Will bring gas to Andhra Pradesh by 2014-end: Petronet LNG
15-Jan-2013

In an interview to CNBC-TV18, R K Garg, director-finance, Petronet LNG gives his expectations of the company's performance.

In an interview to CNBC-TV18, R K Garg, director-finance, Petronet LNG gives his expectations of the company's performance. Garg says the Kochi terminal will be commissioned by March end or early April. "Our terminal is getting fully ready for commissioning and the pipeline which is connecting near by Kochi area is also complete," he says.

Below is the edited transcript of Garg's interview to CNBC-TV18.

Q: It was a healthy set of numbers that you delivered this time around but the next trigger for Petronet LNG is the commissioning of the Kochi Terminal. The management has been conservative in its guidance but can you tell us exactly how the volume and the utilisation levels will pan out for the Kochi Terminal both in FY14 as well as in FY15? What kind of targets have you lined out?

A: Yes, the Kochi Terminal is scheduled to be commercially commissioned either by end of March or early April. Our terminal is getting fully ready for commissioning and the pipeline which is connecting near by Kochi area is also complete. The only issue is that the pipeline can only cater to a few customers. The other two pipelines which are connecting to Bangalore and Mangalore regions are currently under construction and there have been some delay on these two pipelines. As per the latest projections, these pipelines could be ready either by the end of 2013 or in early 2014. So, during 2013-14, the volumes will definitely be low and will only meet the requirement of the local consumers in and around Kochi.

Once those two pipelines are ready, then volumes will definitely pickup. We project that the volume would ramp-up in 2014-15 and 2015-16. It will be difficult to share the exact number at this moment. We will be able to give those numbers only when these pipelines are ready for commissioning.

Q: Can you give us an indication of what kind of margin trajectory Petronet LNG can see going forward over and above this 6.3 percent margin that you clocked in this quarter? How will it benefit with respect to higher spot marketing margins? What kind of sustainable marketing margins are you hoping to see?

A: As far as Petronet LNG business model is concerned, we wanted to use more and more our capacity. During the last quarter, we used our terminal around 110 percent on annualized basis. So, our major margins come from our regasification services. Yes, we do have some trading margins when we sell spot volume to the consumers. If we utilise out terminal to the maximum, then our margins will improve.

It is not exactly that we are looking for more and more trading margins, because we are giving more and more capacity. In 2013, we have agreed to provide slots to Gujarat State Petroleum Corporation (GSPC) as well as GAIL India with the idea that our terminal would remain fully utilised.

Q: When is the Dahej capacity expansion expected to be completed by? What kind of capacity do you think you can come about with?

A: We are expanding Dahej currently in two phases. In the first phase, we are building our second LNG jetty which will get completed by the end of December 2013 or early 2014. This would improve our facility by increasing unloading capacity. That would definitely help because it will give more flexibility. The major expansion that we have taken up, increasing the capacity of Dahej nameplate from 10 to 15 million tonnes, would be ready by end of 2015 or early 2016 and we are geared up with these expansions right now.

http://www.moneycontrol.com/news/results-boardroom/will-bring-gas-to-andhra-pradesh-by-2014-end-petronet-lng_808007.html


Source: CNBC-TV18
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