The Hindu Business Line : GAIL board to approve Rs 9,750-cr investments in Kerala projects

THE board of directors of GAIL (India) Ltd is to approve the company's investments in Kerala aggregating Rs 9,750 crore in four projects, which are expected to take off next year.

All these downstream projects of LNG are to become operational when the LNG terminal of Petronet LNG Ltd (PLL) is commissioned by the last quarter of 2009, said Mr Proshanto Banerjee, Chairman and Managing Director of GAIL, at a press conference here held by him along with Mr P. Dasgupta, CMD, PLL, on Friday.

He said the detailed feasibility report of the company's gas-based petrochemical project involving an investment of Rs 7,000 crore was ready and it would obtain the approval of the board in two months. This project would come up at Ambalamugal in the land to be purchased from Fertilisers and Chemicals Travancore Ltd (FACT) for which negotiations are on.

When asked about the possibility of FACT's participation in the equity of the petrochemical project, Mr Banerjee said, "not foreseen".

Since GAIL had entered into a Head of Agreement with National Thermal Power Corporation for supply of regassified LNG to its Kayamkulam plant, capacity of which would be raised to 2,300 MW from 350 MW in the next Plan, a 90-km sub-sea pipeline would be laid from Kochi to Kayamkulam at a cost of Rs 450 crore.

The third project is the laying of gas pipeline from here to Kannur, Coimbatore and Bangalore to take LNG from the Kochi terminal. The 900-km pipeline project would cost Rs 2,000 crore, he said.

Besides, it would enter into a joint venture partnership with Bharat Petroleum Corporation Ltd and Kerala State Industrial Development Corporation Ltd to supply natural gas for the vehicles and through pipelines to homes. GAIL's investment in this project would come to Rs 300 crore, Mr Banerjee said.

Speaking about the LNG terminal, Mr Dasgupta said the EPC contract for the terminal would be awarded soon. Petronethad pre-qualified four foreign companies as EPC contractors for setting up the terminal. They are: IHI Consortium, Japan, Technigas, France, Sofregaz, France/Italy and Tractebel of Belgium.

The work on the terminal would commence in next June and it would be completed in 36 months. The capacity of the terminal would be 5 million tonnes per annum instead of 2.5 mt proposed earlier. He said there exist an agreement with RasGas Qatar for supply of 7.5 mt of LNG for Dahej and Kochi terminals, while an agreement with Iran for the supply of an equal quantity by 2009-end was under finalisation.

Price bid for awarding the shipping contract for bringing gas to Kochi would be opened on October 3. The total cost of the terminal would come to Rs 2,300 crore, he said, adding with this the total investments of GAIL and PLL in the State during the 11th Plan would touch Rs 12,000 crore.

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