Expect GAIL to award remaining Kochi- Mangalore pipeline spread soon: Petronet LNG
In an interview to CNBC-TV18, Prabhat Singh, MD & CEO and RK Garg, Director-Finance at Petronet LNG spoke about the results and gave their outlook for the company.
Petronet LNG posted a weak quarter with a drop in volumes. However, the blended tariffs were higher than expected and the news of the 1:1 bonus really cheered the investors.
In an interview with CNBC-TV18, Prabhat Singh, MD & CEO and RK Garg, Director-Finance of the company spoke about the results and their outlook for the company going forward.
Below is the verbatim transcript of the interview.
Latha: Your comments on the numbers. Look weak on volume front. Are you happy with the performance?
Garg: We are happy to announce that the company has achieved highest ever profit during the year 2016-17. This year the profit of the company, the profit after tax is Rs 1,706 crore as compared to last year we achieved Rs 913 crore. So there is an increase of 87 percent over previous year’s profit. Hence, same situation is there for quarter ended March 31, 2017 where we had Rs 471 crore profit as compared to Rs 245 crore in the corresponding period which is an increase of around 92 percent. Therefore, we are happy to announce that highest ever profit in a quarter and higher ever profit in any financial year.
Anuj: A word on volume growth and also how are the operations ramping up at Dahej?
Garg: This could be achieved only through increase in the capacity. Dahej plant has operated on an average capacity utilisation of increased capacity on an average around 106 percent of the terminal. We expanded Dahej to 15 million tonne. It was expanded in two tranches in August and September. So if you take an average capacity of the terminal, utilisation is more than 100 percent which is close to 106 percent. Overall it’s a satisfying year for Petronet and its shareholders.
Sonia: You mentioned volumes were better due to Dahej but can you share some numbers with us in terms of what can we expect as we head into next couple of quarters?
Garg: The physical volume that the company has achieved during this financial year, the total quantity at Dahej is 714 trillion British thermal units (tBtu) and if we take company wise because Kochi terminal is also included then it is 728 tBtu. So if we compare with the previous year, the previous year was 566 tBtu as compared to that that we have increased the volume. At Dahej it is 714 tBtu.
Latha: Can you share the status of Kochi pipeline. Have the contracts been tendered?
Singh: The pipeline to the Mangalore side has got four spreads and they have awarded three spreads out of that. So out of 440 kilometers of pipeline, they have awarded nearly 330 plus. So it is only around 100 km plus which is left to be awarded and that too Gail should be in a position to award this by end of June or beginning of July.
We are also starting work on the Bengaluru sector, the Tamil Nadu part which is dormant now, so we are starting work on that as well.
Anuj: What are the spot prices right now and how do you see them impacting your operations?
Singh: Right now the spot prices are hovering around USD 5.5-6 per mmbtu and the impact is that these prices are lower than the long-term prices. Therefore, the off-takers are in a sort of situation where their customers are trying to take spot gas and leave away long-term gas but by and large till now we have been able to maintain the supplies and the off-takers are also maintaining it but no doubt that at this point of time the spot prices are cheaper than that but since the oil prices are also going down because they have come down to 47-48 now, so even the long-term prices are coming down because the formula suggests that as and when the prices of oil are going to go down, it will improve better and it will be closer to the spot prices.