Date:11/09/2004 URL: http://www.thehindubusinessline.com/2004/09/11/stories/2004091102040200.htm

Back Kochi LNG project: GAIL to complete pipelines in a year

G.K. Nair

Kochi , Sept. 10

GAIL (India) Ltd would complete the laying of the pipeline from Kochi to Mangalore and Bangalore in one year once Petronet LNG Ltd (PLL) commences work on its terminal here.

The State Government has already issued 6 (1) notification for using the land for laying the pipeline for a stretch of about 230 km from here to Kanjikod in Palakkad district, while for the second lap of the distance from there to the Tamil Nadu border to Coimbatore and to Kasargod. The notification is expected to be issued soon, reliable sources told Business Line.

They said that from Kanjikod, one line would be laid to take gas to Mangalore via Kasargode and the second to Bangalore and Chennai via Coimbatore. The total cost would come to around Rs 2,000 crore.

According to them, GAIL would be able to complete the project in one year. But, work on laying the pipeline could be started only after PLL decided to start work on the terminal here.

They said that GAIL had already entered into Head of Agreement (HOA) with 10 prospective buyers and would be finalising such agreements with some of the PSUs in the State by the first week of October.

GAIL is of the opinion that PLL should enter into a tripartite agreement with it and the prospective buyers for supply of gas from the Kochi terminal. It said that the company had been marketing 60 per cent of the gas from the Dahej terminal, while IOC markets 30 per cent and BPCL sells 10 per cent. ``There we haven't given any legal contract to PLL. But, here it is demanding such a contract.'' GAIL would be able to market 6mmscmd from the total 10mmscmd of gas from this terminal besides transporting the entire quantity.

The market study conducted by GAIL earlier and FACT Engineering and Design Organisation (FEDO) recently had shown adequate market for the gas from Kochi, they added.