Competition from Ennore and Cochi

Vol 4, PW 19 (25 Oct 00) Midstream & Downstream

No doubt the entry of BP into the Kakinada consortium gives the project a badly needed boost.

Especially since most international majors have by now written offKakinada as a viable LNG destination. Not because of any inherent defect to the port, but because of the competition nearby: two strong projects, both with every chance of coming on stream before Kakinada.

At Ennore in Tamil Nadu, the CMS Energy-led Dakshin Bharat Energy Consortium has government-to-government backing, strikingly illustrated in a 14th September Joint Development Agreement signed during Prime Minister Vajpayee's state visit to the US. Across in Kerala, Petronet-LNG has a fuel supply agreement in place with RasGas of Qatar - signed 31st July 1999 - for the supply of 2.5m t/y of LNG to Cochi and expansion plans to increase the terminal to 5m t/y.

With competition like this, what hope for Kakinada, which only has the backing of Andhra Pradesh chief minister Chandrababu Naidu Undoubtedly BP will have carried out due diligence of the project and concluded that it is viable. Enron before tried to secure entry to the consortium but failed.

Shell emerged runner up to Indian Oil when Andhra authorities selected the choice of consortium in July this year. Clearly someone sees potential at Kakinada despite its late entry into the race.