Uncertainty about R-LNG upsets CGD plans for Kochi

Vol 10, PW 19 (25 Jan 07) Midstream & Downstream

Bharat Petroleum subsidiary Kochi Refineries is unsure about R-LNG supplies from Petronet-LNG’s upcoming 2.5m t/y terminal at Kochi for its proposed City Gas Distribution network in the port city.

“Petronet-LNG has not signed any agreement with suppliers to buy gas for Kochi,â€‌ a source at the refiner tells us, referring to continuing talks with the Gorgon consortium. “We will go ahead with our CGD plans only when we know our share of gas from the terminal.

You can’t set up a network unless you know how much gas you get. So far there is nothing on paper.

â€‌ State owned consultant MECON last month submitted a Detailed Feasibility Report (DFR) to Kochi Refineries for a proposed CGD network in and around Kochi. According to the DFR, the refiner will need 1.713m cm/d R-LNG for its CGD network in Kochi, Trichur, Palakkad and Trivandrum.

Of this, 500,000 cm/d will be set aside for CNG as transport fuel and gas to commercial establishments such as restaurants and hotels. In the port city of Kochi itself, five CNG mother stations and three online CNG stations are planned.

BPCL wants to set up a joint venture with GAIL to sell R-LNG to hotels, restaurants and as CNG but will supply directly to industrial users who use more than 50,000 cm/d. “There is less return on investment from supplies to domestic, transport sectors and from customers who buy less than 50,000 cm/d,â€‌ adds a source.

“We want to target industrial customers only.â€‌ Kochi Refineries hired MECON in June last year to prepare a DFR to set up a CGD network in and around this southern port city.

MECON prepared the DFR in two parts: Part-I looks at gas supplies to industrial consumers who require more than 50,000cm/d; Part-II looks at customers who require less than 50,000 cm/d. This latter category includes domestic households and users of CNG.