PM dedicates Kochi LNG terminal, calls for a fair pricing mechanism for gas imports

Prime minister Manmohan Singh has called for a grouping of gas consuming countries in Asia to demand a fair pricing mechanism for gas being imported from outside the continent.

Dedicating the newly set up Kochi LNG terminal in Kerala, the prime minister said Asia has been the driver of the global LNG demand in recent times. It is therefore important that major buyers of LNG in Asia come together.

I hope to see India contribute towards an effort of this kind in the future, he said.

Petronet LNG's Kochi terminal, which has been under implementation since 2005, took nearly 8 years for completion.

Built at a cost of about Rs4,500 crore, it will put Kochi on the world LNG map and contribute to making Kerala an industry oriented and investor friendly destination, the prime minister said.

It will also contribute to our efforts to promote clean energy and reduce carbon emissions and thereby help protect Kerala's environment, green cover and natural beauty, he added.

He said the location of the terminal has been chosen so that it can provide the whole of Southern India with a cleaner and greener form of energy.

''This world class facility is intended to cater to the energy requirements of industries in a diverse range of areas across the whole of Southern India. A whole new industrial corridor is expected to come up along the gas pipeline route,'' he said.

With an annual processing capacity of 5 million tonnes of liquid natural gas, the terminal is also expected to meet the energy requirements for transport and households in cities, he added.

Kochi is strategically located on the east-west trade route and a centre for transit and trans-shipment services. The shipping industry too will benefit greatly from this terminal and more as more ships are mandated to use cleaner fuels like LNG.

Petronet LNG has already tied up supply of 1.44 million tonnes of LNG per year for the Kochi terminal from the Gorgon project in Australia for a 20 year period. The company is also in an advanced stage of discussion with other LNG suppliers for long term contracts, the prime minister pointed out.

He suggested increasing the penetration of natural gas in Kerala by augmenting the pipeline network, in a manner similar to what has been done in northern and western parts of the country.

''We also need to explore how industrial units can make greater use of natural gas,'' he said.

India, the prime minister said, has less than 1 per cent of the world's known natural gas reserves. Therefore, for augmenting the supply of natural gas in the energy mix the country must necessarily import natural gas either by setting up LNG terminals or through trans-national pipelines.

Import of natural gas and pricing the imported gas constitute challenges that we must meet successfully in the time to come, he added.