Petronet's Kochi terminal delayed again

Petronet's upcoming liquefied natural gas (LNG) terminal in Kochi is facing delay again. The terminal is now scheduled to be commissioned in late 2011. It was expected to be ready by June 2010 after missing the deadline of 2009-end.

The postponement is due to the delay in signing of the concession agreement between Petronet LNG and the Kochi Port Trust.

Confirming the development, Petronet's Managing Director and Chief Executive Officer Prasad Dasgupta, said, "The Kochi Port Trust had delayed signing of the concession agreement. However, things have been finalised now and the agreement has moved to the ministry of shipping for approval."

The late commissioning of the LNG terminal will have a direct impact on NTPC's 350 mw power plant in Kayamkulam in Kerala's Alapuzha district, around 100 km south from the proposed terminal.

"With NTPC being the only certain and major anchor customer because of its power plant in the region, it will have to postpone its operations too. Both the projects have to be synchronised to begin operation," said a Delhi-based analyst.

Petronet's Kochi terminal, which will be the country's fourth LNG terminal, will handle a capacity of 5 million tonnes per annum of LNG.

Currently, there are two functioning LNG terminals in Gujarat "" the 6.5 million tonnes per annum (mtpa) Petronet terminal and the 2.5 mtpa Shell terminal. The third terminal is coming up in Dabhol in Maharshtra.

The engineering, procurement and construction (EPC) contract for the Rs 2,500 crore Kochi terminal has been awarded to Japan-based Ishikawajima-Harima Heavy Industries (IHI). "We have awarded the contract and it will take 42 months to complete the project," said Dasgupta.

Four state-run energy firms "" Oil and Natural Gas Corporation (ONGC) , GAIL, Indian Oil Corporation (IOC) and Bharat Petroleum Corporation (BPCL) "" together hold 50 per cent in Petronet. Gaz de France owns 10 per cent, with the remaining 40 per cent is held by public and institutional investors.