New LNG jetty at Dahej to be completed by Q1FY14: Director(Finance)

In an interview with ET Now, RK Garg, Director Finance, Petronet LNG, talks about the capacity expansion at Dahej and Kochi. Excerpts:

ET Now: Fill us in on the capacity expansion plans that you have at the jetty at Dahej.

RK Garg: Yes, second LNG jetty at Dahej is already under construction and as scheduled, we are expecting that jetty would be completed by the 1st quarter of 2014. When this jetty is ready, we would have an ability to unload more LNG ships and the current constraint of the slots that we face sometimes that would not be there. So with the second jetty becoming operational, it will give a lot of flexibility to us and we will be able to use our re-gasification capacity more optimally. We will be able to do a little better than what we are doing today, though it is already more than 10 million tonnes we are operating.

ET Now: So how much investment would this entail in terms of the expansion and how are you planning to fund it? .

RK Garg: The second jetty's cost is around 1000 crore. However, as you are aware we are already in a mode for expanding Dahej further by putting two more storage tanks and the regas capacity. It will take the nameplate capacity of Dahej to 15 million tonnes and this additional investment for Dahej expansion for storage tanks and regas would cost of around 3000 crore. So we wanted to fund it out of our internal resources and also borrowing from the domestic as well as international lenders. Process is already on and we expect the completion of our expansion by early 2016 at Dahej.

ET Now: You are talking about capacity expansion. What about the expansion at Kochi? We believe it was witnessing some delays. How is that progressing?

RK Garg: Kochi is a greenfield project. From our side, the project is more or less complete and we are now ready for taking the first shipment in the next few months' time. Delay is not account of facility. The 'delay' you have been hearing is about the second phase of the pipeline which would connect Kochi to Mangalore and Bangalore via Tamil Nadu. The first phase of pipeline of around 44 kilometre within Kerala is ready and we will start supplying to those consumers who are connected right now. However, the full capacity of the Kochi terminal could be used when this is connected to other pipelines and ultimately connected to the grid. So we are facing a little delay on that account, but I have been told that these pipelines are likely to be ready by the first quarter of 2014. So it is a matter of around one year from now.

ET Now: What kind of utilisations are you currently operating at and what is going to lead to this kind of expansion? Which clients of yours are keen on higher imports as well from you?

RK Garg: Currently, Dahej is a 10 million tonne terminal and we are operating around 10 million or even beyond 10 million. Last year we did 107%. So once this expansion is ready after the second jetty and additional storage tanks and regas, we will take Dahej to 15 million tonne and particularly Dahej is already connected to all the major pipelines within the country and the transmission of gas is not a problem there. Plus consumers are already connected to those pipelines. So utilisation of Dahej would be not an issue as we see forward.

Source: ET Now
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