Kochi EPC contract after port concession agreement

Vol 11, PW 15 (15 Nov 07) Midstream & Downstream

Petronet-LNG will award the EPC contract to set up the 2.5m t/y Kochi LNG terminal on Puthuvypeen Island in south India’s Kerala state only after the long-pending concession agreement with Kochi Port Trust is signed.

We are told that the federal cabinet must approve the port concession agreement because Kochi is a “majorâ€‌ port and there are “deviationsâ€‌ from the model port concession agreement.â€‌ A gas sector source tells this report that a â€کnote’ approving the port concession agreement is ready for approval by the federal cabinet.

“The cabinet note should be moved sometime this week.â€‌ Petronet-LNG sees no roadblocks in the path of the port concession agreement.

“Everything is going to schedule. We are told the agreement will be signed as soon as the cabinet note is approved.

â€‌ Meanwhile, Petronet-LNG continues to bargain hard with the IHI-led consortium to bring down the price of the EPC contract. “The price quoted for the onshore LNG storage tanks and the marine facilities matches the figures in the Fluor Daniel report,â€‌ says a Petronet-LNG source.

“We have no issues with those items.â€‌ However, there is a major difference between Petronet-LNG’s estimates and the price quoted by IHI for the regassification unit, utilities and piping.

“We feel that there can be major reductions in these areas.â€‌ And, “we know that IHI can reduce prices in these areas and still have a viable project.

â€‌ Another source says that since the price difference is “majorâ€‌ the boards of IHI and consortium members will have to take a decision on whether to accept Petronet-LNG’s estimates. On site, workers are busy putting up the boundary wall, which should be completed by the end of next month.

Petronet-LNG will soon award contracts to four short-listed suppliers for 1.25m cubic metres of sand needed to raise the height of the terminal site by three metres. “We will pay for the soil but the EPC contractor must bring in road rollers to compact the soil.