LNG terminal in city is making loss as there are not enough takers for gas

Poor clientele and a stalled pipeline project have forced Petronet LNG Limited to consider leasing out its storage tanks to cut losses and stay afloat. The terminal operates five-million-tonne-per-year liquefied natural gas (LNG) receiving and re-gassification facility here.

Union Petroleum Secretary Vivek Rae said here Petronet was making losses on its Kochi operations because there were not enough takers for gas from Kochi.

The terminal, where the first consignment of gas arrived in late August, is running at six to seven per cent of its capacity, said Mr. Rae after inaugurating the 18th Refinery Technology Meet on Monday.

Besides, work on the 900-km pipeline to link cities in Karnataka and Tamil Nadu to the Kochi terminal has been stalled. Petronet’s world-class facility in Kochi, which cost more than Rs. 4,000 crore, includes two onshore, over-ground tanks of 1,55,000 cubic metre capacity each, built by IHI Japan using patented technology. They are among the largest tanks in India for natural gas storage. Mr. Rae said gas infrastructure could be made available to any company that wanted it on lease to ship gas to any part of the country.

Gas price

Quelling the clamour for cheap gas, he said it was unrealistic to expect natural gas at less than $5 dollars a unit. India will see a new price regime in which natural gas will have a uniform price across the country and would be linked to the world gas market.

Though he felt the shale gas factor might depress natural gas price a little, it might not make a difference as expected earlier. Any subsidy for priority sectors would come through respective ministries, he said when asked about the possibility of fertilizer manufacturers being given some breathing space on the price front. To put a lower price tag on domestic gas would be to discourage producers here, he said.

Natural gas was the fuel of the future and all the states through which gas pipelines passed through had the opportunity to revive small and medium sector industrial units.

He pointed to the case of units in Tamil Nadu, which have faced acute power shortage in the past.

Kerala coast

Explorations off the Kerala-Konkan coast had not given cause for optimism but the Petroleum Ministry planned to put up more blocks for exploration to see if any bidders came along, said Mr. Rae.

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