The Hindu Business Line : GAIL signs pact with prospective LNG customers in Kerala

IN a bid to make the proposed LNG terminal at Kochi a reality, GAIL (India) Ltd has signed `heads of agreements' with prospective customers of gas here on Tuesday.

The agreements were signed at a function organised by the Kerala State Industrial Development Corporation (KSIDC), the promotional agency of the State Government, which also acts as the nodal agency for developing the LNG terminal and gas pipeline projects in the State, according to an official release here.

The companies, which have signed the agreement are DC Power Ltd, Indsil Electrosmelts Ltd (IEL), Apollo Tyres Ltd (ATL) and Premier Tyres Ltd (PTL). DC Power is setting up a 107 MW gas-based power plant at Kasargod and its estimated demand of LNG would be 0.65 mmscmd, it said. The requirement of IEL, which proposes to set up a 50 MW gas-based power plant at Palakkad is estimated at 0.24 mmscmd of gas while the demand of ATL and PTL is estimated at 56,000 nm3/day as the companies would be shifting to environment-friendly natural gas from furnace oil for their operations, it said.

The agreements were signed on behalf of GAIL by Mr Gopinath Swamy, Zonal General Manager, and on behalf of the companies by Mr A. Gandikota, President, DC Power; Mr K. Rajan Jose, General Manager, IEL; Mr Satish Kumar, Group Manager (Engg), PTL; and Mr R. Venkatesh, Manager (Projects), ATL.

GAIL is promoting the gas pipeline project and would also function as the principal supplier of gas for customers from the Kochi terminal. According to Mr Venu Nallur, Executive Director, KSIDC, the gas utility company is also having serious discussions with other prospective customers such as FACT Ltd. Kerala Minerals and Metals Ltd, Excel Glasses Ltd, BPL Power Projects Ltd, Kasargod, Hindustan Newsprint Ltd, KSEB and Kochi Refineries Ltd (KRL) for supply of gas.

The recent studies by KSIDC through FACT Engineering and Design Organisation (FEDO) have indicated requirement of 12.3 mmscmd of gas for various projects in the State, excluding the requirement of gas for the expansion scheme of NTPC, Kayamkulam, he said. "There is also substantial requirement of gas for various foundry and textile units based at Coimbatore, which is less than 200 km away from the proposed LNG terminal here, he added.

GAIL would be signing agreements with other customers in the State, which may speed up implementation of the terminal here, officials said. While the terminal capacity suggested at Kochi is 10 mmscmd, the total requirement from Kerala and Tamil Nadu is estimated at 20 mmscmd, as per the recent FEDO study, they claimed.

Meanwhile, it is understood that the Chairman and Managing Director of Petronet LNG Ltd, Mr Suresh Mathur, is scheduled to hold discussions with the State Government officials and head of prospective buyer companies later this week here and at Thiruvananthapuram. PLL, which has proposed to set up a 2.5 million tonne LNG terminal at Puthu Vypeen near here, has already invested about Rs 32 crore on pre-project activities.