Kochi terminal to be completed by March 2013: Petronet

RK Garg, director finance of Petronet, says that as far as Petronet is concerned, our Kochi terminal is likely to be fully completed by March 2013. It would be connected to the phase I pipeline which is being completed by GAIL.

Also read: Diesel price-hike good; aid LPG cap hike with price: BPCL Below is the edited transcript of his interview to CNBC-TV18. Q: We saw positive statements from the Kerala CM on the positive work on phase II beginning now as Gas Authority of India Limited (GAIL) has started compensating the land owners. How fast do you think this issue will progress and any time line about phase I. Do you think it is on track for March 2013?
A: As far as Petronet is concerned, our Kochi terminal is likely to be fully completed by March 2013. It would be connected to the phase I pipeline which is being completed by GAIL. In Phase I pipeline, the only problem is that there are limited consumers and is more dependent on increasing the throughput from Kochi liquefied natural gas (LNG) terminal is connected to phase II pipeline.
GAIL has been trying to connect the Bangalore market through two separate pipelines but there are some delay due to some right of user (ROU) and similar approvals. Q: What do you think is the timeline for phase II and therefore what is the timetable you will draw for the Kochi terminals capacity utilization, how much money will it make in FY14 and FY15?
A: As per the plan, the Kochi phase II pipelines are likely to be completed by the end of 2013 which has been indicated to us. As far as the first phase is concerned, since it is ready, we will start in minimum throughput once the terminal is completed and consumers are ready.
Any new terminal takes at least two years for ramp-up, in this case it may take a little longer as the pipeline is not fully connected through this pipeline. So, if it is completed by the end of 2013 or early 2014 then the throughput definitely would increase. Q: For the 5.2 percent stake do you think Qatar Petroleum is emerging as a front runner; the other PSUs that have the stake will forgo their Right of first refusal (ROFR)?
A: It is an issue between the promoters and the seller. Company is not directly involved and the matter would get resolved as Asian Development Bank (ADB) is right now holding 5.2 percent stake. They have desired to divest and the matter is being discussed with the promoters. Q: Any possible timeline that you could indicate, do you think it is possible in this quarter itself?
A: They have been trying to divest for quite long so the matter is pending in any case. It will not affect Petronet since it is a secondary market sale. So, it is not really connected with us.
Q: What will you do by way of revenues in the current year? Could you indicate what you have done in terms of spot cargos this year?
A: In spot cargo, the Dahej terminal currently is also operating beyond 10 million tonne. Of late spot prices have moved up due the winter season.  Prices have also moved up due to global demand. Q: Is that an indication that in Q3 we have done slightly lower in terms of spot cargos?
A: We are already doing beyond 10 million tonne. Q: We are at the last stage of this quarter, how many the company has done in this quarter? Would you do Rs 27000-27500 crore in the current year and Rs 30000 crore next year by way of revenues?
A: The turnover is not a barometer to judge the usage of capacity. The turnover is a matter of price. The only barometer is that we are using our terminal at the optimum capacity, we are operating at beyond 10 million tonne.