Petronet LNG to invest Rs 1,100 crore in Dahej ramp-up to 17.5 mtpa

Petronet LNG registers highest-ever quarterly profit of Rs 263 crore…

Petronet LNG said on Friday it was looking to expand its Dahej terminal in Gujarat by another 2.5 million tonne per annum (mtpa), taking the total capacity to 17.5 mtpa. The terminal is currently being ramped up from 10 mtpa to
15 mtpa.

“The idea is to probably take up the additional 2.5-mtpa expansion along with the undergoing expansion programme that is to be completed by November 2016,” said AK Balyan, managing director and CEO, Petronet LNG.

The expansion from 15 mtpa to 17.5 mtpa would cost Rs 1,000-1,100 crore, Balyan told mediapersons, adding that the firm’s board has given its go-ahead for a detailed study on the matter.

Already, companies including HPCL have expressed interest in booking capacity in the terminal. During the July-September quarter, the Dahej terminal operated at 117% capacity. Further expansion will require one more tank and re-gassification facilities. At present, Petronet has four storage tanks and two more are being built as part of expansion to 15 mtpa.

In addition, Petronet has leased storage at the Kochi LNG terminal to UK’s BG Group, which will import one cargo, store it at Kochi and take it out in January. Also, the company is now sending LNG via trucks to some customers. With robust cash flows, Petronet repaid Rs 1,032-crore of rupee loans by raising lower cost unsecured debt via Rs 1,000-crore bonds. With replacement of this rupee loan, the effective borrowing cost has come down to under 10%, Balyan explained.

On Friday, Petronet LNG reported its highest ever quarterly net profit on the back of higher trading margin. Profit after tax during July-September increased 44.5% to Rs 262.81 crore (or Rs 3.5 per share) against Rs 181.75 crore (or Rs 2.42 a share) in the corresponding quarter last year. Sales were up over 15% year on year to Rs 10,979.96 crore in the second quarter.

“The main reasons for the jump in net profit were higher volumes of imports and higher trading margin on spot and short-term cargo at the Dahej terminal,” Balyan said.

Petronet’s other 5-mtpa terminal at Kochi operated at just 2%. Meanwhile, Petronet has received all approvals for a 5-mtpa greenfield terminal at Gangavaram in Andhra Pradesh. The state government will also pick up a small stake in the project.

Petronet said it adopted new rates of depreciation with effect from April 1, 2014, which resulted in a lower provisioning of Rs 66.41 crore this fiscal.

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First published on: 08-11-2014 at 00:05 IST