The Hindu

Mangalore, Dec 8: The Kanara Chamber of Commerce and Industry (KCCI) has urged the Centre to split the proposed Dabhol-Bangalore pipeline at Davangere to supply liquefied natural gas (LNG) to Mangalore.

In a letter to Minister for Petroleum and Natural Gas Murli Deora, KCCI president Srinivas S. Kamath has said that there was a demand for 8 mmscmd (million metric standard cubic metres a day) of gas in Mangalore from the existing industries and the proposed Mangalore Special Economic Zone phase I and II. The use of natural gas would boost industrial development of the area as its cost was half of its substitutes being used now.

Mr. Kamath said that spur pipeline from Davangere would save Rs. 550 crore in this case of Mangalore Chemicals and Fertilisers, whose products were subsidised by the Central Government. The fuel inputs of companies such as Mangalore Refinery and Petrochemicals Ltd, GMR Power Corporation Pvt Ltd. and other units would come down drastically. Consequently, the prices of their products would also come down and their competitive edge would benefiting the farmers and the common man, he said.

The low sulphur content in the natural gas would bring down the pollution levels. His estimation was that carbon dioxide (CO2) emissions would come down by 9,885 tonnes a day and sulphus duoxide (SO2) emissions by 111 tonnes a day, if the proposed expansions of the MRPL and MSEZ were factored in. He pointed out that natural gas had sulphur content of less than 1 PPM (parts per million) as against kerosene’s 30 PPM.

The Centre had approved two gas lines by GAIL (India) Ltd — Dabhol to Bangalore and Kochi-Kanjirkkod-Bangalore/Mangalore. Davangere-Mangalore would be 250 km long while Kochi-Mangalore line would be 450 km long.

KCCI’s understanding was that Kochi-Mangalore pipeline was proposed to be laid by 2012 in the second phase. Besides, Kochi’s Petronet terminal had been able to tie up for supply of LNG, enough only for Kochi region and it would not be sufficient to cater to the requirement of Karnataka. Hence, he urged the Centre, to clear the spur line from Davangere from the Dabhol-Bangalore pipeline.

He pointed out that a 1,500-MW gas-based power project had been approved by the State’s high level Cabinet committee for the region, keeping in view the SEZ and other industrial expansion plans. This power project would immensely benefit from the spur line and in turn boost the State’s industries by providing reliable power to them, Mr. Kamath stated in his letter.

Conversion

He said that all the non-gas based urea manufacturing units had to be converted to gas-based ones by 2010. He quoted an MCF’s letter which said, “We have been representing to the Government of India that we are ready to convert … to gas bus. But the gas availability by … 2010 at Mangalore is uncertain. Though we had signed the Heads of Agreement (HOA) with BPCL in March 2006 for supply of gas from LNG terminal of Petronet at Kochi, the progress regarding the supply of gas to Mangalore is very slow.”

Saving

The KCCI president said in the letter to Mr. Deora that high cost naphtha and furnace oil were being used for producing urea fertilizer, resulting in higher subsidy outgo from the Government of Inia, which could save about Rs. 533 crore a year by way of reduced subsidy. He had taken into account the full production capacity of 3.8 lakh metric tonnes of urea a year at the MCF unit here.