Date:17/06/2006 URL: http://www.thehindu.com/2006/06/17/stories/2006061704701700.htm

Business

Gas Task Force begins work on detailed feasibility report

Special Correspondent

The objective is to supply piped natural gas to domestic consumers

KOCHI: The Gas Task Force (GTF), jointly formed by Bharat Petroleum Corporation Limited and Kochi Refineries Limited, has begun work for preparing a detailed feasibility report (DFR) for supplying piped natural gas (PNG) to domestic consumers.

The GTF has been primarily formed for marketing Regasified Liquefied Natural Gas (RLNG) in and around Kerala. Petronet LNG Limited (PLL), a joint venture of BPCL, IOC, GAIL and ONGC, is setting up a regasification plant at Puthu Vypeen here and it is envisaged that imported LNG would be brought in ships to Puthu Vypeen and regasified in PLL's regasification plant, which is expected to be commissioned by end of 2009.

Official sources say that GTF will be completing all formalities including tying up with customers by the time RLNG is made available by PLL.

According to KRL sources here, the proposed gas grid for evacuating RLNG from the regasification plant is being put up by GAIL. It will consist of a main line from Kochi that will go up to Kanjikode in Palakkad and thereafter to Bangalore via Coimabtore and Salem. A spur line is also envisaged from Kanjikode that will go to Mangalore via Kozhikode and Kasaragod. Another dedicated submarine line will be laid from Kochi to Kayamkulam for supplying RLNG to NTPC, says the KRL's in-house publication here.

The mandate for the GTF is to market RLNG in Kerala and areas adjoining the pipeline in Tamil Nadu and Karnataka to major industrial customers whose requirement is more than 12,500 tonnes a year. Smaller customers will be serviced by a joint venture company (JVC) being formed by BPCL and GAIL. The JVC will also look after distribution and supply of gas in Kochi for domestic use and compressed natural gas for the automotive sector. A memorandum of understanding between BPCL and GAIL has already been signed for the purpose.

The GTF has been educating the public about the techno commercial advantages of natural gas in comparison to existing fuels. The Force has already commenced obtaining expressions of interest from major customers.

These expressions of interest have been obtained by signing Heads of Agreement. HOA is a standard agreement formulated to express the customers' interest in off-taking gas. HOAs have been signed with major customers such as NeST group, Mangalore Chemicals and Fertilisers Limited, Apollo Tyres Limited, Hindustan Newsprint Limited and Hindustan Organic Chemicals Limited, apart from others.

With the signing of the heads of agreement, the GTF has almost achieved the target market share of BPCL. Discussions are at an advanced stage with other majors such as MRF, FACT, KSEB, etc, the publication says.

The GTF has commenced work for developing the detailed feasibility report. It would cover both the feasibility of GTF's specific activity of supplying gas to industrial consumers and the feasibility with respect to the JVC proposed between BPCL and GAIL for supply to various segments.