South India firms to get natural gas for revamping factories
New Delhi: Chemical factories in South India are set to get natural gas, a clean fuel, to replace the conventional and more polluting fuel, naphtha, with the Supreme Court earlier this month quashing Tamil Nadu’s objections to state-owned gas transporter Gail (India) Ltd laying pipelines for the Kochi-Mangalore natural gas highway.
A government official privy to discussions on gas supply agreements between state-owned Gail and companies said that Madras Fertilizers Ltd, Manali, Mangalore Chemicals and Fertilizers Ltd, Mangalore, and Southern Petrochemicals Industries Corp. Ltd (SPIC), Tuticorin, will benefit from the apex court decision.
The process to convert plants from naphtha to gas as a feedstock, which was delayed by disputes relating to right of land use, will now get expedited. The Kochi-Mangalore gas pipeline is expected to deliver clean fuel to power, ammonia and fertilizer producers and to a host of small industries along its route in Kerala, Tamil Nadu and Karnataka to improve their carbon emission record. At the Paris climate conference in December, India had committed to reducing carbon emissions by 35% by 2030.
Also, Kochi-based Fertilizers and Chemicals Travancore Ltd (FACT), a loss-making company of the state government, will soon get access to clean gas with which it would set up a Rs.7,500 crore urea manufacturing facility with assistance from the Central government. The official said that FACT is expected to sign a deal to mortgage its land to the Central government, which will finance Rs.1,000 crore towards setting up the plant.
The Centre is also exploring if a Rs.5,500-crore petrochemical complex planned by refiner Bharat Petroleum Corp. Ltd in Kochi could be housed on FACT land in a bid to turn around the company.
Gas pipelines are laid underground and the ownership rests with the existing title holder, who gets a percentage of the market value of the land as compensation. After laying the pipelines, the ground is restored and handed back to the owner.
While allowing Gail’s claim for land use rights, the apex court bench comprising chief justice T.S. Thakur and justices A.K. Sikri and R. Banumathi asked Gail to raise the compensation to 30% of market value from 10%. Land owners will also get compensated for damage to crops and trees.