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Last Updated : May 09, 2012 03:40 PM IST | Source: CNBC-TV18

Always believed PNGRB had no control on LNG: Petronet

"We have always maintained that the present empowerment of the regulator does not give them the option to look into these aspects. We are happy that the things have moved ahead and the industry is welcoming the situation, "Dr A Balyan CEO & MD of Petronet LNG told CNBC-TV18.


Oil regulator PNGRB refused to fix the marketing margin that firms could charge on sale of natural gas, saying it does not have powers to regulate the fuel.


"We have always maintained that the present empowerment of the regulator does not give them the option to look into these aspects. We are happy that the things have moved ahead and the industry is welcoming the situation, "Dr A Balyan CEO & MD of Petronet LNG told CNBC-TV18.  


It is learnt from souces that the petroleum and natural gas regulatory board (PNGRB) wrote to the Oil Ministry last week, saying it cannot decide on the marketing margins as natural gas as a product has not been formally notified by the government for adjudication by the Board.


However, Balyan added that the company has hardly any exposure on marketing margins.


"Our earnings are from regasification, which is back to back almost 100% of our volume, so we are not affected by any margin thing like Indraprastha Gas (IGL) which has compression, transportation and other charges on that," he elaborated.


Below is the edited transcript of Balyan’s interview with CNBC-TV18. Also watch the accompanying video.


Q: The market like the fact that your marketing margins will not be capped at least as of now, do you take it as a victory or do you think there is still a possibility that the government will look at amending the Petroleum and Natural Gas Regulatory Board (PNGRB) act and try and come back and re-impose marketing margins on you?


A: We have always maintained that the present empowerment of the regulator does not give them the option to look into these aspects. We are happy that the things have moved ahead and the industry is welcoming the situation.


As far as Petronet LNG is concerned, we have again maintained that regasified liquefied natural gas (LNG) would not fall under the domain of the regulator. The only empowerment as far as LNG terminals are concerned is that the regulator can register the new LNG terminal not even the earlier ones.


We give most of the quantity of LNG back to back to our three major offtakers so we don’t do any retailing. We have always maintained that this kind of controversy would have insignificant impact on Petronet as such, but as a situation the industry has welcome this. They are back to normal and we see the impact in the share market.


Q: What about the issues of the PNGRB regulating LNG terminals and having some say over that 33% that you sell?


A: They are in the process of finding out what can be done in terms of LNG terminal and they are in the learning process as to what has been done worldwide. The criteria so far the empowerment clarifies, new terminals need to be registered with the regulator.


What should be the eligibility for registering what our requirements that aspect is being looked up into by regulator. They may come up with some kind of recommendation that the fresh LNG terminals maybe registered with the regulator.


Q: Do you think we have bought status quo for a few months or do you think it’s an active consideration of the government that gas be notified and this risk hangs over your company?


A: We maintain that we have hardly any exposure on the marketing margins. Our earnings are from regasification, which is back to back almost 100% of our volume, so we are not affected by any margin thing like Indraprastha Gas (IGL) which has compression, transportation and other charges on that.

As far as registration is concerned, it is one time kind of an activity which regulator would like to see what size of terminal should be registered. Registration is just one process, one time activity. I don’t think there is anything more than that in this.



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First Published on May 9, 2012 10:51 am
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