Monday, March 8, 2021

Kochi - Koottanad - Bangalore - Mangalore (KKBMPL) gas pipeline: A new(delayed!!!) dawn in South India's gas future

Terminal at Kochi
hen state owned Petronet LNG commissioned a regasification terminal at Kochi, there was hope that homes and industrial sites from Kochi to Mangalore and Koottanad to Bangalore will receive piped gas; atleast in the cities through which the pipeline goes; days of cylinder gas are numbered etc.

However, it took more than 7 long years to complete the main pipeline itself. Finally at the beginning of this year, Kochi-Koottanad-Mangalore line was commissioned. Work is in progress on Kootanad- Palakkad-Krishnagiri-Bangalore stretch. Pipeline itself is 1,104 km long, developed and operated by GAIL. This pipeline passes through Kerala, Karnataka, Tamilnadu and Puducherry. 

Though late, it looks like a great achievement. However the devil is in the details. Kochi LNG terminal was commissioned in sep 2013 with a capacity of 5mmtpa(million metric tonne per annum). It took a very long time to build associated pipeline network. Main reasons were, opposition from people on safety grounds; land price disputes; and to get the right of way. Political leadership was also not able to bring any solution to the table. So the issues continued. Meanwhile, the estimated cost for pipeline jumped from  2915 crore to 5750 crore. Remember the terminal itself costed 4200 crore only. 

Terminal at Kochi

Not only that, in the absense of pipeline network, there aren't many customers. LNG terminal's utilization is just 10-20%. Can you imgine a plant running at such abnormally low utilization for 8 long years? Even after commission of Mangalore line max-utilization will be around 25-30% only!!!

Meanwhile, Dahej terminal which launched with 5mmtpa capacity in 2004 doubled its capacity to 10mmtpa in 2009. Added 5mmtpa more in next 7 years. Then 2.5mmtpa in two years after that. Now Dahej's total capacity stands at 17.5mmtpa. From 2013 to 2018, in 5 year time span Dahej handled 1000 cargos. How much Kochi handled? around 45. Out of that, 18 were for reload and 2 were for bunkering. Hence effectively 25!!!

Today pipeline supplies 3.8mn m3 of gas everyday in Kochi.

The delay is criminal; its not that state government got nothing from the project. Kerala government will get significant amount of money as taxes (approximately 1000 crore a year). 

If this project was completed 5 years back, then LNG termial utilization might have been very high by this time. Who knows; Petronet may even double its capacity. Kochi had a chance to become a major gas hub of India. 

There were some dealys due to completing technically challenging 540m stretch which crosses Chandravati River in Kasarkode district of Kerala. Here pipeline goes upto 8m in river bed. However here the river flows through a valley and elevation difference can be as high as 150m. Which made the construction difficult.

Hope that state governments will learn something from these long delays, and the money it costed to the exchequer. 1) Missing tax revenue, 2) Utilization losses at Petronet LNG terminal 3) Delayed gas network construction across south India 

Engaging with people and derive a political solution for the problems in time is one of the reason why people elect their representatives. Why its not happening with the required urgency? Its something which all political parties in Kerala should think. 


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