The Hindu Business Line : Kochi LNG terminal will be completed by Feb 2011

Project glance
Delay by 1 year unlikely to increase costs.
Petronet LNG-Gorgon Gas gas purchase agreement early next year.
Phase I of LNG project to have 2.5-mt capacity.
Bid package for EPC contract being revised.

Kochi June 24 The Kochi LNG terminal is to be completed by February 2011, the Union Minister for Petroleum and Natural Gas, Mr Murli Deora, said.

The delay by one year is not likely to increase the project cost of Rs 3,000 crore for the 2.5-million-tonne LNG project.

Addressing a press conference here, Mr Deora said that a gas purchase agreement would be signed between Petronet LNG Ltd (PLL) and Gorgon Gas of Australia during the early part of next year.

After this, a gas supply agreement would be signed with NTPC for supplying LNG to the Kayamkulam project around June 2008.

The first Phase of the LNG project would have a capacity of 2.5 million tonnes, which can later be expanded to 5 million tonnes.

GAIL PROJECT off

GAIL (India), meanwhile, has called off the Rs 7,000-crore petrochemical project, scheduled to come up in Kochi because the gas that is going to be brought to Kochi would be lean LPG with low content of ethane compounds to make the project viable.

The engineering, procurement and construction (EPC) contract for the LNG project, which was just about to be awarded, has been delayed because the soil requirement has been enhanced and now the bid package is being revised.

Issues sorted

Almost all outstanding issues have been sorted out with Kochi Port Trust, which has agreed to construct a road link to transport 250 truckloads of soil every day for filling and levelling the project site.

The port has also agreed to enhance the dredging facility and provide adequate draft to the ships coming in with LNG.

Most of the environmental problems that had confounded the Gorgon gas project have been resolved.

Ethanol plan

The country's ethanol programme, which envisages mixing five per cent of ethanol with petrol, would require 180 crore litres of ethanol.

The oil companies have signed contracts for procuring 84 crore litres, and six crore litres have already been blended with petrol.

Mr Deora said that the ethanol blend is an efficient fuel and produces less pollution.

However, there are several obstacles to be overcome since notifications are required from several States.

The inter-State import and export tax has also hindered the project.