As part of the deal between ONGC and the Karnataka government, ONGC plans to set up an LNG terminal and a gas pipeline from Mangalore to Chennai via Hassan and Bangalore.

In a strong statement Aiyar said, “[I fault] ONGC for committing a humungous amount in non-core areas and the Karnataka Government for putting all its eggs in the ONGC basket [because] it [is] important for ONGC to invest in the discovery of natural gas to fuel the country’s future rather than sink Rs 25,000 crore (US$5.5 billion) in the SEZ.”

“ONGC must make available through itself all resources that are optimally required for finding more gas and more oil, which is the primary charge placed on it. Pipelines for gas and oil, petrochemical plants, electrical utilities are all very important for the growth of Karnataka but these are not necessarily the points of growth for a corporation whose core competence is exploration of gas.

“There [is] GAIL (Gas Authority India Ltd) to lay the pipeline, Petronet to set up the LNG terminal, while a downstream refining company [will] be a better partner to run the SEZ in Mangalore,” he added.

It is understood the Minister is keen on a SEZ which encompasses his Ministry and the state-run firms which operate under his auspices. According to Aiyar, “I think some rethinking is required. We don’t want to put the project in jeopardy but find a more optimal way of investing in it [and] I’m offering the services of all the corporations in my sector.”