GSPL hopes to maintain gas transmission volume at 36 mmscmd

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Gujarat State Petronet Limited surprised the street with a good set of numbers for the first quarter of this fiscal. Tax benefits in its wind-power segment pushed up revenues for the company. Manish Sheth, chief financial officer of GSPL talks exclusively to CNBC-TV18 and highlights the key achievements of the company in the past quarter and shows the way forward.

He is confident of an upward revision in gas transmission tariff going ahead and says that transmission volume will be maintained at 36-37 mmscmd.

Below is the edited transcript of his interview. Also watch the accompanying video.

Q: Your volumes this time have been sequentially up at 36.7 mmscmd, but some of the volumes got shifted from GAIL we hear, is that likely to continue? What's the average quarterly rate you are expecting?

A: There is no shifting of volumes from GAIL . Our volumes have been in this range for past few quarters and we are doing in the same range year-on-year currently.

Q: So you would expect a pro-rata gas volume transmission of around 36-37 mmscmd for the rest of the year?

A: Yes, that's what the range is that we have been doing since last few months.

Q: What about tariffs, how do you see them moving?

A: Transmission tariffs as of now, we have negotiated tariffs, and we are yet to pass on the cost according to new rates. We have submitted our proposal to Petroleum & Natural Gas Regulatory Board (PNGRB) but they have not yet finalized, so our tariffs are same as they were earlier.

Q: That's 0.81 per cubic meter?

A: Yes, that is average that you derive from our numbers.

Q: The big debate surrounding GSPL is what happens once the PNGRB approval comes up. So you think there is going to be a transmission tariff cut? You have 12% IRR, depending on what your capex is, do you think PNGRB will allow you tariffs upwards of 80 paisa?

A: We have been charging very reasonable tariff and our return if you calculate as per the parameters defined by PNGRB, I think we have been sharing with investors that we don't expect any downward revision on our tariffs.

Q: Your proposal I believe has been higher than 80 paisa. Do you think PNGRB will accept that proposal and you will finally have a tariff, which is more than that?

A: We are still to interact with PNGRB on this issue. So I would not be able to comment on this.

Q: On the issue of approval of pipelines in Gujarat, by when do you think that will happen and is that a bit of a concern?

A: No, I think as far as operation of our current network is concerned, necessary approval is already done; it's more of a provisional thing.

Q: How much should we assume as electricity revenues in the rest of the year? In this quarter you seem to have surprised the market with a Rs 4.5 crore gains?

A: Yes, this first quarter is very improved as far as wind is concerned, so first quarter is quite good for wind power. Overall, on an annual basis, the PLF should be around 20-25%.

Q: So Rs 16 crore in terms of revenues from that division in Q1. Would that be the stable state or would you expect a sequential improvement from here?

A: For the full year, we should be in the range of Rs 40-45 crore.