Petronet LNG Ltd (PLL) is betting big on the completion of gas pipelines to Mangaluru from its Kochi terminal to enhance its business volumes.

The connectivity to Mangaluru is to be completed by the Gas Authority of India Ltd (GAIL) any time soon. This is expected to double PLL's capacity utilisation to 40-45 per cent from the current 20 per cent, said Yogananada Reddy, Chief General Manager and Vice President, PLL, Kochi terminal.

The ₹4,700-crore terminal in Kochi was languishing for a long time after its commissioning in 2013 and, it was last year, that the five-million tonne terminal operated at 20 per cent growth in capacity and achieved sales of one million tonnes per annum.

Reddy told BusinessLine that Mangalore Chemicals and Fertilisers has evinced interest in availing gas from Kochi once the 444-km pipelines are ready. Since Managaluru is a good consumption point for natural gas, he said companies such as MRPL, ONGC Mangalore Petrochemiclas Ltd (OMPL) and several other customers can take sizeable quantity of gas to meet their production requirements. However, the quantity of gas to be sold will be decided by GAIL, which is heading the marketing part.

PLL is also engaged in the supply of gas by road to PSU companies in Kerala such as HLL, KMML in the southern part of the State as well as for city gas distribution network. “We have recently entered into a contract with Saint Gobain in Chennai for the supply of 1,500 tonnes of gas up to December”, he said, adding that a pilot fishing boat conversion to LNG fuel with the support of KSIDC has also been taken up.

On the availability of gas, Reddy said there are no constraints right now as the company has entered into a long term contract with Exxon Mobile in Australia.

Delay in laying pipes

However, MP Sukumaran Nair, Director of Centre for Green Technology and Management has expressed concern over the undue delay in commissioning the pipeline without giving any valid reasons irrespective of the intervention by the Kerala Chief Minister. He said the project was conceived in 1998 and the delay in the completion of pipelines has resulted in a huge financial loss to the tune of ₹1-lakh crore by way of increased cost for alternative fuels such as naptha, furnace oil, and diesel for industrial production requirements. The delay was caused due to laying underground pipeline across Chandragiri River in Kasargodu. It is learnt that the work is yet to be completed, he added.

Sources in the BPCL, engaged in the road movement of natural gas to Chennai, also urged the Kerala Government to reduce the VAT rates for LNG presently charged at 14.5 per cent to get more customers. The VAT rate in neighbouring Tamil Nadu is only 5 per cent.