Kochi LNG terminal to change the economics of Kerala
Renjini Liza Varghese
The southern most Indian state is close to realising its dream of having a larger source of fuel cater to its industries. It is not that the fuel need is being met. But the dream of regaining the lost sheen of an industry-friendly state may be ratified when the Kochi LNG terminal commissions in 2012.
Kochi LNG terminal dominates the conversations, be it the state officials, the industry bodies (though a minimal presence) and even the common man. “It is a dream project which will rewrite the economics of the state completely,” said Kerala industry minister Elamarom Kareem. “This is one of the fastest projects which is being completed in record time in the state. Industries kept away from the state because of power shortage. But, now with the LNG terminal, we will be able to run the NTPC Kayamkulam to its full capacity of 1,200 Mw,” he added.
True, the state will go through a sea of change in its economy and the industry front once the terminal is commissioned. The major beneficiaries will be the power generation utilities followed by loss making PSUS like FACT, the largest fertilizer producer in South India.
“The LNG supply will be a boon to the power sector of the state. The state is majorly dependent on hydro power and in summer faces shortage. To bridge the gap, the state depends on the central quota and the spot maket. However, this pinches the consumers and forces the state to cough out the extra bill. As no gas is available, the state is looking at converting the existing
diesel plants in Brahmapuram and the BSES plant near Kochi to gas based. The peak non-peak gap of 40 per cent can easily be bridged when the conversion of the two existing plants and the Kayamkulam supply comes in,” said electricity minister A K Balan. “Remember, Kerala is the first state in the country to have a fully electrified district. And we want to make every household accessible to grid power in another two years. As in any other state, the power demand is increasing year by year. Once the fuel is available, it will be easy for the state to attract investments in power generation,” he added.
This is the second terminal by Petronet LNG and if you take the company version at face value, this is one of the fastest terminals they have put in place in the stipulated time frame. The mechanical work of the terminal is expected to be completed by December 2011, and to be operational from March 2012.
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