Petronet on strategic partner hunt for Gangavaram project

Expansion of Dahej terminal to 15 MT from current 10 MT will complete by December 2016

Petronet LNG Ltd (PLL) today said that the company may bring in a strategic partner for its upcoming Rs 5000-crore Gangavaram LNG terminal in Andhra Pradesh. The special purpose vehicle has the provision to offer stake to a strategic partner in the 10 million tonne terminal.

“We would about 74% of the equity with us. About 8% of equity would be with Gangavaram port, while we are open to bring in a strategic partner who can take a share of about 10 to 15% of the remaining 18% or even the full remaining stake. The partner can bring in technological support and can also be helpful in sourcing LNG and we are already in talks with some of them,” said A K Balyan, Managing Director and chief executive officer, Petronet. The company is set to short-list potential EPC contractors for the project by November.

Balyan added that the expansion of its Dahej terminal to 15 MT from the current 10 MT will complete by December 2016.

“Pre-qualification bid of EPC contractors has been made and efforts are afoot to award the contracts in the next couple of months. We have already achieved financial closure for the expansion project by signing a 12-year rupee term loan of Rs 2,250 crore with State Bank of India and HDFC Bank.

The Greenfield Kochi terminal is expected to be commissioned on August second week. However, initially the capacity utilization from the project wouldhave a capacity utilization of only 7-8%, which would be ramped up by mid next year, once the GAIL pipelines are in place.

Meanwhile, the net profit of the company for the first quarter ended on June 30 this year stood at Rs 225 crore, down 17% from Rs 271 crore during the same period last financial year. During the quarter, the company has operated at 102% capacity at its Dahej terminal. Total volume regasified during the quarter was 129.5 TBU leading to a turnover of Rs 8,444 crore, a 20% increase from last year.

“The decrease in net profit is mainly on account of lower margins and increase in internal consumption in plant,” he added.