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It is very unfortunate the proposed LNG terminal at Kochi in Kerala has been facing several hurdles, which have indefinitely delayed the project.
Amongst many LNG project proposals in India , only two LNG terminal projects made some progress. One is at Dahej in Gujarat and other one at Kochi in Kerala.
While Dahej Project of Petronet in Gujarat would be commissioned shortly, LNG terminal at Kochi is facing high level of uncertainty.
LNG terminal at Kochi is absolutely necessary to sustain industrial growth in southern states particularly Kerala, Karnataka and Tamil Nadu.
In the past, it has been repeatedly said that Northern and Western India have greater advantage in industrialisation due to availability of Natural Gas from Bombay High which could not be made available to Southern states.
At one stage, a proposal to set up Southern Gas Grid was actively considered, to transport Natural Gas from Bombay High to Southern States.
It was expected that Kochi LNG terminal would help the Southern states considerably.
While the Natural Gas is available in southern states in Cauveri Basin in Pondicherry and Krishna - Godavari Basin in Andhra Pradesh, there have been inordinate delay in developing these wells and ensuring their contribution to promotion of industrialisation in the region.
It has to be carefully examined as to why the LNG terminal at Kochi has not taken off? Can it be due to lack of political will or due to poor ground work by the concerned states?
If the present stalemate in securing an assured market for the LNG from the proposed terminal to be set up by Petronet LNG Ltd Kochi is any indication, a firm decision to make this proposal a reality is likely to be delayed further.
According to Gas Authority of India Ltd (GAIL), there is a potential demand of 4.92 Million Standard Cubic Meter daily (Mscmd) of LNG from existing plants, such as BSES, FACT, NTPC and DC power in Kerala. Further, the demand from NTPC, when its present thermal plant at Kayamkulam is expanded by 1,950 MW, would be an additional 7 Mscmd.
According to Petronet LNG, gas could be supplied to Kayamkulam and other IPPs in Kerala and Karnataka on commercial terms. Besides, FACT and Kochi Refineries could use LNG; Naphtha in FACT could be replaced with use of LNG by which the cost of urea production could be reduced in FACT.
Apart from these, other industries can be identified to meet the full supply from Kochi LNG terminal.
The terminal at Kochi could cater to the demand of gas consumers in Kerala and Karnataka. Most of the pre-project activities involving an investment of about Rs.30 crore are completed. Further activities are on hold pending finalisation of consumers.
While NTPC is talking about the expansion of its thermal plant, it appears to be non-committal on sourcing LNG from the Kochi terminal.
Obviously, more dedicated and committed efforts are called for, instead of trading Kochi LNG as if it is an unwanted body.
DETAILS ON DAHEJ PROJECT OF PETRONET LNG LTD.
The majority equity is held by IOC, GAIL India, BPCL and ONGC. Other stakeholders include fuel supplier Rasgas of Qatar and FIs.
Location: Dahej, Gujarat .
Advantages of the location site: Proximity to the 2700 km long Hazira-Bijaipur Jagdishpur (HBJ) pipeline, which rungs from the west coast to the main North India hinterland, including Delhi .
Proximity to the identified LNG supply source from Ras Laffan in Doha Qatar and access to large gas consuming industries, both in Gujarat and along the HBJ gas pipeline.
Shoreline based, with a natural sea water depth offshore of more than twelve metres, meaning that no dredging or navigation channel is required to enable berthing of large LNG ships.
Equipment suppliers and contractors: PLL selected IHI of Japan as the EPC Contractor. PLL has appointed Foster Wheeler Energy Ltd. of United Kingdom as Project Management Consultant (PMC) for regular review, monitoring and execution of the project.
Status of construction: Construction of Dahej terminal is proceeding as per schedule and 98% work has been completed. Entire equipment has been erected at site.
The tanks are getting ready to receive the first shipment of LNG.
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News and Views 
December 2003
