GAIL (India) Ltd has sought the
assistance of the Ministry of
Petroleum to expedite the
planned conversion of Madras
Fertilizers Limited's Manali plant
in Tamil Nadu from naphtha as
feedstock to natural gas. MFL had
approached GAIL for providing
pipeline connectivity to the plant.
However, MFL is seeking extension
of timeline for carrying out
the conversion.
In a letter to the petroleum ministry,
GAIL stated that MFL had
earlier planned to get connectivity
to its unit from RGTIL's Kakinada-
Chennai pipeline which, however,
is getting delayed. GAIL's
Kochi-Koottanada-Bangalore-
Mangalore pipeline is in various
stages of completion and is scheduled
to be commissioned by mid-
2013. This pipeline would facilitate
R-LNG supply from Petronet
LNG's Kochi Terminal to various
customers in Kerala, Tamil Nadu
and Karnataka.
In view of MFL's requirement of
natural gas, GAIL planned to lay a
spur line from the nearest tap-off
point of KKMBPL trunk pipeline
at Krishnagari to MFL's unit at
Manali. Constructing this
pipeline will take around 18
months. The approximate length
of the spur line connectivity will
be around 270 km with an estimated
capital expenditure of
650
crore. GAIL further mentioned
that the expenditure could be
accommodated within the trunk
pipeline tariff of KKMBPL subject
to approval of the Petroleum and
Natural Gas Regulatory Board.
GAIL further noted that since
PLL's Kochi R-LNG Terminal was
expected to be completed by the
end of 2012, MFL would obtain
early benefits of switching over
from naphtha to R-LNG as feedstock
with gas supply from Kochi
Terminal much earlier, before getting
natural gas from any other
source including Ennore Terminal
which is likely to come up in
2016-17. The early conversion of
the unit will derive early benefits
of capex recovery on conversion to
MFL as well as reduce the subsidy
burden of the government to the
tune of
340 crore per annum.
In view of this GAIL has requested
the petroleum ministry to take
up the issue with the Ministry of
Fertiliser and PNGRB so that
GAIL is authorised to lay the spur
line from Krishinagri to MFL's
unit and further modalities in
terms of conclusion of commercial
agreements can be taken up at the
earliest.