Ltd, India’s largest liquefied natural gas importer, on Friday reported a 10 per cent rise in first-quarter net profit on processing larger volumes of imported fuel.

Net profit in April-June at Rs 700.9 crore compared with Rs 635.67 crore in the same period a year back, CEO A K Singh said on a media call.

The rise was mainly because its liquefied natural gas (LNG) import terminal at Dahej in Gujarat processed larger volumes.

“During the quarter ended June 30, Dahej terminal processed 196 trillion British thermal unit (TBTU) of as against 194 TBTU processed last year,” he said.

The company reported the highest-ever turnover of Rs 14,264 crore in the quarter as against Rs 8,598 crore in April-June 2021.

“The company was able to achieve robust financial despite high prices, owing to optimisation in its operation,” he noted.

Singh further said 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 USD 45 per million British thermal unit from USD 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 fertiliser are price sensitive.

Gas at USD 8-10 per mmBtu price can compete with coal, which is the mainstay feedstock for generating electricity, but not anything above that, he said.

Singh said during April-June, the Dahej terminal operated at 87 per cent of its rated capacity of 17.5 million tonnes per annum.

Petronet, he said, is in discussions with RasGas of Qatar for extending the existing long-term contract beyond its expiry in 2028.

“Qataris are expanding LNG production capacity from 77 million tonnes per annum to 114 million tonnes. There is a huge capacity available beyond 2025-26. There is no dearth of available of LNG beyond 2025-26,” he said. “We are in serious discussions with Qatar for extending the contract.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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