The Hindu Business Line : `LNG will power industrial growth in South' — Petronet to get Kochi plant ready by 2009

Demand for natural gas in Kerala, Western Tamil Nadu and parts of Karnataka (Mangalore region) had been estimated to be 10 million tonnes per year. While nearly 80 per cent of the demand would come from the industries, the balance would come from the auto sector for Compressed Natural Gas (CNG).

Coimbatore , Dec. 29

LIQUEFIED Natural Gas (LNG) is the fuel that will power the growth of industries in Southern India and Petronet LNG is working at commissioning its Rs 2,500-crore Kochi LNG plant by 2009, according to a senior executive of the Gas Task Force.

It will also become the preferred fuel of automobiles with the Kerala Chief Minister already indicating that KSRTC buses will be run on this fuel once it is made commercially available, he said.

Speaking to newspersons in Coimbatore, Mr M.J. Mohan, General Manager (Gas Task Force), BPCL, Ernakulam, said the construction work on the 2.5 million tonnes per annum (MTPA) regasification plant of Petronet LNG Ltd (PLL) was likely to begin in June 2006. The company had acquired around 35 acres at a cost of about Rs 35 crore and the plant would be commissioned by 2009. The investment envisaged for the project had been revised upwards from Rs 1,800 crore to Rs 2,500 crore and the plant's capacity was likely to be doubled to 5 MTPA.

He said Petronet LNG's plant at Dahej in Gujarat had proved to be a big hit with the industries in Western and Northern India and had helped them to bring down operational costs, thus contributing to a healthier bottomline.

Petronet planned to increase the capacity of the Dahej plant ultimately to 12.5 million tonnes from the present 5 million tonnes.

He said the demand for natural gas in Kerala, Western Tamil Nadu and parts of Karnataka (Mangalore region) had been estimated to be 10 million tonnes per year. While nearly 80 per cent of the demand would come from the industries, the balance would come from the auto sector for Compressed Natural Gas (CNG) and domestic users would constitute a small percentage for the Piped Natural Gas (PNG).

Mr Mohan, explaining the advantages of LNG, said apart from being an environment-friendly fuel, natural gas also compared favourably with others such as petrol, diesel, LPG and naphtha in terms of price. While producing roughly around 90 per cent less emission compared to petrol or diesel, the saving in cost was between 33 per cent and 66 per cent depending on the fuel/feedstock used and their application.

He said in Kerala he expected FACT and NTPC to be among the prominent industrial users for LNG. The Kerala Chief Minister had already indicated that he would support the use of LNG by KSRTC buses as fuel and an official delegation was to study the use of natural gas by the public transport system in Delhi.

He said he saw substantial potential for use of natural gas by industries in the western part of Tamil Nadu, particularly foundries, auto ancillary units and textile mills.

He said the task force was keen to have the infrastructure ready for the supply of gas in time before the plant was commissioned.

On the question of supply of CNG to vehicles, he said the task force was studying two options — to have exclusive outlets to dispense CNG and to have space for CNG supply in the existing retail outlets.

He conceded that the availability of CNG at a large number of petrol pumps in easy proximity to the vehicle users was essential if the concept of usage of CNG as an automobile fuel across the State was to succeed.

In places where CNG could not be supplied through pipes, the possibility of tanker supplies could be considered. Mr Mohan said the task force would also work towards supply of piped natural gas to domestic users and to begin with, it would be done at Kochi and later extended to other cities.

Mr Thomas Zachariah, Deputy General Manager (LNG), Kochi Refineries Ltd, said natural gas could become a substitute for crude oil for various applications.

The Gulf region and Europe and Eurasia account for nearly 75 per cent of the proven gas reserve. Even if the price of natural gas goes up in the future, it would still be economical compared to other fuels now in use.

Petronet LNG is a joint venture promoted by GAIL (India), ONGC, IOC and BPCL.