yet to make the most of the opportunity.
FACT and BPCL Kochi have already taken the initiative to prepare the ground for utilising LNG as fuel. The process has already begun with Petronet LNG having fully prepared to meet the demand. More end-users were likely to join the bandwagon, a top official of the company said.
The question uppermost in the minds of decision makers of many companies is the economic advantage that the natural gas would bring in. It is a short-term outlook, the official, preferring anonymity, said.
Those companies which make a cost-benefit analysis at the present juncture are bound to lose in future, the official said. World over, LNG is being welcomed as the cleanest fuel available. Actually, it has come as a boon at a time when the oil reserves are depleting.
It would be advantageous to those who take a futuristic decision as ultimately LNG-based energy scenario is going to have much more international appeal. The availability too is assured. While large tracts of natural gas fields are being explored, advanced technology for exploring shale gas, another avenue for the gas, is also getting in place.
One of the key issues being debated in the gas marketing regime is the pricing. Variable pricing is in force, but there are historical reasons for the same. Dahej in Gujarat, where Petronet LNG began operations about decade before the Kochi project was launched, did get imported LNG at a much cheaper rate. With the demand-supply mode changing rapidly in the intervening period, it was irrational to think of getting the same contract price for Kochi, he said.
The indigenous gas is priced low as the pricing mechanism was decided several years ago. The pricing is set for a change and hike is inevitable.
Industries such as FACT have been pressurising the government for providing subsidy on LNG, as naphtha, used by the company earlier, had subsidy. It would be difficult for the government, which has been trying to remove subsidies on petroleum products, to take a decision.
There have been proposals for KSRTC to switch over from diesel to LNG, but here again, several administrative hurdles have to be overcome.