FACT stops LNG consumption

FACT stops LNG consumption

Mounting arrears to the Minerals and Metals Trading Corporation Limited (MMTCL) has forced the Fertilisers and Chemicals Travancore Limited (FACT) to stop LNG consumption. FACT, at present, owes Rs.200 crore to MMTCL, its LNG suppliers.

The company is struggling hard for survival for want of working capital. The energy bill arrears of Bharat Petroleum Corporation Limited (BPCL) due to Cochin Refineries Limited (CRL) also amounts to Rs.200 crore. The returns from sale of fertilizers is the sole source of income for FACT to meet its routine expenses. Though the company has stopped using LNG from Tuesday, it has a stock of 18,000 tonnes of ammonia and hence would able to continue with fertilizer production, company authorities said.

The company is banking on the 7,500 tonnes of ammonia which is expected to reach Kochi soon. This is expected to support the fertiliser manufacturing for the next two months. FACT is using LNG as a raw material and also for its energy needs.

FACT being the largest LNG consumer in the State, its decision to stop using the gas for the time being has come as a rude jolt to the Petronet LNG Terminal at Puthuvype. For, it could utilise only two per cent of its capacity so far. Moreover, this reversal has come at a time when the price of LNG has touched the rock bottom level.

The Gas Authority of India Limited’s (GAIL) decision to initiate tender proceedings has revived the hopes for the LNG pipeline project. GAIL has floated global tenders so that the work on the Kochi-Bengaluru pipeline could be revived in November. Pipes will be laid along 450 kms covering Ernakulam, Thrissur, Malappuram, Kozhikode, Kannur and Kasargod districts. Local protests had forced the authorities to stop the work on laying the pipeline.

But following the pressure from the Central Government, the State Government has come forward with all preparations for reviving the work on the pipeline. GAIL has entered into an agreement with Mass Constructions, a company based in Mumbai on Monday last for welding and laying the pipes in trenches in four districts, where the work has not been completed so far. Laying of pipes in the four districts would commence soon.


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