Financial Daily from THE HINDU group of publications
Monday, Oct 18, 2004
Industry & Economy
Aiyar hits out at Karnataka, ONGC on SEZ pact
Bangalore , Oct. 17
OIL and Natural Gas Corporation's recent investment plan in Karnataka has drawn flak from the Union Minister for Petroleum and Natural Gas, Mr Mani Shankar Aiyar. ONGC had, on August 30, signed an MoU with the Karnataka Government to develop a special economic zone (SEZ) at Mangalore at an investment of up to Rs 25,000 crore staggered over a few years.
Mr Aiyar today faulted ONGC for committing a "humungous" amount in non-core areas and the Karnataka Government for putting all its eggs in the ONGC basket. "We can re-conceive the role of petroleum companies in the (proposed) SEZ. It would also be better for you to diversify the numbers and my company to be focussing on its core competence" of exploration and discovery of natural gas, Mr Aiyar said in strong terms after inaugurating Bharat Petroleum Corporation Ltd's LPG bottling plant at Solur village, 50 km from here.
Mr Aiyar said it was important for ONGC to invest in the discovery of natural gas to fuel the country's future rather than sink Rs 25,000 crore in the SEZ. The proposal includes setting up an LNG terminal with downstream projects and a gas pipeline from Mangalore to Chennai via Hassan and Bangalore.
"ONGC must make available through itself all resources that are optimally required for finding more gas and more oil - which is the primary charge placed on it. Pipelines for gas and oil, petrochemical plants, electrical utilities are all very important for the growth of Karnataka but these are not necessarily the points of growth for a corporation whose core competence is exploration of gas," he said.
There was GAIL to lay the pipeline, Petronet to set up the LNG terminal, while a downstream refining company would be a better partner to run the SEZ in Mangalore, he remarked. Suggesting a detailed feasibility study of the project, Mr Aiyar said the State should rather expand the MoU to include whole of Ministry of Petroleum and Natural Gas.
"I think some rethinking is required. But we don't want to put the project in jeopardy but find a more optimal way of investing in it," he clarified. "I'm offering the services of all the corporations in my sector."
To a request from the State Industry Minister, Mr P.G.R. Sindhia, for bringing CNG to Bangalore, Mr Aiyar said the State Government can make its proposal and "We will work with you."
BPCL's bottling plant: Bharat Petroleum's latest LPG bottling plant, its 44th in the country, is spread over 39 acres. It was set up in a record time of 16 months at an investment of Rs 28 crore. It is also the third in the State after Mangalore and Dharwad.
According to BPCL Chairman and Managing Director, Mr S. Behuria, the plant has an installed capacity of 44 million tonnes per year and can fill 31 lakh cylinders a year.
It will cater to the LPG needs of Bangalore urban and rural, Tumkur, Kolar and Chitradurga districts, benefiting some five-lakh Bharatgas customers.
The plant can also take up filling of the economical 5-kg cylinders for rural households as well as support the auto LPG stations in Bangalore, the highest consumer of auto LPG sets.
With the commissioning of the plant, BPCL hopes to raise its LPG capacity to 110 mtpa, including 44 mtpa at Mangalore and 22 mtpa at Dharwad.
"LPG demand is growing at an annual rate of 12 per cent. The demand is expected to increase to 12.7 million tonnes by 2007-08. Since indigenous production is falling short of requirement, India will continue to import LPG to the tune of 1.5 million tonnes-2 million tonnes per annum," Mr Aiyar said.
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