Indian agriculture sector has been moving from one crisis to another, which is  evident  by the spate of farmer suicides during the last several years.

John Galbraith, a renowned  economist and former US ambassador of India said several years back, that Indian economy is largely dependent on performance of agriculture sector, which, in turn, is dependent on weather and seasonal conditions.

 Agricultural sector is  affected if  it rains too much or if there is drought. Though vulnerability of Indian agriculture sector to seasonal conditions are well known, during the last six decades of independent India, successive state and central governments have not been able to find solution adequately for this vexed issue confronting the Indian agriculture sector.

 Obviously, there is urgent need to stabilize the Indian agri economy and put it on firm rail, that would help in sustained economic and social growth, employment generation and equanimity of income and opportunities to a large extent.

 What is urgently needed is to make agricultural  operation more remunerative or atleast as remunerative as industrial operations and business in services sector.

 One obvious method of achieving this end is to promote large number of agro chemical projects in India, which would lead to the production of eco friendly products in a significant way and can also be substitute for petrochemicals(which are not adequately produced in India due to feedstock constraints or ecological issues). Unfortunately, no specially focused attention have been paid to boost the agro chemical projects in the country so far.

 Agro chemicals from tapioca, maize

 There are many agro chemicals that can be produced from tapioca or maize based starch such as sorbitol, L-lysine, lactic acid / poly lactic acid, citric acid and several others, which are not adequately produced in the country. India remains net importer of these starch based chemicals.

 Agro chemicals from castor seed

 India is a large producer of castor seed in the world and is largely exporting castor seed and castor oil without much  value addition. There are exciting possibilities of producing value added chemical products from castor seed including polymers that would be game changers for the Indian castor industry. China and Brazil, which are also large producers of castor seeds, are now focusing on such value added products from castor seeds.

 Agro chemicals from sugarcane

 India is a large producer of sugarcane and there are many sugarcane molasses based products that can be profitably produced including industrial ethanol, that can lead to several downstream products, which are petrochemical substitutes . Unfortunately, molasses are being converted largely into alcohol for human consumption.

 Algae based products

 Algae is very important and  quick growing crop, that can be cultivated in tropical conditions that are  prevalent in India. Algae cultivation needs only waste water, carbon dioxide and sunlight, which are all abundantly available in India. Several species of algae contain more than 35% of oil. Bio fuel can be produced from algae by extraction  from algae bio mass. Residual mass can be subjected to anaerobic digestion to produce methane gas (natural gas), which can be used for power generation. After anaerobic digestion, the remaining mass can be subjected to fermentation to produce ethyl alcohol and several ethyl alcohol derivative products. India is reported have more than 40 million hectares of waste land and algae can be cultivated in atleast two million hectares of waste land. Several integrated algae based projects can be set up in various parts of the country, that will significantly lead to all around development including improvement in rural economy.

Integrated algae based projects that involve cultivation of algae, production of bio fuel, setting up of power plant based on methane gas and production of ethyl alcohol can be promoted  atleast in  one hundred locations around India. Each of such integrated project with economic viability will  call for investment of around   Rs. 120 crores.

 So many opportunities

 There are so many other   attractive agro chemical investment opportunities, that remain to be utilised.

 Farmers need guidelines

 Indian farmers should be given  continuous guidelines  by government of India with  regard  to choice of crop they should cultivate to get maximum returns..  Such decisions are  now  taken by farmers  largely  as community decision at local level based on the views of senior members.  It would be appropriate if the Government of India would provide guidelines to the farmers in various parts of India from time to time about the choice of crop for cultivation based on demand supply forecast, price forecast, monsoon forecast etc. The policy of government of India with regard to the support mechanism for various crops can be evolved from time to time, with reference to the above forecast and guidelines.

 Need for pro active and appropriate approach

 Government of India should apply it’s mind to make Indian agriculture more broad based and more remunerative.

 Indian agri sector need innovative approach to sustain it’s growth and promotion of agro chemical projects is the best way of doing so. Government of India has a very important and significant role to play.


The recent accident in a tannery in Ranipet in Tamil Nadu resulting in the death of ten workers is yet another sad industrial accident that has taken place in Tamil Nadu.  Serious industrial accidents causing deaths  are now reported very frequently particularly in Virudhunagar  , Sivakasi region , where number of  fireworks and match units in unorganised sector are operating.

While the government routinely orders  an enquiry and arrest the factory owners in such cases, little news come out about the findings of the enquiry committee. In several cases, the factories are allowed to reopen after some time. Obviously, no lessons are being learnt and no actions are being taken to avoid recurrence of such accidents causing loss of lives.

All such industrial accidents take place due to the  non observance of  even minimum safety standards. The workers are rarely trained in safety measures and on many occasions are not provided the necessary safety uniforms and kits.   No accidents take place without reasons  such as non observance of safety rules. 

Industrial safety regulations are well standardised and have been carefully developed over the years. The government has also appointed number of regulatory and inspection agencies  and has strict code and reporting practices. There are number of government departments like electrical inspectorate, boiler inspectorate, factory inspectorate , health department , pollution control board etc., which are  duty bound to monitor closely happenings in the factories and ensure that the rules and procedures are adhered to.

While the factory managements who  fail in their commitment  to safety standards  resulting in such accidents are punished , the government officials are rarely asked to accept responsibility for non enforcement of regulations. Concerned senior officials at the level of secretaries rarely visit the factories for any surprise checks and to ensure that the government officials at lower level do the duties properly.

In the event of such accidents, the enforcement officials at  various levels should also be held responsible for the accidents and the present practice of the officials blaming everybody except themselves, should not be allowed to go on.  Just like the factory managements, the officials also need to be punished for failing in their enforcement procedures after  proper enquiry in quick time.

Obviously, if the enforcement would be strict and officials would do their duty as per the procedures efficiently and  honestly, the management of the factories will be much more careful and that would avoid such accidents and loss of innocent lives.


While the Government of  India is all the time stressing  that the pace of industrial and economic growth in the country should be accelerated, it is shocking that the inaction of the Government of India have forced the  three important urea fertilizer units in South India namely – Madras Fertilizers Ltd, (Chennai) Southern Petrochemical Industries Corporation (Tuticorin) and Mangalore Chemicals and Fertilizers Ltd (Mangalore) to remain closed since October 2014.

As the cost of production of urea from  naphtha is higher compared to that of natural gas as feed stock, Government of India insisted that subsidy would not be made available to the units that use naphtha as feedstock beyond September,2014. Out of 33 fertilizers units in India, the three naphtha-based urea manufacturers in south India  do not have linkage to gas grid and hence have to depend on naphtha for production of urea and ammonia. Therefore, the three units in South India were forced to stop operations, as they have no access to natural gas.

Helplessness of the units 

These three urea  fertilizer units have already  made considerable investment to convert their facilities for using natural gas as feedstock instead of naphtha. Now, the units are in a position to switch over to production of urea based on natural gas as feedstock.

However, due to delay in the completion of natural gas pipeline and  non availability of natural gas, these units are unable to switch over to natural gas as feedstock. While the rest of the fertilizer firms in the country have access to natural gas, these three firms in South India are unlikely to get natural gas till 2018.

What is particularly surprising is the fact that inspite of knowing very well that there is no feasibility for getting natural gas by these units in the immediate future, the Government of India has given a time bound schedule to switch over to natural gas, particularly when  the situation is beyond the control of these units.

In the case of Madras Fertilisers and SPIC Ltd in Tamil Nadu, there is no way of getting natural gas in the next few years. Krishna Godavari basin in Andhra Pradesh is unable to step up the production of natural gas. Pipeline for transporting natural gas to Tamil Nadu from Andhra Pradesh are also not ready. Kochi LNG terminal is now remaining stranded due to suspension of  gas pipeline project in Tamil Nadu by GAIL authorities. Proposed Ennore LNG terminal in Tamil Nadu remains only in the preliminary stage. In this situation,  insisting that these South India based urea fertilizer units should  switch over  to natural gas as feedstock is unreal and ironical.

Price of naphtha and government’s advice

The export price of naphtha had dipped to Rs.39,000 per metric tonne from Rs.57,000 per metric tonne due to crude price fall.  The import parity price is about Rs.45,000 per metric tonne.

Urea fertiliser  units in south India have been paying around Rs.60,000  per metric  tonne of naphtha  earlier. Due to the price fall of naphtha, there is scope for reducing the price of naphtha supplied to the fertiliser units by naphtha producing companies in India.

Even as the price of naphtha has come down, the Petroleum Ministry appears to be moving at snail’s pace and reported to have  sent a communication to these three firms in South India  to finalise the naphtha price and other terms and conditions with the naphtha producers, to enable the units to avail subsidy and restart the operations  It is also reported to be insisting on new conditions such that the state government should forego VAT for naphtha.  Even as the government of India is endlessly deliberating about the matter, the units remain closed causing loss of several crores of rupees of production. The lack of sense of urgency on the part of government of India in solving this issue is too conspicuous to be ignored.

It is sad that instead of enabling the units to continue operations without closure earlier  by not withdrawing the subsidy, the government of India has done nothing to help these units beyond advising them now. Such closures have become costly both for the units and the country and Government of India is solely responsible for this.

Indian urea scenario :

Indian demand for urea:    Around 30 million metric tonne per annum

Indian production:                               Around 22 million metric tonne


Year Import Production
Million metric tonne
2010-2011 6.610 21.120
2011-2012 7.834 21.872
2012-2013 8.04 21.99
2013-2014 7.08


India is a large consumer of urea and Indian import of urea is around  8 million metric tonne per annum. Realising the need to increase the production capacity of urea in the country, the Government of India is taking special steps to bring back Talcher  urea plant of Fertiliser Corporation of India back into operation, with the proposed investment of around  Rs. 8000 crores

At the same time, paradoxically, Government of India appears to be unconcerned as for as the three fertilizer units in South India are concerned which are now remaining closed.

It takes three to four years to conceive, design, install and commission a new  urea project. While it takes such a long time to implement a new project, closing down the existing fertilizer units can be done by a stroke of pen, simply by a bureaucratic decision , as has happened in the case of the three urea units in south India.

The damage has been done.

Installed Capacity of the units not in operation in south India

Name of the unit Installed Capacity

(metric tonne)

Madras Fertilisers 4,86000
SPIC 620000
Mangalore Chemicals & Fertilisers 3,79,500


The damage has already been done, as the three urea units remain shut down for over three months now. Workers are remaining idle and thousands of tonne of urea production from these three units have been lost, even as the country is spending millions of dollars in importing large volume of urea year after year.

While the fact is that the cost of production of urea from naphtha is higher than that of natural gas as feed stock and the subsidy expenses  to the  government of India payable to the naphtha based units are higher, the overall cost to the country due to the closure of the well run urea units in south India is very high. Obviously, the government of India had withdrawn the subsidy support to the naphtha based units without conducting an adequate cost benefit analysis.  The present  government  of India has erred by creating a situation where the urea units in south India had to remain closed for over three months now and even at present there is no  firm indication as to when they would be restarted and what would be the subsidy policy of the government of India towards them.

Better late than never and without allowing the units to remain closed for more period , that would cause the units to become sick making the revival difficult, the government should act without losing a day more.


Nandini Chemical Journal, a renowned online monthly journal published from Chennai by a team of chemical engineers announces  All India Essay Competition for college students on Value Added Products for production from Sewage / Municipal Solid Waste.

The Prime Minister’s call for Clean India Campaign has created a flurry of activities in the country towards achieving cleanliness in public places. There is urgent need to identify the appropriate value added products and suitable technology for manufacturing.

Nandini Chemical Journal is organizing the above All India competition, to give opportunities to college students all over India to study the subject in depth and provide their views and suggestions and recommendations.

All students studying   in Indian universities  at under graduate, post graduate and doctoral level  can participate in the essay competition. The essay should consist of maximum of 2000 words and should be written in English.  Five prizes would be awarded  to the best of entries.

Last date  & address details:Last date for submission of essay is 30th December, 2014.  Essay should be sent either by post or email to the following address

Nandini Chemical Journal, M 60/1, 4th Cross Street, Besant Nagar,


Email:- ,

If you want complimentary copy of Nandini Chemical Journal, please let us know.


The lighter grades of crude oil produce the best yields  of end products. However, lighter grades of crude are fast depleting in the world.

Depletion of light oil reserves are shifting the focus of the oil industry towards heavy crude oil.

Oil refineries are increasingly having to process heavy and ultra heavy crude.

Heavier crude oil have too much carbon and not enough hydrogen. Processing of heavy crude oil requires high capital cost, operating cost and results in harmful emission. Existing processing technologies do not effectively address the issue.

Oil industry has been eagerly awaiting emergence of new innovative and cost effective technologies for processing heavier crude oil.

Pristec, an innovation based global company is offering technology solution to convert heavy crude into light synthetic crude.

Mr. P.N.Devarajan, a renowned chemical engineer of great repute has stressed the need for India adopting cold cracking technology to process heavy crude oil immediately.  For more details, please read Nandini Chemical Journal, December 2014 issue.


Mr. Warren M. Anderson , former Chairman of Union Carbide Corporation was in charge when the toxic gas in the pesticide plant of Union Carbide at Bhopal in India  leaked out in 1984. This accident resulted in death of hundreds of persons and  is considered as one of the worst industrial accidents in the world.  Mr. Anderson died unsung and unheard on September 29,2014 in USA at the age of 92.

Mr.. Anderson  visited the site of accident at Bhopal in India  from USA  within  four days from the date of accident  and he was immediately arrested in India . Later on, he was released on bail and was allowed to leave India.   Union Carbide  paid 470 million USD to Government of India   to compensate the victims who suffered in the accident. The case took place in USA for prolonged period .  However,  the environmental activists in India and the Government of India were not satisfied with the compensation  amount   paid. The government of India wanted to extradite Mr. Anderson and went to the extent of calling  him a fugitive . Political parties, activists and Indian media liberally heaped abuse on Mr. Anderson and called him as absconder, criminal and murderer.

Now that Mr. Anderson has died at the ripe age after spending several years almost in isolation in USA, it is time to introspect  as to whether Mr. Anderson sinned or was sinned against. Perhaps, history will be more kind to him than the government of India and Indian media.

The accident that took place in Bhopal was an extremely sad event, which caused  death of 3787 persons  as per the statistics of Government of India. Most of the persons who died belonged to lower income group and many others suffered heavily and died later on due to the after effects of inhaling  toxic gas.  While this was an extremely disturbing event , the question is as to whether it would be appropriate  to call Mr. Anderson as murderer and criminal  for this accident.

It would be justified  to call a person as criminal or murderer if he had carried out the heinous act wilfully and deliberately. This was not the case in the case of Mr. Anderson.   While , no doubt, Mr. Anderson was the Chief of Union Carbide Corporation at the time of accident, the accident was not due to him but in spite of him. He was staying in USA at the time of accident   and the plant was operated  not by Mr. Anderson  personally but by the executives in India who were  Indians.  The detailed enquiry later on revealed that it was an accident,  perhaps caused by inadequate maintenance management and poor shop floor practices.

Hundreds of accidents have taken place in the world in various areas and all such accidents take place due to lack of care and inadequate safety precautions..  No accidents take place anywhere without reasons.  India is no exception to this. As a matter of fact, the number of industrial accidents that take place in countries like India and China are far more than the accidents taking place in other countries.  The coal mine accidents in China are too many and too frequent resulting in death of many persons. Such coal mine accidents have taken place in India also,  apart from rail accidents and accidents in the fireworks factories in states like Tamil Nadu etc.,  which have also resulted in the death of workers , most of whom are poor and belong  to deprived section of society.  While enquiries take place after such accidents and causes are fixed, it is not the practice to call the chief executive  of these establishments as criminals. Why make an exception for Mr. Anderson ?

It is not the intention to say that Union Carbide was not guilty .The  fact was that the company accepted the responsibility and paid compensation,  though it was not to the satisfaction of government of India  and activists in India.  The quantity of compensation was a matter  to be settled in courts. India is unhappy that Mr. Anderson could not be extradited to face trial in India. The fact was that the US government refused to entertain such request  for extradition as per the US law.

While  government of India and the activists  in India are entitled  to take the view  that Union Carbide (now Dow Chemical ) has been unfair to the victims and did not act responsibly , it would be incorrect to hold Mr. Anderson personally responsible.  Mr. Anderson as an individual was different from Union Carbide . After all, in 1986 at the age of 65, Mr. Anderson retired from Union  Carbide and had nothing to do with the company after his retirement.

The emphasis  stressed in  this article is only to  disapprove the practice of Indian government, Indian media and activists to call Mr. Anderson as criminal . Mr. Anderson  must have spent his 27 years of life after retirement in sorrow , regret and anguish for the accident that killed innocent people while he was in charge of Union Carbide along with thousands of others in the company all over the world and several  colleagues  in India.


It is gratifying to note that the government of India has announced signing of an initial agreement for setting up joint venture firm for setting up off shore wind power project in Gujarat. This is a very significant move of the government of India with far reaching implications for the better. But, it is surprising that such off shore wind power project has not been considered for Tamil Nadu.

With the domestic production of coal  and natural gas falling short of national requirements and India now emerging  as large importer of coal, crude oil and natural gas in the world, the fuel source for power projects has become a matter of great concern. Several power projects are now stranded due to want of natural gas and many power units are operating below capacity due to the coal stock position in the plant premises remaining at critical level. The price of such  fuel  are also subjected to frequent fluctuations creating an element of uncertainty in the economics of operating the thermal power projects.

Under the circumstances, it is now well recognised that India has to considerably use renewable energy as source of power generation. Government  of India has fixed the target as around 20,000 MW of solar power by 2022 and considering the present progress in the solar power front, it is extremely doubtful as to whether such target would be achieved.

In such scenario, off shore wind power project represents an ideal and appropriate option for India. India is blessed with long coastal line of around 7500 KM covering several states, providing excellent opportunity for setting up off shore power projects.

Europe has already shown the way  by building several off shore wind power projects with the present capacity of around 5500 MW already in operation. European Union has set the target of constructing off shore wind power projects of capacity one lakh megawatt in the next ten years and is forging ahead with this plan. The technology for the off shore  power project is now well established and  now only need to be appropriately schemed in tune with the Indian coastal conditions.

Off shore wind power projects offer several advantages compared to the on shore wind power projects. Apart from the fact that the wind speed in off shore is much higher , the availability of wind throughout the year is also assured. As against this, on shore wind power projects operate at optimum capacity levels hardly for four months in a year. The cost of off shore wind power project is likely to be one and half times more than that of on shore wind power project of same capacity . However, in view of the better wind speed  and wind availability, the economics of off shore wind power project would be better.

In Gujarat state , government of India has now announced  demonstration off shore wind power project of capacity of around 100 MW. While  the concept of installing demonstration project is appropriate in view of lack of similar project in India so far, the government of India ought to have announced such demonstration project in Tamil Nadu also, which has appropriate coastal areas such as  in Tuticorin.  Since there may be variable coastal conditions in different locations, it is necessary to set up such demonstration plants in Tamil Nadu also  to establish the design and operating parameters and set up larger capacity projects later on.

As a matter of fact, today there is greater need for off shore wind power projects in Tamil Nadu, which is  passing through severe power shortage scenario compared to Gujarat state. There is little time to lose and Tamil Nadu  should not be made to wait till the completion and commissioning of the demonstration project in Gujarat , for taking up off shore wind power project in the state.


Till now, the country has been largely focussing on garlanding Mahatma Gandhi’s statue and singing bhajans on Gandhi Jayanthi Day throughout the country. By launching clean India campaign on Gandhi Jayanthi Day, Mr. Narendra Modi has certainly given a new purpose for this national  celebration.  However, declaring an objective and goal must be matched by  strategic action plans to achieve the end results  in tune with the ground realities.  Apart from urging the country men to work atleast two hours a week for the cleaning campaign, Mr. Modi has not taken the country men  into confidence yet as to how he would execute this national campaign to lead to the logical end.

Many people, who  would strive to keep their households , office premises and surroundings clean by carefully collecting the wastes and dumping it into the  bins provided nearby by the civic authorities , would wonder as to how such waste material would ultimately be handled . The problem confronting the country today is the lack of adequate waste treatment and disposal facilities in an optimum manner. In the absence of such facilities, the present situation of  the waste collected in one area being  transported  to some centralised dump yard, that remain there or being burnt in crude manner would continue , causing pollution around. The immediate case study is the Perungudi and Kodungaiyur  dump yards in Chennai  city , where one can see the condition of the dumped waste, emanating  nauseating smell around and remaining as  breeding ground for mosquitoes, apart from being an eyesore.

Even while launching this clean India campaign, the  government of India ought to have asked the state governments and local municipal bodies all over India about their plans for treating the municipal solid waste and sludge in optimum manner and the investments required and the time schedules to implement the scheme. While some isolated schemes have been launched in the country, there is no indication that such steps have been taken in all nooks and corners of India. In such circumstances, there is the threat of the clean India campaign ultimately proving to be a non starter and such situation should be avoided.

There are several technologies available for treating the municipal solid waste materials and sludge in an eco friendly manner and even with an element of profitability.

Of course,  the obvious method is to use the combustible solid waste material  as fuel for power generation in small power plants located near the centralised dump yards. Such schemes have been under discussion by Chennai  Corporation  for many years now.

The solid waste materials can also be subjected to composting and fermentation for generation of biomass, which can be used as organic manure for agricultural operations.

The fermentation of solid waste materials can lead to the production of important and value added chemicals . For example, plants are now in operation abroad for producing  synthetic gas mainly consisting of carbon monoxide and hydrogen, by municipal solid waste sludge gasification process and the synthesis gas in turn is converted into methanol. India imports  around one million tonne of methanol per annum and the municipal solid sludge can be an excellent source for the production  of methanol.

Using sewage water, algae crop can be cultivated and algae is an excellent source for generation of bio fuel as well as  methane gas for power generation and ethyl alcohol, by subjecting algae bio mass to  anaeorobic digestion and  fermentation.

There are several other possibilities such as recycling of the waste materials to useful products. For example, the plastic waste materials can be recycled   by converting  them into plastic  granules for reuse.

Converting sewage water by treating them into useful water is a well proven technology and already plants are in operation at Manali in Chennai and other cities.

Technologies for treatment of municipal solid waste are well developed around the world and what is needed is proper systems for collecting the wastes , segregating them and treating them usefully in tune with the local conditions in different places.

Asking the country men to involve themselves in cleaning everywhere without providing facilities for treating the waste materials or converting  them into useful products may be viewed as similar  to the act of putting the cart before the horse.

Certainly, government of India would  be aware of the various possibilities. The clean India campaign would be more assured of success if the government had taken an integrated approach, without giving an impression that it is launching this  campaign in a hurry.


Indian Oil Corporation  (IOC), plans to set up another liquefied natural gas (LNG) terminal on the country’s eastern coast. IOC said in its annual report 2014-15 that “to meet the gas requirement of upcoming Paradeep refinery and other potential customers, setting up  LNG terminal is under consideration at eastern coast in near future”.

In eastern coast, Petronet LNG has also announced that Petronet LNG Ltd. and Gangavaram port signed a firm and binding agreement for developing a land based LNG terminal at Gangavaram Port, Andhra Pradesh with capacity of 5 million metric tonne per annum.

IOC is also currently setting up its 5  million metric tonne per annum LNG terminal at Ennore near Chennai for import, storage and regasification of LNG. The terminal, which is being developed at cost of around Rs 4,500 crore, is targeted to be completed by 2015-16. However, the project is likely to be delayed further, considering the present pace of progress.

Proposed LNG terminal at Mangalore

Oil & Natural Gas Corporation  (ONGC) and its partners Mitsui of Japan and Bharat Petroleum Corporation Ltd ( BPCL )have signed an agreement to conduct feasibility study for  setting up 500-750 million US$ LNG import terminal at Mangalore. Of initial capacity of 2-3 million metric tone per annum, which can be expanded to 5 million metric tonne per annum later.

The following is the LNG terminal capacity for the projects that are operating or firmly under implementation. The above new proposed projects at Gangavaram,  Mangalore  and the  proposed project of IOC in east coast are  in the preliminary stage.

LNG terminal capacity (In MMSCMD)

LNG terminal 2012-13 2013-14 2014-15 2015-16 2016-17
Dahej 10 12.5 12.5 15 15
HLPL Hazira 3.6 5 5 7.50 10
Dabhol 1.2 5 5 5 5
Kochi 5 5 5 5 5
Ennore 0 0 0 0 0
Mundra 0 0 0 5 5
East Coast(Gangavaram) - - - - 5
Total capacity (MMTPA) 19.80 27.50 27.50 37.5 50


Kochi LNG terminal

LNG terminal  built at Kochi in Kerala, which was  commissioned after several years of delay, is now facing distress scenario.

Around Rs.4000 crores  was spent on building this LNG terminal. Due to lack of pipeline connectivity, the terminal’s capacity utilisation is merely 1.4 percent.  Only 0.66 trillion British thermal units of natural gas is  regasified and was sold from the terminal during the first quarter of fiscal 2014-15. The gas was sold to the Kochi refinery.

The terminal is now operating at very low capacity utilization level, due to delay in implementation of pipeline project  that would take the gas to Kerala ,Tamil Nadu and Karnataka. The Tamil Nadu  government appears to be  remaining unconcerned about the delay in the pipeline project in the state  due to agitation by farmers which would result in the  loss of investment opportunities for setting up several gas based projects, that may involve in investment of more than Rs.15000 crores and providing significant economic benefits for the region. No worthwhile efforts have been made to find amicable solution to the project for laying pipeline in Tamil Nadu.

Now, the helpless management of the Kochi LNG terminal is planning to rent out the terminal  as a storage  facility for international LNG players!

How many more LNG terminals?

India is becoming increasingly dependent on import of natural gas for its requirement and LNG terminals are being planned or built with the objective of facilitating the import of natural gas to meet  India’s future needs.

However, the fact is that no clear cut plans have been evolved as to what extent the import of natural gas  should increase in India in future and whether so many LNG terminals would be necessary .

Extensive and increasing dependence on natural gas import may expose Indian  consuming sector to uncertain situations in future, from the point of view of availability, cost and delivered price. Such huge import of natural gas may also disturb the current account financial scenario in the country.

New LNG terminal  projects are being announced by the companies , without their decisions being coordinated and guided by Government of India.

Since LNG terminals are highly capital intensive projects  and take long years for implementation, investment in LNG terminals should be planned with clarity and based on India’s long term natural gas import strategies. It appears that no such strategies exist at present.


It is highly disturbing to know that around 25% of power  capacities in Gujarat  (a reasonably well administered state ) have to be shut in recent days  due to non availability of coal. This is more than a quarter of the state’s total installed  capacity of 18,510 MW  . Such power shortage constitute around 7563  MW ,which is an alarming level.

It is well known that most of the power projects in India have been operating with low coal inventory and sometimes as low as  2 to 3 days of the requirement. Such conditions  have forced many power plants to operate at low capacity utilisation level to ensure that the  thermal plants will be  kept running until fresh arrival of coal.

Though India has  large reserves of coal deposits, India  is importing around   110 million tonne of coal every year and the import level is likely to go up in the coming years , since there is no feasibility of substantially increasing the production of coal in the next one or two years. The international price of coal is also increasing due to the robust global demand.

The Union Power Minister has correctly observed that the only solution for the problem is to open more coal mines  and improve efficiency in the existing ones  as early as possible. This calls for  significant improvement in  managerial  and technological  efficiency  in Coal India .

Dubious allotment of coal blocks

While the earlier Manmohan  Singh government anticipated this problem  of impending coal shortage  and took steps to award number of new coal blocks to expedite opening of new mines and increase coal production, the entire plans came to nought as the procedure for coal allocation was not done in a transparent manner and many undeserving organisations and individuals secured allotment of coal blocks due to political connections , involving  corruption.  Many of the coal block allotees did not even commence the work  and probably were  scheming to mint money by selling the coal block itself  at high margins by circumventing the law.

To this extent, Manmohan  Singh should accept responsibility for the present precarious coal scenario faced by the country. Now, there is no doubt that Narendra Modi government is facing an extremely critical coal scenario and it remains to be seen as to how it would tackle this grim situation.

To add to the uncertainty, Supreme Court has now observed that allotment of several coal blocks in the past  were illegal.

Poor capacity utilisation of power plants :

During the last several  years, there has been emphasis in the country on building power capacity . However, there have not been equal emphasis on operating the existing power plants at optimum capacity utilisation level and avoiding loss of power in transmission etc. Apart from the  coal shortage as a reason , the power production in the past have also been curtailed due to frequent breakdowns in the power plants due to poor maintenance practices.

The power ministry should immediately set up a task force to study the state of power plants in India and assess their overall performance efficiency in the last two or three years in comparison with the established international standards. Such careful study would reveal many disturbing facts with regard to operating efficiency and perhaps enable the government to learn one or two lessons to work out the future course of action.

Options of off shore wind power and algae bio fuel :

While striving to  sort out the complex issues due to lack of availability of coal stock for running power plants, Narendra Modi government should work very fast in utilising the potentials of the non conventional  energy source. While the government is talking about the  importance of solar power though the pace of progress at ground level  is still inadequate, it is sad that it is ignoring the huge potentials of off shore wind power projects in India. Europe has taken a big lead in this field  and India can emulate the initiatives of Europe, particularly since India has long coastal belt. While the developed countries are working at feverish pitch to produce algae bio fuel that can be used for power generation, India’s efforts in this direction are very poor.

It is good that the departments of coal , power and renewable energy have been brought under one ministry. The minister has a great opportunity to take an integrated look at the option of coal vis a vis  renewable energy and forge ahead  to fulfil the needs of the time.