The Hindu Business Line : LNG terminal: Kerala MPs seek Deora’s intervention

Kochi, Nov. 22 MPs from Kerala have sought immediate intervention of the Union Minister for Petroleum and Natural Gas, Mr Murali Deora, to clear the deadlock over commencement of construction of the Petronet LNG Ltd’s (PLL) terminal at Kochi.

In a memorandum to the Union Minister, the MPs said that way back in 1998 proposals were considered and adopted to set up a LNG terminal in Kochi to ease the problem of high cost of feedstock and energy inputs, which severely hampered further industrialisation of the State, according to Mr Chandran Pillai, MP (Rajya Sabha).

The indecision regarding the sourcing of LNG has delayed the construction for the past several years and on this account the State has lost a tremendous opportunity for another era of industrialisation, the MPs said.

Bright prospects

The proposed LNG terminal will provide natural gas (mostly methane CH4) — a cheap, environment friendly feedstock and energy source — to the industries and households.

Compared with the cost of currently available fuels such as naphtha ($18 per million British Thermal Unit) and fuel oil ($12 per million BTU), natural gas is priced at $3.5- 4.5 per million BTU, available along the Hazira-Bijapur-Jagadishpur pipeline and on the Godavari basin, they said. With natural gas becoming available, the fate of many of the manufacturing industries in the State, who are at a disadvantageous position due to unaffordable feedstock and fuel cost — Fertilizers And Chemicals Travancore (FACT) Ltd, National Thermal Power Corporation (NTPC) Kayamkulam, Bombay Suburban Electric Supply (BSES) Eloor, Hindaloco Ltd, Cements Group, Excel Glasses, Power producers etc — will become bright. New ventures in petrochemicals, power generation, mineral extraction, chemical processing etc. may also prosper.

Considering the above potential, the LNG terminal at Puthu Vypin in Kochi was proposed over six years ago by the PLL – a joint venture of National Oil companies (IOC, BPCL, GAIL, ONGC) and foreign partners (Gaz de France, Ras Gas) in the gas business, the MPs said.

Dahej Vs Kochi

It was proposed along with the Dahej LNG terminal in Gujarat at the same time.

During 1998, the Kerala State Industrial Development Corporation was identified as the nodal agency to work with GAIL to promote the LNG terminal.

Allocation of 38 hectares of land from Cochin Port Trust and over 40 clearances from different agencies were obtained and more than Rs 30 crore was spent by the PLL.

There was a time when many thought that the Cochin terminal would be commissioned first. But, the Dahej terminal was commissioned in 2003 with an initial capacity of 2.5 MMTPA and regular supply of natural gas to power, fertiliser and other energy consumers has commenced. Currently, its capacity quadrupled and is expanding further.

‘Urgent need’

“The fate of Cochin Terminal even now remains uncertain as to when the construction works are scheduled to begin and when it will be completed,” they said.

Therefore, they told the Minister, there is an urgent need that the Union Ministry of Petroleum and Natural Gas “shall immediately intervene to sort out all factors contributing to the indecision and delay and commence the zero date for the construction of the terminal without any further delay”.

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