Kochi LNG terminal to go on stream by year-end

The liquefied natural gas terminal of Petronet LNG at Kochi is likely to be commissioned by the year-end. The terminal, the company's second such facility after Dahej in Gujarat, is located on the shore at Puthuvype, near here.

More than 95 per cent of the project is complete, said a company source. “We are ready with all facilities and the commissioning might be in November or December,” he added.

The first phase of the Rs 4,600-crore project will have a capacity to handle 2.5 million tonnes (mt) per annum and when fully commissioned this will be raised to 5 mt.

The Kochi terminal will initially operate at a rate of 0.50-0.75 mt for a year. The company has planned to raise the total handling capacity to 15 mt by 2014, including 10 mt at the Dahej unit.

LNG storage tanks, electricity generators and pipelines from the outer sea, and other facilities are now ready, the source said.

LNG will be brought to the terminal from Australia and other places in specialised vessels and stored at the terminal. This will be distributed through pipelines to various locations like Kochi, Coimbatore and Mangalore. For companies like FACT, which fall within a radius of 50 km, it would be supplied through pipelines or tankers, initially. Talks are also on to have contracts with various companies and NTPC’s unit at Kayamkulam for supplying LNG from here.

However, issues on the pricing of the gas are still to be sorted out. Petronet is keen on a tag of $16 per million metric British thermal unit (MMBTU) but user industries like FACT and the Kerala government want the same rate applicable to companies in the north.

The greenfield terminal is coming up on 33.4 hectares, leased by the Cochin Port Trust. GAIL (India) is laying a 1,156-km long pipeline at a cost of Rs 3,263 crore. The first phase of the pipeline, covering 44 km to cater to the industrial belt around Kochi, is expected to be commissioned by the year-end. In the second phase, the pipeline will be extended to Mangalore and Bangalore, for industries in the proposed Kochi-Coimbatore industrial corridor.

Besides, a 120-km long Kochi-Kayamkulam sub-sea pipeline will also be laid to supply gas to the Kayamkulam plant of NTPC.

The company also plans to distribute gas to household consumers in and around Kochi. The Kerala State Industrial Development Corporation (KSIDC) in September last year had signed a shareholders/promoters agreement with GAIL Gas Limited, a fully-owned subsidiary of GAIL, for setting up Rs 1,000-crore gas-based infrastructure projects in the state. The new company Kerala Gail Gas Limited will take up city gas distribution.

KSIDC is associating with GAIL for setting up a gas trunk pipeline for supplying re-gasified LNG in Kerala from Petronet.