Gail's Kochi complex shelved: Deora

The proposed Rs 7,000-crore (Rs 70-billion) petrochemical complex of Gas Authority of India at Kochi has been shelved for the time being due to technical issues, according to Minister of Petroleum and Natural Gas Murli Deora.

The project had to be shelved as the Kochi LNG terminal would get only lean LNG, which was not suitable for the proposed gas cracker unit, Deora said. He said the project had not been withdrawn.

The proposed Kochi LNG terminal of Petronet LNG has been delayed by almost two years, according to the revised schedule.

According to Narasimha Raju, the joint secretary in the ministry, the terminal would start by February 2011. It was scheduled to be commissioned by 2009.

Petronet LNG will sign an agreement with Gorkhaon Gas of Australia by the middle of July, 2008, for supplying 2.5 million tonne LNG on an yearly basis. By the time, the company would also reach an agreement with NTPC for selling a major chunk of gas from the terminal.

The delay in the commissioning of the project was due to the prolonged discussions with various companies. Raju said the agreements could be signed by the middle of next year.

Also, the package for the awarding the EPC (engineering, procurement and construction) contract for the project had to be re-designed because of the soil condition in the project area. The contract will now be awarded by July-August.

Ashok Sinha, the chairman and managing director of BPCL, said the construction of the Rs 800-crore (Rs 8-billion)single point mooring project of BPCL at Puthuvype near Kochi would be completed by the end of September.

Meanwhile, Deora said the government was considering introduction of smart cards to check the diversion LPG cylinders for commercial use.

Replying to a query, he said there was no immediate move to raise the prices of petrol and diesel although international crude prices had been rising for the time being. To a query, Deora said the crude refining capacity of Kochi Refineries Limited, a subsidiary of BPCL, would be expanded to 9.5 MMTPA from the existing 7.5 MMTPA at a cost of about Rs 2,500 crore (Rs 25 billion).

Deora added the refinery was implementing a single point mooring project that would enable import of crude through very large crude carriers. Including this, KRL will invest about Rs 3500 crore (Rs 35 billion) for expansion projects in next three years.