Kochi: Though over four months have passed since the LNG terminal at Puthuvype, here, started functioning on August 20, 2013, there are not many takers for the imported natural gas among the industrial consumers with the offer price of the fuel hovering around $ 24 MMBTU. Prime Minister Manmohan Singh will dedicate the terminal to the nation on Saturday.
According to sources, only FACT has started availing the gas in a major way. Kochi Refinery and Hindustan Organic Chemicals, the other two firms which showed initial interest are yet to finalise agreements. None of the other units in Kochi has shown any interest in the fuel.
Even FACT is in a dilemma now as the price of LNG steadily rose over each shipment. Though the public sector unit had made a proposal before the state government to reduce the 14.5 per cent VAT on the fuel, the latter had not taken a decision on it so far. FACT was getting naphtha for a much lower price with subsidy.
On the contrary, industrial units in Gujarat are getting LNG for one-fourth of the international price thanks to domestic supply. “Only when we can link the state with domestic sources of gas like KG Basin, we will get gas in competitive price,” a source pointed out.
It may be recalled that GAIL had laid a 44 km-long pipeline in the city to connect the LNG terminal with major industrial units. GAIL is also making only slow progress with the Kochi-Mangalore-Bengaluru pipeline to link the Puthuvype terminal with other states.
Meanwhile, the Petroleum and Natural Gases Regulatory Board (PNGRB) had recently renotified the City Gas project under which houses in the city are to be supplied piped natural gas (PNG). The last date for receiving the tenders is February 11. Once the project is awarded, it may take at least one year for the pipes to be laid to houses.