If the revival package for the FACT is cleared by the Union Government it would also be a relief indirectly for the Petronet LNG Limited (PLL) Puthyuvype terminal, which registered losses in the first year of commissioning, points out leaders of the Save FACT Action Committee.
FACT and BPCL Kochi Refinery are the two major industrial units that need gas for operating their plants.
“If the package is cleared, FACT will be able to stabilise its financial position. Along with this, if gas subsidy is also granted, FACT can procure gas from LNG Terminal,” said a leader of the Action Committee. FACT had switched over to LNG from Naphtha in last September as LNG was cheaper for making Ammonia. But the fertiliser company later stopped procuring gas owing to thee high price quoted by the supplier.
The company decided to import Ammonia as it was cheaper for the company instead of producing internally using high priced LNG.
PLL first supplied gas at a price of $19.5/MMBTU, later in the second shipment the price was hiked to $21.5. The PLL then demanded `24.35 which which was not a viable option.
PLL, the largest importer of gas, has recently reported a 31 per cent drop in fourth-quarter net profit, mostly due to very low capacity utilisation at Puthuvype Terminal. The 5 million ton Kochi terminal is being operated at 1 per cent of capacity in the absence of pipelines to take gas to customers in Mangalore and Bangalore.