The decision of the Tamil Nadu government to file a review petition in the Supreme Court against Tuesday’s order that permits GAIL India to go ahead with its proposed pipeline project connecting Kochi and Bengaluru through seven districts of Tamil Nadu has cast a shadow over the prospects of Petronet LNG increasing its capacity utilisation in Kochi.
The 5-mmtpa (million metric tonnes per annum) LNG terminal, set up by the company at Puthuvype in Kochi two years ago, has been facing low offtake, posing a threat to its long-term viability. Less than 10 per cent of its capacity is utilised now.
Dent in profit
Petronet has been forced to lease out a part of its capacity to LNG business entities in the absence of mass consumers. The operation of the Kochi terminal has caused considerable dent in the profit of the company. BPCL Kochi is its only major consumer now.
The Rs.3,032-crore pipeline project was approved in 2010 and GAIL India launched the work in 2012 for the 1,114-km stretch on the Kochi-Koottanad-Kanjirkkode-Mangaluru and Bengaluru route.
Seven districts
The Kochi-Koottanad-Bengaluru pipeline is scheduled to pass through 310 km spread over seven districts of Tamil Nadu: Salem, Coimbatore, Krishnagiri, Dharmapuri, Namakkal, Erode, and Tirupur.
The Tamil Nadu government had asked GAIL to change the route to avoid agricultural fields after farmers opposed the use of their land for the project under the Petroleum and Minerals Pipelines (Acquisition of Rights of Users in Land) Act, 1962.
The Act authorises authorities to make use of the land for laying the pipeline though the ownership rests with the landowner.
Though construction activities are not permitted on the land, cultivation other than planting of trees is allowed.
Court directive
Upholding the Union government’s authority to undertake the work, the apex court had on Tuesday asked GAIL to increase the rate of compensation for the land being acquired.
The court had also asked the State to revise the land valuation, senior officials of GAIL India told The Hindu .
The pipeline connectivity to Bengaluru will enable Petronet to supply gas to major consumers in Kerala, Karnataka, and Tamil Nadu.
Three States
It will also enable Kerala to get connected to the national gas grid and this would benefit consumers in all the three States as subsidised gas quota could be made available to the entities concerned.
Tamil Nadu to go for review petition in Supreme Court on pipeline linking Kochi, Bengaluru
