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On Friday, Petronet LNG Ltd reported a 10% rise in first-quarter net profit on processing larger volumes of imported fuel. In the Q1 Net profit at Rs 700.9 crore compared with Rs 635.67 crore in the same period a year back, Petronet CEO A K Singh, media reported. Mainly, liquefied natural gas (LNG) is raised import terminal at Dahej in Gujarat and processed in larger volumes. The turnover of the company had reported the highest f Rs 14,264 crore in the quarter as compared with Rs 8,598 crore in the same period of last year.
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“During the quarter ended June 30, Dahej terminal processed 196 trillion British thermal units (TBTU) of LNG as against 194 TBTU processed last year,” he said. “The company was able to achieve robust financial results despite high LNG prices, owing to optimization in its operation,” he noted.
Further, Singh said Petronet is not buying any volumes from the spot or current market as all its LNG supplies are tied-up in long-term contracts with nations such as Qatar.
LNG prices on the spot market have jumped to $45 per million British thermal units from $20 in mid-May and USD 25 in mid-June due to geopolitical reasons, he added. The rates are three times the price at which LNG on long-term contracts was bought. Spot prices are unlikely to come down as demand in Europe for winter heating picks up. “If prices continue in this fashion, to sustain existing consumption (of LNG) is a challenge. We don’t foresee growth (in consumption) will start,” he said.
While some sectors may be able to absorb high-priced feedstock (gas or LNG), others such as power and fertilizer are price sensitive. Gas at $8-10 per mmBtu price can compete with coal, which is the mainstay feedstock for generating electricity, but not anything above that, he said.
