After a delay of almost a decade, the Rs 4,200-crore Liquefied Natural Gas (LNG) terminal at Puthuvype by Petronet LNG Limited is all set to start operations. The terminal will have a capacity of 5 million tonnes a year.
Though the official dedication of the terminal will take place in two months, pumping of gas from the terminal will start this month.
It is expected that the terminal will get LNG from Qatar from next week.
“Preparatory works for the supply of LNG to various customers in Ernakulam district is on. Once the consignment reaches the terminal, we will do LNG supply on an experimental basis. The official dedication will take place at a later date which will be declared later,” said a Petronet LNG official.
The terminal will operate at a capacity of 8 per cent initially. But experts point out that the under-utilisation of capacity will be a burden for Petronet as the per unit supply cost of LNG will be higher.
At least 70 per cent of the total capacity, or 3.5 million tonnes a year, is required for the terminal to function at minimum optimum efficiency.
“At least 70 per cent of capacity utilisation of the terminal is needed to avoid losses to the company during transmission. This will also prove costly for the consumers as well,” said M P Sukumaran Nair, director, Centre for Green Technology and Management.
The proposal to start LNG terminal at Dahej in Gujarat and Puthuvype in Kerala was taken in 1998.
The Dahej LNG terminal was commissioned in 2004. The total requirement of LNG for the existing consumers is 0.5818 million tonnes.
Only BPCL Kochi Refinery and FACT have completed arrangements for using LNG as their fuel. However, FACT is yet to ink the deal officially with Petronet as the final price of LNG is not yet known.
The major industrial customers at the first phase are BPCL-KR, Nitta Gelatin and HOCL.