The lease rent for the 50 hectares allotted by Cochin Port Trust (CPT) to Petronet at Puthuvype for the project still remains a bone of contention between the two parties. The land has been granted on lease for 30 years for the Rs 1,600-crore project which involves importing and supplying LNG. The issue was referred to Tariff Authority for Major Ports (TAMP) several months ago. Last month, the TAMP chairman had a meeting with the officials of CPT and Petronet. Petronet has objected to Rs 2.06 lakh per hectare per annum lease rent proposed by CPT saying it is too high.

R K Ahuja, project manager of LNG Petronet Ltd said such a high rent will push up the cost of the LNG supplied to the customers. In Gujarat, where the company is putting up a terminal at Dahej, thelease rent is around Rs 50,000, he said. Further work will be possible only after the land price is fixed.

Petronet LNG is currently processing the bids received from 11 companies for engineering, procurement and construction of the project. The land and marine surveys for the Kochi project has been completed and the detailed design work is in progress.

The tieups with the customers is another problem. Unlike Dahej, where Petronet has been able to find customers easily, the company has reached an understanding with only five companies here so far for supplying 2.5 million tonnes of LNG per annum. It has reached an agreement for supply of LNG as fuel to Siasin Energy Ltd for its 680 mw plant at Puthuvype, 300 mw plant Palakkad Power Generation Corporation, Rs 513 mw Kannur Power Project, Rs 165 mw BSES Kerala Power Ltd and the new ammonia plant of FACT. Of these, only the last two are functional using naphtha. According to Ahuja, the total purchase by all these units may come to over 1.5 million tonnes.The company has to find customers for the remaining one million tonnes before going on stream. It is obviously eyeing the 350 mw NTPC project at Kayamkulam. The capacity of the unit is planned to be increased to 2000 mw in another two to three years.