India's Kochi LNG terminal near-term utilisation capped at 10%

22 August 2013 08:59  [Source: ICIS news]

KOLKATA (ICIS)--Utilisation rate at Petronet LNG Ltd’s (PLL) Kochi terminal in southern India is not expected to hit more than 10% of its 5m tonne/year capacity in the absence of a distribution network, a company official said on Thursday.

The terminal received its first liquefied natural gas (LNG) shipment on 20 August from RaasGas, Qatar, the official said.

Only 44 kilometres (km) of pipeline network linking the terminal to the province of Kerala has been completed so far, limiting LNG demand and offtake to a few local industries, the official said.

The full length of the network pipeline should be more than 900kms that should connect the terminal to major industries to the provinces of Tamil Nadu and Kerala.

But the pipeline project being undertaken by GAIL India Ltd has been facing legal problems amid strong opposition from farmers, over whose land the pipeline will be laid out.

Since the issue is still pending before the courts, ramping up capacity utilization at the Kochi terminal is hanging and dependent upon GAIL completing the pipeline project, the official said.

At the same time, major prospective customers of PLL within the completed 44km pipeline within Kerala are not yet ready to procure LNG. These include Fertilizer and Chemicals Travancore Limited (FACT), which has yet to complete the conversion of its naphtha-based fertilizer plant into an LNG-based unit, the official said.

Uncertainty in demand, distribution and capacity utilization at the Kochi terminal also affects PLL’s LNG import plans. PLL imports 7.5m tonne/year of LNG from RaasGas for its terminal at Dahej in western Indian province of Gujarat, the official said.

Author: Ajoy K Das

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