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Petronet LNG raises operating rates in Apr-Jun
Indian state-controlled importer Petronet LNG raised operating rates at its 17.5mn t/yr Dahej terminal to more than 96pc in the April-June quarter because of lower LNG prices,
The rise comes after the facility — India’s largest LNG import terminal — operated at around 76pc during January-March, and at 87pc in April-June 2022, chief executive Akshay Kumar Singh said at an earnings call on 31 July.
Petronet expects domestic gas demand to rise as spot LNG prices remain lower. It sees LNG prices hovering in the range of $10-12/mn Btu, which “is quite affordable as compared to long-term contract prices” Singh said adding that he expects volumes to go up further in the coming months.
Dahej processed 217 trillion Btu (4.4mn t) of LNG during April-June, as against 172 trillion Btu in January-March and 196 trillion Btu during April-June 2022. It processed 704 trillion Btu of LNG over the April 2022-March 2023 fiscal year, while total LNG imports were 752 trillion Btu, lower by 11pc from a year earlier.
Utilisation at Petronet’s 5mn t/yr Kochi facility continued to be capped at around 20pc, with volumes of 13 trillion Btu. Overall throughput at Dahej and Kochi was at 230 trillion Btu during April-June, with throughout up by 24pc from the previous quarter and by 11pc on the year, company officials said.
Petronet is “seriously engaged” in discussion with QatarEnergy to extending its 8.5mn t/yr long-term contact beyond 2028, Singh said, adding that the deal is likely to be finalised by December.
The firm has also been exploring the possibility of more long-term deals, but has been cautious as the market continues to remain tight and as most contracts have very high slope currently.
Petronet at present buys LNG from QatarEnergy at a price based on a slope of about 12.67pc of Ice Brent, plus a fixed charge of about 50 cents/mn Btu.Petronet hopes to raise its offtake by 0.75mn-1mn t/yr to 9.25mn-9.5mn t/yr in its negotiation with Qatargas to renew their existing contracts. The company also aims to commission its third LNG import terminal, a 4mn t/yr floating storage and regassification unit (FSRU) at Gopalpur in eastern Odisha state by the middle of 2026.
It would consider building a land-based terminal if FSRU prices are high because of strong European demand, Singh said on 31 July. He said the cost of building an FSRU is 2.3bn rupees ($28mn) as against Rs50bn for a land-based import terminal. But Singh said he hopes that FSRU prices will fall in three years as Europe is working on alternative sources of energy.
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