Petronet LNG says that commissioning of its Kochi terminal is on track. In an interview to CNBC-TV18, A.K Balyan, CEO and MD of the company said that by mid 2013, the Mangalore-Bangalore section of the pipeline will be ready.
Petronet LNG says that commissioning of its Kochi terminal is on track. In an interview to CNBC-TV18, A.K Balyan, CEO and MD of the company said that by mid 2013, the Mangalore-Bangalore section of the pipeline will be ready. "Capacity utilization should improve post the commissioning of the pipeline," said Balyan.
Meanwhile, the terminal shall have a capacity of 5 million metric tonnes per annum. It will help in meeting enormous demand of natural gas for power, fertilizers, petrochemicals and various other industries in the southern states.
On the company's existing Dahej terminal, Balyan adds that even this terminal is back to full utilisation levels.
Petronet LNG is India's largest importer of liquefied natural gas (LNG) at its Dahej plant. The company recently expanded the capacity to 10 million tonne per annum (equivalent of 40 million standard cubic meters per day or MMSCMD).
Below is the edited transcript of his interview with CNBC-TV18. Also watch the accompanying video.
Q: There has been some concern that your Kochi terminal might have to do with inadequate or very low capacity utilization for quite a while because GAIL's pipeline will not be ready, can you just take us through what your expectations are once the Kochi terminal is fully up and running?
A: We feel that the Kochi terminal should be operating around December-January. The progress is on track, it is as per schedule. Phase I of the pipeline, is being steered by GAIL and it is definitely going to be ready. So this first phase of about 45 kilometers would connect the immediate neighbourhood. We are looking at major consumers like Bharat Petroleum and in fact, one or two other consumers, maybe a power consumer as well.
I think we are looking at commissioning its operation somewhere around January or so. We have to fine tune our exact dates in discussion with GAIL and the readiness of the consumers to receive gas.
But the two major pipelines, one which goes from Kochi to Mangalore and then Kochi to Bangalore via Tamil Nadu would be ready somewhere around 2013 and may take some more time. I believe, now the terminal’s capacity utilization largely depends upon the pipeline connectivity.
I am sure GAIL is working on that. We have jointly reviewed it along with the state government. We sought their help to see the land related issues are sorted out and the state has facilitated quite a bit. So we hope that the pipelines, which are under construction would be able to go further quickly.
In 2013 we surely expect the pipelines to be there and two major consuming centers, Mangalore and also enroute to Bangalore, would definitely take our capacity utilization to much higher levels.
Q: Your last quarter volumes were not great, regasification volumes particularly, are you expecting a significant pick up in Q1?
A: I must point out that in the month of April and partly in May, we had a situation where all of a sudden some five fertiliser plants had gone into maintenance work. They had to shut down and we were not aware of it. Even GAIL and others were not aware. So there was an immediate drop in consumption.
But, we see slowly they have come back on operations. Last month it was up one trend and it has become pretty much normal. We are back to operating over 100% capacity in our Dahej terminal.
Q: What would you be more confident of holding out in terms of a volume target for this year, even for the calendar year?
A: I feel the trends, the demand scenario is pretty much similar to last several months. We feel this trend may continue and we are hopeful that we should be operating Dahej at more than 100% capacity. Our expansion plans for Dahej is also going on right now.
Q: Apart from the Kochi-Bangalore pipeline, what other expansion plans do you have lined up for the next six months and going into the next year?
A: Our first priority is ofcourse to see that Dahej plant, which operates over 100% capacity is expanded. We don't want to get into a capacity constraint there. We have completed the field work that is the frontend, engineering and design work is going on right now. We hope to finish it in maybe another one and a half months.
Then we would like to quickly go and see competent contractors coming into regasification facilities as also additional tankage. Our marine facilities for the second jetty is already under construction. I think, for us, this is a top priority project and we hope to perhaps have the marine facilities completed somewhere around 2013.
It would give us little leeway to go from beyond the present capacity utilization and then once the regasification facilities come in, we expect a quantum jump upwards, in terms of our capacities.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.