Petronet December quarter net up 30% on demand resurgence

Petronet LNG Ltd, India's largest gas importer, on Friday reported a 30 per cent rise in its December quarter net profit as demand reached pre-Covid levels.

The company's net profit in October-December 2020, stood at Rs 878.47 crore, or Rs 5.86 per share, compared with Rs 675.18 crore, or Rs 4.50 a share, in the same period a year back.

"The strong financial results for the quarter ended December 31, 2020, was achieved due to resurgence of demand to pre-Covid-19 level, operational efficiency and effective commercial planning by the company," Petronet's new Managing Director and CEO A K Singh said on a media call.

Petronet imports natural gas in its liquid form (known as LNG) in ships, converts it back into its gaseous state before sending it out to users such as fertiliser units and power plants who use the fuel to manufacture urea and generate electricity.

India witnessed a demand shrinkage post imposition of a lockdown to curb the spread of coronavirus in end-March 2020. Demand has rebounded with the lifting of lockdown restrictions.

The firm's main liquefied natural gas (LNG) import terminal at Dahej in Gujarat processed 222 trillion British thermal units of gas in the third quarter of the current fiscal, the same as the volume handled a year back.

"The Dahej terminal operated at 97.3 per cent of its nameplate capacity in the quarter while the one at Kochi operated at 19.9 per cent capacity," he said.

With the commissioning of a pipeline from Kochi to Mangalore, Kochi's capacity utilisation will rise to 30 per cent later this year. This after key customers such as Mangalore Refinery and Petrochemicals Ltd (MRPL) and Mangalore Chemicals and Fertilizer Ltd taking the imported gas through the pipeline.

The 5 million tonnes a year Kochi terminal had been operated at a fraction of its capacity due to a lack of a pipeline to take gas to customers. The Kochi-Mangalore pipeline was commissioned a few weeks back.

Singh said city gas units, which supply CNG to automobiles and piped natural gas to households for cooking purposes, along the route of the pipeline will add volumes.

The terminal would reach 80 per cent capacity once the pipeline reaches Coimbatore and Salem in Tamil Nadu, he said.

The company plans to expand its Dahej terminal capacity to 22.5 million tonnes per annum from the current 17.5 million tonnes in phases. In phase-I, the capacity will rise to 20 million tonnes and then to 22.5 million tonnes in the second phase, he said.

Also, the firm is actively looking to set up an import facility at Gopalpur in Odisha and has commissioned studies, he said. "There will be movement on that project."

He however did not give a timeframe for setting up the project.

Singh said Petronet will incorporate a wholly-owned subsidiary company to undertake bunkering, transport and LNG services business.

The unit will be used to expand the firm's business such as setting up of 50 LNG stations on National Highways, he said.

Revenue from the operation was lower at Rs 7,328.23 crore in Q3 as against Rs 8,910.23 crore a year back, reflecting lower gas prices. "We are working to improve efficiency, cost optimization to improve profitability," he added.