Petronet still on the hunt for LNG suppliers to Kochi terminal

Kochi: Petronet LNG Ltd (PLL) is still on the hunt for suppliers for its Rs 3195 crore Kochi LNG re-gasification terminal which got the approval of Cabinet Committee on Economic Affairs (CCEA) on Monday.

The approval, pending for some time, is for transfer of 33.4 hectares of Cochin Port Trust for 30 years lease for the setting up of the terminal with a capacity of 2.5 million tonnes expandable to 5 million tonnes. PLL ha already spent around Rs 100 crore for site grading and piling work which has begun.

PLL hasn't concluded any supply deals so far preferring to continue discussions to get the best offer. "We are confident of running the terminal by exploring both short term and long term supply contracts. At present we are talking to various sources across the world including from Australia and the Gulf," said Mr Amitava Sengupta, director (finance and commercial) of PLL. It has been in active talks with Gorgon project in Australia for the supply of gas.

Since the completion date of the terminal is 2012, the company would have time to finalise contract as the gas situation keeps changing. With the crash in oil prices, the gas prices too have come down. From a level of $ 20 mmbtu the price has dropped to $ 8 per mmbtu.

PLL is planning to market re-gasified LNG to fertilizer, power, textile industries and foundries in the south Indian market. The project will enable Kochi port to earn revenues from land lease rentals, vessel related charges and waterfront royalty.