The liquefied natural gas (LNG) terminal of Petronet LNG Limited, which commenced operations with the offloading of gas at Puthuvype here in August last, will be officially inaugurated later this month.

Prime Minister Manmohan Singh would announce the launch of the project on December 21 at a function here, company sources said.

The commissioning of the terminal gave shape to a dream project but its capacity utilisation remains low. With FACT and BPCL Kochi being the only two major consumers now, the capacity utilisation remains below 10 per cent. After the first vessel from Qatar carrying 1,23,000 cubic meters of gas offloaded it in August-September, the second vessel with 1,38,000 cubic meters of liquefied gas reached the terminal a fortnight ago.

Lower capacity utilization would mean higher operational costs, affecting the viability of the project. However, the project is certain to find more patrons in long-term as the awareness on the clean fuel is spreading. More bulk industrial users are expected to join the list of LNG consumers. Domestic supply is also tipped to be launched in Kochi. Petroleum & Natural Gas Regulatory Board has already begun procedures for inviting tenders for supply of gas to domestic consumers under the city gas project in Ernakulam district.

KMML, Kollam, a public sector unit, is planning to use natural gas for its fuel needs. HLL unit in Thiruvananthapuram is also in the gas beneficiary list. KSRTC and NTPC Kayamkulam are among the other prospective customers though final decision is yet to be taken by the two.

According to the projections by Petronet LNG Limited, the city gas demand is to go up from 15 mmscmd in 2012-13 to 36 mmscmd by 2019-20. Power sector's dependence on gas will go up from 86 to 202 mmscmd during the period while fertilizer manufacturers' need for gas will increase from 60 to 106 mmscmd during the same period.

The pipeline laying work in Kerala, taken up by Gail India, is progressing at a slow pace. The project for laying pipelines in Tamil Nadu has hit a road block with the government there opposing the plan for laying it through farm fields. Though the Madras High Court has ruled in favour of Gail in a case filed by farmers¡¯ organisations, the Tamil Nadu government is said to be keen on approaching the Supreme Court.