With GAIL pipeline in place, Petronet LNG eyes higher capacity utilisation in Kochi

With the natural gas pipeline of GAIL reaching Mangaluru, Petronet LNG Ltd is expecting a 30-40 per cent increase in capacity utilisation at its ₹4,700-crore terminal in Kochi in the next two-three months.

“Right now, our capacity utilisation is 20 per cent (less than 1.5 million tonnes). And this will go up once more companies start using natural gas for their production requirements,” said Yogananda Reddy, Chief General Manager and Vice President, PLL Kochi Terminal.

The terminal has a capacity of five million tonnes and the plant is ready to meet any demand from industrial consumers from the northern part of the State, he told BusinessLine. Once the city gas distribution (CGD) network expands to these regions, there would be more customers, he said.

Also read: GAIL completes much-delayed Kochi-Mangaluru natural gas pipeline

Mangalore Chemicals and Fertilisers, ONGC Mangalore Petrochemicals Ltd (OMPL), and MRPL are some of the major consumers who have shown interest in availing gas that would materialise soon after completion of all technical works in this regard, he added.

Sources in BPCL, which engaged in the road movement of natural gas from Kochi, said that ISRO Thirunelveli, Turbo Engineering, Chennai, Inox Air Products, Bhurka Gas Bengaluru have started taking gas. However, the company is batting for a uniform VAT rate for LNG, as Kerala charges 14.5 per cent against 5 per cent in Tamil Nadu.

MP Sukumaran Nair, Director of the Kochi-based Centre for Green Technology and Management, said that the Kerala Government should popularise the use of natural gas for industrial applications, and also encourage prospective investors to start new ventures using gas, envisioning a progressive gas utilisation plan for the State.

The targeted CGD coverage is not progressing fast as the Indian Oil Adani Gas Pvt Ltd (IOAGPL) ― which bagged the CGD rights in 2015 ― could complete only a few gas stations and household connections in Ernakulam. The government should encourage the company to form local-level associate firms who could take up gas distribution for between 1,000-5,000 customers, he said.

Also read: GAIL to invest over Rs 45,000 cr to create infra for gas-based economy

However, industry sources pointed out that IOAGPL is reported to be going ahead with its plans to create a green corridor from Ernakulam to Kasargodu by setting up CNG stations as part of the CGD network. In the first phase, 70 stations will be set up by March next year and another 100 in the next five years.

According to Nair, the Centre proposes to transform the primary energy consumption in the country predominantly towards natural gas, and in the coming decade, natural gas will become a household fuel and also the primary energy source for the manufacturing sector.