Petronet to commission Kochi gas terminal in August

Petronet LNG plans to commission Phase-I of the natural gas terminal at Kochi in August. Kethrapal, vice president of Petronet LNG, Kochi, told Business Standard though no official date had been fixed, they are sure about the launch in second half of August.

Work on the project in the southern end of Vypin island was completed in December last year and Petronet LNG had originally planned to commission the Rs 4200-crore terminal during March this year. However, due to a host of reasons it was postponed to June, but was not realised. AK Balyan, MD and CEO of Petronet LNG, said,"our customers were not ready to receive the gas, which led to the delay in commissioning of the project."

The pipeline, with a planned capacity of 5 mmtpa, is expected to handle 2.5 mmtpa in the beginning. Slow pace in laying the pipelines and marketing tie-ups had delayed the commissioning of the terminal, said the company.  

The 900-km section of the gas pipeline to Mangalore and Bangalore, involving an investment of Rs 3,400 crore, is now held up. Inadequate compensation has been the key issue in the case of land acquisition. While 505 km of the pipeline passes through Kerala, 310 km goes through Tamil Nadu and 85 km through Karnataka.

Public sector GAIL which is laying the pipeline from Kochi to Kootanad in Palakkad district and thereon to Bangalore and Mangalore, has managed to lay just 30 km due to resistance from the land owners in these districts.    However, Phase-I of the pipeline, involving 43 km in Kochi, has already been commissioned. On the marketing side, tie-ups have been entered into with seven major customers (Fertilizers and Chemicals Travancore, Travancore Cochin Chemicals, BSES/REL, Nita Gelatin, Hindustan Organic Chemicals and BPCL).

As their total annual requirement adds up to 350,000 tonne only, there is apprehension over the optimisation of capacity utilisation of the terminal in the near future.

The pre-commissioning work was completed in January. Construction of the terminal started in 2007 and it was originally scheduled to be commissioned in 2009-10. The company had signed an agreement with Exxon Mobil Corporation for supply of 1.5 mmtpa of LNG from the Gorgon LNG Project, Australia, on a long-term basis. It had also tied-up with RasGas, Qatar, for 7.5 mmtpa for a long-term contract.