The Hindu Business Line : GAIL to invest Rs 10,450 cr in Kerala; signs pact

Three major projects on the anvil are a naphtha-based petrochemicals complex, an LNG regassification terminal and a pipeline network as an extension of the national gas grid.

Thiruvananthapuram , July 12

GAIL (India) Ltd has signed a gas cooperation agreement (GCA) with the Kerala State Industrial Development Corporation (KSIDC) providing a roadmap for the national gas carrier's proposed investment plans in the State worth Rs 10,450 crore.

This roadmap aligns itself largely along three main projects planned: a naphtha-based petrochemicals complex, an LNG regassification terminal and a pipeline network as an extension of the national gas grid, according to Mr Proshanto Banerjee, Chairman and Managing Director, GAIL. The GCA commits GAIL to, among others, evaluating medium and long-term demand for natural gas in Kerala, undertaking a techno-feasibility study of a pipeline network; developing and constructing a network that would be operated on a common carrier basis; assessing the demand of the optical fibre cable bandwidth that piggybacks the pipeline network; and partnering with KSIDC for assessing the viability of city gas distribution projects.

Speaking to newspersons here, Mr Banerjee, who was accompanied by Mr P.H. Kurian, Managing Director, KSIDC, said Rs 7,000 crore would be invested in the naphtha cracker unit being promoted in Kasaragode district, for which KSIDC already holds a letter of intent.

The LNG receiving and regassification terminal with a capacity of 2.7-mmtpa is proposed to be set up either Kochi or Kayamkulam. The Cochin Port Trust has identified 40 hectares of land at Puthu Vypeen Island for development of the same. The estimated cost of the project is Rs 1450 crore and the feasibility report on the port and the LNG terminal is under preparation.

GAIL is willing to examine the options of either launching the project in partnership with Petronet LNG, the original promoter, or going it alone, Mr Banerjee said.

The third project is for the estimated 500-km-long pipeline that the carrier needs to transport gas to consumers in the State. Investments required have been put at Rs 2000 crore. Survey for the Kochi-Kanjirakkod-Mangalore pipeline has been completed while that of the Bangalore-Coimbatore-Kochi-Kayamkulam sector is under progress.

On its part, KSIDC would extend support in providing relevant data/information on the fuel usage pattern in the State and would help identify joint ventures for individual projects envisaged as per the terms of agreement.

The nodal agency will also work other State Government agencies to make data available to GAIL.

A joint working group will be out in place to monitor the progress of various activities listed under the GCA.

Managing Director, KSIDC, and Director (planning), GAIL, will be Co-chairmen of this group and a senior official of GAIL shall act as Member-Secretary.