The vessel carrying liquefied natural gas from Qatar has reached Kochi and the natural gas is set to be offloaded at the Petronet LNG terminal at Puthuvype next week. The regasified LNG will be ready for supply to industrial units within the next few weeks.
As of now, only two bulk users — Fertilisers and Chemicals Travancore Limited (FACT) and Bharat Petroleum Corporation Ltd. (BPCL) Kochi — have made arrangements for receiving LNG.
Petronet LNG is in the process of entering into agreements with several other commercial users.
There are a host of industries interested in making use of LNG as fuel, but most of them are understood to be looking for a price advantage. It will be a win-win situation for the LNG users in the long run, assures Petronet LNG. Yet, there are few takers as of now.
The capacity utilisation of the terminal will be as low as 8-10 per cent during the initial operational stage. The 5MMTPA (million metric tonne per annum) capacity of Kochi terminal can be utilised only when the projected end-users are in functional mode.
National Thermal Power Corporation (NTPC) Kayamkulam and Kerala State Road Transport Corporation (KSRTC) are among other prospective users of the natural gas. NTPC has not yet entered into a deal with Petronet LNG. The undersea pipeline meant to carry gas from Puthuvype to Kayamkulam has not been laid.
KSRTC too has not been able to make a commitment because it would require initial investment worth crores to create infrastructure. The corporation requires government help towards this end.
Petronet LNG has proposals to transport gas by means of special trucks and barges. The company has already made a pact for supply of gas to HLL unit in Thiruvananthapuram.
But there will be a string of LNG customers sooner than later, says K.P. Ramesh, a senior official of GAIL India, the company which is entrusted with the laying of pipelines for carrying the gas to various places within and outside Kerala.
A project proposal for Kerala Metals and Minerals Ltd (KMML) Kollam is likely to come up soon. The plant there is using furnace oil at Rs.52 per litre and LPG at Rs.62 per kg now. The plant will be able to make a gain of Rs.60 crore per year if the fuel replacement is done with LNG, he says.
The city gas project, envisaged to provide natural gas for cooking, has also reached nowhere. The Petroleum and Natural Gas Regulatory Board (PNGRB), which has the authority to decide on the city gas projects in various cities, had invited bids two years ago, but cancelled it later. Efforts are underway to renew the effort for launching the city gas project in Kochi. State government representatives are understood to have met PNGRB officials for the purpose.
GAIL India has been struggling to lay pipelines to connect to Bangalore and Mangalore, according to its original plan. The company has faced opposition from land-owners in various parts of Kerala as well as Tamil Nadu, contributing to the delay in executing the work.
Significantly, the LNG plant at Dahej in Gujarat, which got functional several years ago, is planning to increase its capacity from 10 MMTPA to 15 MMTPA, apparently due to the high rate of utilization of natural gas there.