LNG Kochi Terminal Not of Any Benefit to Kerala

Petronet LNG Ltd incurs a loss of roughly Rs400 crore in its Kochi operations every fiscal.

Published: 30th January 2016 05:27 AM  |   Last Updated: 30th January 2016 05:27 AM   |  A+A-

LNG

KOCHI: In January 2014, then Prime Minister Manmohan Singh dedicated the Rs 4,500 crore LNG Terminal at Puthuvype in Kochi to the nation. Even after two years the terminal is not of any benefit to the nation or the state.

The Petronet LNG Terminal project became ‘idle’ because of the non-laying of the pipeline by Gas Authority of India Ltd (GAIL).

Petronet LNG Ltd incurrs a loss of roughly Rs 400 crore in its Kochi operations every fiscal. The primary reason for it being nearly static gas offtake from the terminal, with little progress on the supply pipeline. The LNG Terminal in Puthuvype was commissioned in August 2013, and was officially dedicated to the nation in January 2014.

The latest twist in the tale is that the state government accuses GAIL of going slow on the project as they have not awarded the contract to carry out the project till date. Kerala government officials said GAIL had earlier agreed to award the work contract by the beginning of January 2016.

GAIL officials said the work of the LNG pipeline project in five districts except Kozhikode and Malappuram would start in February.

“The pending pipeline work in Ernakulam, Thrissur, Palakkad and Kasargod districts will resume soon. The survey in Kannur district is yet to be completed and the government has to take a decision on the land price there. The issues in Malappuram and Kozhikode districts are yet to be resolved. Going forward the monsoon will be a challenge before the implementation of the project. We are hopeful to complete the pipeline laying by the end of financial year 2016-17,” said a GAIL official.

The Petroleum and Natural Gas Regulatory Board (PNGRB) held an open house discussion for finalisation of natural gas pipeline tariff of Kochi-Koottanad-Bangalore-Mangalore pipeline recently. Another joint open house on the tariff will be held on February 16 in New Delhi.

There are allegations from many quarters about the ‘slow progress’ of the pipeline work saying that GAIL wanted to cover up the low revenue from the Dabhol-Bangalore pipeline. If the Kochi-Bangalore pipeline becomes a reality, the significance of the former pipeline will be lost and the revenue from it will fall significantly.

“It seems GAIL is deliberately slowing the Kochi-Mangalore-Bangalore pipeline project. The survey for the Koottanad-Bangalore pipeline has been completed. But the company is not awarding the contract citing that 100 per cent survey is not completed. No where in the country did they wait for the survey to be fully completed for a project. When the survey for 30 per cent is completed the work contract is normally given,” said a state government official.

White elephant

  • Petronet LNG Ltd incurrs a loss of roughly Rs 400 crore in its Kochi operations every fiscal
  • The LNG Terminal in Puthuvype was commissioned in August 2013, and was officially dedicated to the nation in January 2014
  • the state government accuses GAIL of going slow on the project as they have not awarded the contract to carry out the project till date
  • GAIL officials said the work of the LNG pipeline project in five districts except Kozhikode and Malappuram would start in February
  • The Petronet LNG Terminal project became ‘idle’ because of the non-laying of the pipeline by Gas Authority of India Ltd (GAIL)
  • Gas offtake from the terminal is nearly static
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