The Hindu Business Line : Petronet promoters to discuss future of Kochi LNG terminal this month

PETRONET LNG Ltd (PLL) is to hold a meeting of its promoters later this month to take stock of the progress on the proposed 2.5-million-tonne-per-annum LNG terminal to be set up here by the company.

The meeting would discuss the proposal of Kochi Refineries Ltd (KRL) and the Heads of Agreement signed by GAIL (India) Ltd recently with prospective buyers in Kerala.

"I am optimistic that a final decision would emerge at the meeting," Mr S.C. Mathur, Chairman and Managing Director, PLL, told Business Line.

The promoters of the company are ONGC, IOC, BPCL and GAIL. KRL, a subsidiary of BPCL, which is also a promoter of PLL, had already intimated that it "could take up marketing of the entire quantity of 2.5 m.t. of LNG besides operating the terminal on contract basis." It had also offered to take equity in the company.

The implementation of the project has been pending for about five years for want of an assured market and despite the fact that PLL had obtained all required approvals/clearances from the relevant Central and State government departments/agencies and spent around Rs 32 crore on pre-project activities.

Meanwhile, GAIL, which would be marketing 60 per cent of the LNG, had recently signed heads of agreement with the Fertilisers and Chemicals Travancore Ltd (FACT) and other 10 industrial establishments in the State.

According to the agreement signed with FACT, LNG is expected to be available in 2006-07 and its requirements would be in the order of 0.5 m.t. a year for its fertiliser and petrochemical units. GAIL sources said that it would be finalising such agreements with some more PSUs in the State soon.

GAIL would complete laying of pipeline from Kochi to Mangalore and Bangalore in one year once the PLL commenced work on its terminal here, they said. The total cost would come to around Rs 2,000 crore, they said.

The market study conducted by GAIL earlier and by FACT Engineering and Design Organisation recently had shown adequate market for the gas from Kochi, they added.