RIL in talks with Kochi Port, plans terminal

Mukesh Ambani controlled Reliance Industries is in talks with Kochi Port for setting up an international bunkering terminal to supply fuel for vessels.

The proposed terminal will be located in Puthuvypeen area, that has notified as port-based special economic zone (SEZ) by central government recently.

The terminal would have capacity of one million tonne and would reach five million tonne by second phase of development. Besides Reliance Industries, public sector oil companies and Indian Molases are also keen on developing bunkering terminal at Kochi Port.

Kochi Port Deputy Chairman Capt Subhash Kumar confirmed the development adding "oil majors of Fujairah also have shown their interest in bunkering terminal at Kochi Port."

The investment details for the proposed the terminal has not yet finalised. Currently, Adani Exports and small players are in the process of setting up of bunkering facilities in addition to oil PSUs.

Reliance Industries has already forayed into Aviation Turbine Fuel (ATF) supply business by bagging fuel service contract at GMR Hyderabad International Airport (GHIAL) and is also planning to set up 25 ATF stations across the country.

The company is also waiting for exemption of Value Added Tax (VAT) by Kerala state government for bunkers sold at terminal.

"Though bunkers will be exempted from others taxes as it will be located in SEZ, the state has insisted on paying VAT on bunkers. The last state budget has promised that state would exempt VAT. We are yet hear from Kerala state," a source said.

Reliance, if secures licence for terminal, will have to acquire small boats to supply fuels.

At present vessels on international voyage use Fuhairah, Singapore and Colombo as main ports for filling bunker.

"An international bunkering terminal at Kochi makes sense as it is on the international shipping route.

Kochi Port is just 11 nautical miles away from the maritime highway connecting Gulf to the Far East and Australia," industry analysts said.

Vessels calling Indian west coast ports used to divert to Fujairah for filling fuel. "For this ships will have to spend additional 12 hours, that will cost them anywhere between $15,000 to $20,000. Moreover, if a ship is filling 1,000 tonne of bunker, it will have load 1,000 tonne of cargo less," analysts added.

Earlier, Kochi Port was planning to offer bunker to vessels calling at port. It had invited Expression of Interest (EoI) and later dropped.

"Now, the idea is to offer fuel to vessels on international voyage. With this, there will be more demand for water, food, provision and other materials apart from bunker," a port official said.