The Hindu Business Line : Kochi LNG terminal may not be an `Onam gift' after all

The Union Power Minister, Mr P.M. Sayeed, had some time back promised that the terminal would be his Onam gift to the State. But itis quite unlikely that anything concrete would emerge before the commencement of the festival on August 27.

Industry sources as well as energy experts are not optimistic about a clear picture emerging before the beginning of Onam.

The State has been waiting for about five years for a terminal to be set up by Petronet LNG Ltd (PLL), a company set up by the Centre. The company commenced operations here along with the Dahej project in Gujarat, which has already become operational.

It had also invested around Rs 32 crore on pre-project activities apart from obtaining all the clearances and approvals of various Central and State Government authorities.

The terminal was planned eyeing on the National Thermal Power Corporation (NTPC), which is to expand its capacity from the present 350 MW to 2,300 MW in the next Plan, as the anchor customer. But the corporation has made it clear that it would strictly go by the lowest price offer to supply gas.

Also, opening of the technical bids wherein Petronet is a participant along with seven others including Reliance Industries, scheduled to be on July 21, has been postponed and it is expected in September, according to official sources.

A decision on selecting the lowest bidder would emerge only after evaluating the price bids that would be called after opening the technical bids in September, they said.

Reliance Industries has already offered natural gas from its Krishna Godavari basin at $2.97 mmbtu to NTPC for its Gandhar and Kawas power plants in Gujarat.

According to energy experts here, Petronet might not be able to supply LNG at less than $4 mmbtu. Probably, it is the reason that the company has been looking for other buyers now.

Industry sources told Business Line that a market survey conducted recently by the FACT Engineering and Design Organisation (FEDO) under the auspices of the Kerala State Industrial Development Corporation (KSIDC) has revealed that there was sufficient demand without NTPC for LNG.

But, Petronet might require commitments from the prospective buyers, who seem to be reluctant to commit in the absence of a clear idea on the pricing, they pointed out.

On the other hand, the Oil and Natural Gas Corporation is reported to be planning to set up a LNG terminal in Mangalore as it has an assured market existing there. In that case LNG could be brought to Kochi by pipeline.

Even GAIL (India) Ltd has indicated its desire to set up a terminal in Kerala along with a petrochemical complex in North Kerala involving a total investment of over Rs 10,000 crore.

Meanwhile, industry sources said that the terminal and other ancillary projects would generate employment to around 4,000 people, besides generating tangible revenue for the State, as it would become a supplier of gas instead of a consumer.

More Stories on : Shipping | Kerala | Petroleum

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Delhi, Mumbai airports revamp — IMG asks consultant to firm up norms to shortlist bidders

Jet Airways to launch new Delhi-Patna-Delhi flight

New policy for major ports on anvil

Kochi LNG terminal may not be an `Onam gift' after all

DHL unveils $100-million air cargo facility in Hong Kong

Perilous ride