PM asks Asian LNG buyers to come together to demand fair pricing

The Prime Minister expressed hope that India would contribute towards an effort of this kind in the future.

“Our country has less than one per cent of the world’s known natural gas reserves. Therefore for augmenting the supply of natural gas in our energy mix,we must necessarily import natural gas either by by setting up LNG terminals or through trans-national pipelines,” he said.

Import of natural gas and pricing the imported gas constitute challenges that we must meet successfully in the time to come,he added.

Pointing out that the terminal should be utilised to its fullest capacity,Singh urged the agencies concerned to do everything possible to ensure this.

Petronet LNG has already tied up to supply 14.4 lakh tonnes of LNG per year for the Kochi terminal from the Gorgon project in Australia for a 20 year period,he said adding the company was also at an advanced stage of discussion with other LNG suppliers for long-term contracts.

To make full use of the large investment in this project,the focus should be on increasing penetration of natural gas in Kerala by augmenting the pipeline network as done in the northern and western parts of the country. There was also need to explore how industrial units could make greater use of natural gas,he said.

Singh also urged the state government and the Petroleum ministry to pay attention to rolling out city gas distribution networks in the state so that gas could reach a much larger number of households.

He urged Kerala Chief Minister Oommen Chandy and Petroleum minister M Veerappa Moily to coordinate with all stakeholders,including Ministry of Power,to ensure realisation of full potential of the Kochi terminal.

“I am confident that in the coming years this terminal will prove to be of immense benefit to your beautiful state and help it in realising its enormous potential,” he said,adding it would put Kochi on the world LNG map and contribute to making Kerala an industry oriented and investor friendly destination.

“It will contribute to our efforts to promote clean energy and reduce carbon emissions. It will help in protecting Kerala’s environment,green cover and natural beauty”,the Prime Minister said.

The world class facility would provide South India with a cleaner and greener form of energy and cater to energy needs of industries in a diverse range of areas across the southern states.

A whole new industrial corridor is expected to come up along the gas pipeline route. The terminal is also expected to meet the energy needs for transport and households in cities as it can process as much as 50 lakh tonnes of LNG in a year. Chandy assured that all stakeholders will cooperate in removing the bottlenecks with regard to the completion of pipelines and promised full support of his government. Pointing out that gas was no longer a commodity used by the rich and was the most common fuel of ordinary people,he said price of gas affects the common man. He urged the Prime Minister to consider whether fixing of gas prices should be left to oil companies alone.

Petroleum Minister M Veerappa Moily said he wanted fast completion of the laying of pipelines in Tamil Nadu and Kerala.

“I will be happy when pipelines are laid across Tamil Nadu and gas reaches Bangalore and Mangalore.”

Pointing out that Kerala would have to work out a plan for optimum use of LNG,he said he would use the powers vested with him to enable early clearance of city gas project.

Petroleum Secretary and Chairman of Petronet,Vivek Rae said “we are working on leveraging our buying power so that Indian shipyards will qualify to manufacture LNG ships. We are trying to crack this problem.”

Presently,Korea and Japan construct such vessels.

He urged the governments of Kerala and Tamil Nadu to help in expeditious completion of laying of the underground GAIL pipelines. “If the southern states are connected it would be a big boost to the economy,” he said. Presently,only five per cent of LNG was being utilised from the terminal which would mean a loss of over Rs 300 crore,he said.

Kerala Governor Nikhil Kumar,Union ministers K V Thomas,Lakshmi Panebaka and state Excise minister K Babu were among those present. Operations at the terminal began since August last year after the first shipment of about 123,000 M3 of LNG gas arrived from Rasgas in Qatar.

Fertilisers and Chemicals Travancore (FACT) and Bharat

Petroleum Corporation Ltd (BPCL) are presently the only two customers for the LNG.

Besides the Kochi plant,Petronet operates a 10 million

tonnes per annum terminal at Dahej in Gujarat,which it plans to expand to 15 million by 2016. It is also constructing a facility in Andhra Pradesh.

The Kochi terminal presently operates at just eight per

cent of its total five million tonne capacity in the first year of operation as pipelines taking gas to customers in

Karnataka and Tamil Nadu are not ready following protests from local people over land acquisition.