Piped natural gas for homes in Kochi project on the backburner

'PNG supply would be the ideal solution to the worries arising out of price escalation, subsidy element and scarcity of LPG.’

Having plenty of gas at home to cook food is a fantastic idea that could change the life of Kochiites.

But the idea of bringing piped natural gas (PNG) to the kitchen might take a longer time to materialise.

City gas project, conceived to distribute natural gas to homes, was expected to take off along with the commissioning of Petronet LNG terminal at Puthuvype. While the terminal is awaiting inauguration, the domestic gas supply scheme has reached nowhere.

Petroleum and Natural Gas Regulatory Board (PNGRB), the government body authorised to initiate procedures for establishing the required infrastructure for PNG supply to households, is yet to take action in that direction.

PNG distribution is a scheme that requires much more urgency than the Metro rail project, a senior official of a public sector petroleum company said. PNG supply would be the ideal solution to the worries arising out of price escalation, subsidy element and scarcity of LPG, but the government is following a lackadaisical attitude towards the PNG project, he said.

Cost-effective

PNG supply to hotels would immensely benefit them in terms of cost-effectiveness while the government will gain from taxes. Each star hotel in the city will gain by at least Rs.40 lakh per annum on cooking gas bill, according to an expert analysis. The government’s loss on account of the promised additional supply of subsidised LPG cylinders under the present regime could also be avoided if PNG takes over the scene.

Kerala State Industrial Development Corporation (KSIDC) had signed a shareholders agreement (SHA) last year with GAIL (India) Limited to set up a joint venture, Kerala GAIL Gas Limited, to pursue city gas distribution opportunities in the State. GAIL (India) Limited is developing the natural gas infrastructure in Kerala.

It has already laid about 50 km-long pipelines to Ambalamedu in the city, to facilitate supply of regasified LNG to a host of industries.

GAIL (India) Limited is also entrusted with the task of laying the Kochi-Koottanad-Bangalore-Mangalore pipeline, of about 720 km in length, which will pass through the States of Karnataka and Tamil Nadu, apart from Kerala.

Though Kerala Gail Gas Limited is ready to participate in the bidding process to be initiated by the PNGRB, there is no clue as to when the procedure will start. PNGRB had included Ernakulam in the list of 8 cities where bids for setting up city gas infrastructure were floated about two years ago.

The procedure for selection of entities was postponed twice and cancelled in November, 2011.

Several reasons have been cited for the cancellation. One of them is that PNGRB’s authority to determine the price of the product as well as the transporting cost has been challenged in the court. The case is understood to be pending before the Supreme Court.

Large volumes

Another reason is that the sustainability of the LNG based business depends on large volumes which could be ensured only if the proposed inter-State pipeline network is completed.

With opposition arising from various places within and outside Kerala, the pipe-laying schedule has gone astray. Under the prevailing situation, it is for the Kerala State government to pressurise the union government to expedite the city gas project.

The State government has written to the concerned central department recently, according to official sources.

Obviously, it is not enough. Unless there is a strong popular move a la metro rail campaign initiated by various organisations and political parties, it might take much more time to execute the project.