Petronet LNG second quarter net down 5.3% on lower volume off-take by buyers

Total income also dipped 31% to Rs 7,580 crore

Petronet LNG Ltd (PLL), the state-run Liquefied Natural Gas (LNG) importer, today reported a 5.3% decline in net profit for the quarter ended September 2015 as lower spot market prices led buyers to cut down long-term offtake. The company posted a net profit of Rs 248 crore during the quarter as compared to Rs 262 in the corresponding quarter.

"The primary reason for this decline in profit over corresponding quarter last year is lower recovery of costs on account of reduced offtake under the long term gas supply contracts with the offtakers," the company said in a press statement. The high price of LNG under the long-term contract has led to users in fertiliser and power industry switching to alternate fuels like naphtha and fuel oil.

The offtake of R-LNG under long term sales contracts with off-takers was around 68% of the quantity planned for in the nine months ended 30 September against the agreed annual plan for the calendar year 2015, leading to lower offtake of LNG by the company under its long-term supply contract with RasGas of Qatar, Petronet said in a statement to the Bombay Stock Exchange (BSE).

It added any take-or-pay obligations would be determined after the close of the calendar year. At present, LNG from Qatar is priced at close to $13 per million British thermal unit as compared to the spot price of $6-7 per mmbtu. The company is understood to be working to mitigate the impact of the higher prices under the long-term contracts.

Total income of the company during the second quarter ended September also dipped 31% to Rs 7,580 crore as compared to Rs 11,015 crore in the same quarter last fiscal.

Petronet LNG said, despite a reduction in the offtake under the long term quantities, the Dahej terminal in Gujarat regasified 154 thousand British thermal units (TBTUs) during the quarter -- highest ever quarterly volume processed by the firm. Its Kochi terminal, however, handled only 2.70 TBTUs of LNG.

The company informed it plans to complete the expansion of Dahej terminal from 10 million tonne per annum (MTPA) to 15 MTPA by end 2016, adding it has initiated the process for selection of Engineering, Procurement and Construction (EPC) contractors for further expansion of the Dahej terminal to 17.50 MMTPA.