Petronet LNG held a conference call on 10 November 2021 to discuss the results for the quarter ended Sep'21 and way forward. Mr V K Mishra - Director (Finance), Mr Rakesh Chawla - GGM & President (F&A), Mr G K Sharma - CGM & VP (Marketing), Mr Debabrata Satpathy - GM (F&A), Mr Vivek Mittal - GM (Marketing) and Mr Ashwani Agarwal - Manager (F&A) of the company addressed the call.

Highlights of the Concall

• Dahej terminal volume was 225 thousand btu (TBTUs) in Q2FY22 as against 194 TBTUs in previous quarter and 243 TBTUs in corresponding previous year quarter

• Total volumes during the quarter was 240 TBTUs including Dahej and Kochi terminal as against 209 TBTUs in previous quarter and 254 TBTUs in corresponding previous year quarter

• Total volumes during H1FY22 was 449 TBTUs as against 444 TBTUs in H1FY21

• Current LNG prices are exorbitantly high. This has in fact discouraged the people to bring in spot cargo to India. The future outlook is not very good in the sense that LNG prices are still very high and winter has already set in. As a result demand would further increase in Europe, Japan and China. The company expects prices to come down after winter season.

• The company never anticiapated that LNG prices would go around US $50-60 per mmbtu. Current LNG prices is around US $ 30-38 per mmbtu

• Current LNG prices are not sustainable because at this price LNG consumption cannot be enhanced.

• Post winter season the company expect LNG prices to be around US $ 6-10 per mmbtu which will result into more sport cargoes in India.

• The company is not impacted by these high LNG prices as it is mostly into long term contract. Only impact would be in lesser number of spot cargoes

• There is plenty of LNG available in the market. Higher prices is due to higher demand from European countries, Japan and China for heating purpose in winter season

• Dahej capacity utilisation was 99% during the quarter compared to 82% in previous quarter.

• The company has already placed an order for construction of two LNG tanks at Dahej at a cost of Rs 1200 crore. The company expects to complete these projects in 14 months from now.

• The company plans to go to the board for approval of the construction of jetty at a total capex of around Rs 1700 crore.

• The company plans to expand Dahej terminal from 17.5 mmtpa to 20 mmtpa in first phase and in the second phase from 20 mmtpa to 22.5 mmtpa. The first phase will be costing very less because it will be only requiring some de-bottlenecking by spending Rs 200- 250 crore. The second phase expansion would cost around Rs 700- 800 crore. These projects would take around 3 years to complete from now.

• The company is in discussion with authorities towards east coast LNG terminal with capacity of 3-44 mmtpa at a cost of around Rs 1900 crore

• Kochi terminal capacity utilisation is around 20-25% and expects it reach 30-35% very shortly but only problem has been the higher prices of gas.