Kakinada Sea Ports Limited, the private operator of Kakinada port, is playing spoilsport to Chief Minister N. Kiran Kumar Reddy’s dream project of floating a terminal for RLNG gas.
With the state reeling under severe energy crisis, the Chief Minister has been banking heavily on the RLNG facility proposed at Kakinada for import of gas to be supplied to power utilities.
The state’s plan to supply 12 mmscmd of RLNG that would be adequate to generate 50 million units daily by the power utilities. The floating terminal facility at Kakinada is thus a necessity for the state in order to overcome the shortage.
Official sources, however, told this newspaper that KSPL has been creating hurdles in the joint venture between the state government, Gas Authority of India Limited and world gas major Gaz De France in moving ahead with the project.
“The facility will not be ready by end of 2013 as planned by the Chief Minister if the hurdles are not cleared now,'” sources said.
First, KSPL delayed in giving consent to the JV for the floating terminal, required by the latter in order to approach the Centre for environmental clearance. When it finally did give the letter of consent, it put a rider that the project will be constructed as per its own concession agreement with the government that gives absolute right over the port to KSPL.
KSPL, it is said, is insisting that it will execute the project and own the floating gas storage facility. The JV will then merely remain an importer of gas using KSPL infrastructure.
“The other JV partners have objected to KSPL’s conditions,” sources said.
The JV is apprehensive that KSPL might hike execution cost and add its rate of return to the project cost which will ultimately increase the price of each unit of gas. It fears that the objective of a state-owned gas facility to supply gas at a cheaper rate will be defeated.
“Nowhere in the world is gas importer and floating storage facility operator two different entities,” sources pointed out.