Petronet LNG Limited, which has set up its LNG terminal at Puthuvype here, is going ahead with the plan to lease its storage facilities.

The process for the leasing of part of the 5 mmtpa (million metric tonnes per annum) terminal is in progress and a final deal is likely to be struck within two months, according to officials of the company.

The company had invited proposals from LNG suppliers, traders and other operators for short-to-medium term leasing of storage capacity. Petronet has received very good response from national and international entities and the proposals were being examined before entering the next stage of the process, a top official told The Hindu.

“A lot of interest has been shown by various companies. We are pleasantly surprised by the kind of response,” he said.

Kochi’s strategic location at the gateway to Asian and South Asian LNG market is a key advantage to the terminal. There are foreign players who are ready to take the storage capacity on lease as they can store and take away gas whenever required. Only Europe has such facility now, according to him.

The Kochi terminal has two storage tanks of nearly 1,82,000 cubic metre capacity each, with regasification facilities. The terminal has a jetty for berthing facilities to handle LNG carriers of up to 2,16,000 cubic metre capacity. The terminal has already handled three carriers since the terminal was officially commissioned in the beginning of the year.

The company had prepared the plan for leasing out following low utilization (below 10 per cent) of its capacity. At present, BPCL Kochi is the only bulk consumer of the gas from the terminal. FACT which had begun utilising gas for its fertilizer plant, discontinued it following disagreement over pricing.

NTPC Kayamkulam is in the process of converting its machinery to receive LNG to make use of natural gas as feedstock for its power generation plant. The public sector company would require 1.75 million cubic metres of gas per day for the new phase of operation, expected to begin next year. In the absence of pipeline connectivity between Kochi and Kayamkulam to transport gas, alternative arrangements would have to be made.

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