The Hindu Business Line : Commissioning of Kochi LNG terminal likely to be delayed

COMMISSIONING of the LNG terminal at Kochi might be delayed as several studies are still to be conducted and Petronet LNG Ltd (PLL) is yet to select the parties for preparing the designs and tender documents.

Though the PLL sources said that the entire process including the appointment of an EPC contractor would take at least nine months, given the prevailing trend it is likely to take more, Mr K. Chandran Pillai, MP and CITU State General Secretary, told Business Line.

The reasons for such an apprehension are the constant changes in the commissioning date, lack of co-ordination between the agencies, and proposed fresh marine studies, he added.

PLL had been formally handed over 32 hectares by the Cochin Port Trust on May 27.

However, the PLL sources said, marine studies would mainly involve taking of measurements of maximum length of waves during the monsoon off the Puthuvypeen coast where the terminal has to be set up. Based on this, only breakwater designs could be prepared, they added.

But according to Mr Pillai, PLL is said to have completed most of the engineering activities long back, such as such as detailed project report, land survey and soil investigation, and seabed engineering, oceanographic, and marine geo-technical investigations.

It had also obtained all the statutory approvals about a year ago, he added.

Now it has pre-qualified four EPC contractors. Yet, commencement of construction work of the project might take about one year.

Delay in commissioning of the terminal would have adverse impact on the thermal power generation and supply of power to HT and EHT consumers.

Similarly, it would negatively affect the prospects of Fertilisers and Chemicals Travancore, which is using high-cost naphtha as feedstock.

According to him, the Central inter-Ministerial working group had already decided to substitute naphtha with LNG in fertiliser manufacturing units.

Given this situation, inordinate delay in commissioning the terminal here would have serious impact on FACT.

"Besides, in such a situation, the prospective investors who had shown interest in setting up units based on LNG in Kerala and neighbouring States would have second thoughts."

Mr Pillai said that PLL's terminal at Dahej is currently under expansion from five million tonnes per annum (mtpa) to 7.5 mtpa and there is every possibility that the 2.5 mtpa gas earmarked for the Kochi terminal from RasGas Qatar would be diverted to Dahej because of the delay in implementing the project here.

"In that case, it might have to enter into SPA with alternate supply sources, which could result in further delays."

It is also understood that strong lobbying is going on for setting up a five mtpa LNG terminal at Mangalore, he added.

If this materialises earlier, the Kochi terminal would be deprived of demand from the northern part of the State.

Attributing the delay to lack of political will and aggressive following up, Mr Pillai said that the State Government should pursue the issue at a faster pace so as to get the terminal commissioned by the date projected now.

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