Dahej plant volumes to rise to 20 MT in FY18: Petronet LNG

An expansion of Petronet LNG's Dahej plant has been commissioned in August 2017. It is currently operating at a capacity of almost 100 percent and is currently producing volumes of around 19 million tonnes. Due to the expansion, the MD and CEO of the company, Prabhat Singh, sees volumes from the Dahej plant rise to 20 million tonnes in FY18.The Q3 earnings of the company came in line with estimates with volumes being a big positive. But the profit after tax fell by 13.5 percent quarter-on-quarter due to a lower effective tax rate.Below is the verbatim transcript of Prabhat Singh’s interview to Latha Venkatesh, and Sonia Shenoy on CNBC-TV18. Latha: Let us take the volumes first, that was a positive surprise. What are the expectations from the Dahej plant in terms of volumes next year in FY18? A: The volumes have been good because this is in general a very good time for a buyers’ market for gas because gas by and large is being sold at lower prices and therefore India being a great sync for LNG, we have been able to manage more and more volumes into India. At this point of time as I am speaking to you, the plant expansion was commissioned in August and we have shot up to consuming nearly or utilising nearly 100 percent of the capacity. The last quarter, it is 98 percent which we have utilised. So, as of today, I feel that the volumes which are going to be by the end of this financial year around 19 million tonne, should be either a million tonne plus or minus, not minus, it could be plus, in the next coming year. So, volumes are not going to be too high but there would be a shade difference and we will be able to maintain our more than 100 percent capacity utilisation of the Dahej terminal. Latha: 19 million tonne this year and next year anything between 18 and 20? A: I would suggest you keep it around 20 million; it will be a shade higher. Sonia: Should we expect any tariff hikes at Dahej anytime soon? A: Tariff hikes normally happen January 1. So, whatever 4-5 percent is there, they have already been done. So, this year whatever is the tariff will remain throughout the year. Sonia: What about natural gas prices on the whole in India, is there an expectation that the prices could go up say over the course of next couple of months? A: The domestic gas pricing is linked to an indices and there is an indication that there may be say around 20 cents higher price which will come. So, today if it is USD 2.5, it may come up to USD 2.7 per mmbtu. So, that is linked to the indices which include UK, US, Canada, Russia, etc and it will throw up this number. Latha: That is on April, right? A: April 1.