India's state-run LNG terminal operator Petronet LNG has called its regasification tariff as "reasonable" at its 17.5mn t/yr Dahej terminal on the west coast after consumers' concerns that the firm was charging one of the highest rates in the world, it said in a press conference.
Petronet charges 62.91 rupees/mn Btu ($0.75/mn Btu) to regasify the fuel received at its Dahej terminal, the country's largest such facility, with plans to increase it by 5pc every year.
But the firm also expects an "upward revision" to the rates going ahead, it said in a separate analyst call on 24 October.
The tariff is part of the contractual obligation of capacity booking of customers, the management said, adding that the demand for natural gas in the country is not determined by regasification charges, but instead driven by international gas prices.
"Even if you tweak it by 5pc or 10pc, that is not going to change the consumer pattern of natural gas," chief executive officer Akshay Kumar Singh said in the press conference.
The higher tariff at Dahej terminal also compensates for lower capacity utilisation at Petronet's 5mn t/yr Kochi terminal, the board explained.
The Kochi terminal has kept its capacity utilisation below 25pc since its commissioning in 2013, but the board expects the situation to improve in the coming years as the 16mn m³/d Kochi-Bangalore pipeline comes online by March 2025.
Additionally, the country's gas regulatory board Petroleum and Natural Gas Regulatory Board (PNGRB) plans to lay a new pipeline south from Kochi, it announced in a separate statement issued on the same day. The bidding for the pipeline closes on 18 February 2025, the regulator added.
The new project will take years to be ready, Petronet CEO Akshay Kumar Singh said in the earnings call.
The southern 425-km long Kochi-Kanyakumari-Thoothukudi gas pipeline would be the crucial link between Petronet's Kochi and state-run refiner Indian Oil 5mn t/yr Ennore LNG import terminal, according to the pipeline regulator.
The proposed pipeline, which has an initial capacity of 6mn m³/d, will begin from the southern state of Kerala before entering the neighbouring state of Tamil Nadu, where Indian state-controlled refiner IOC's Ennore facility is located. The pipeline will enhance the availability of natural gas in the southern part of the country, further supporting the development of the city-gas distribution business in the region, the regulator added.
Most of the country's existing gas pipeline infrastructure is in the western and northern parts of the country.
Kochi LNG has a 1.44mn t/yr long-term agreement for LNG from Australia's Gorgon LNG project. It may sign more term contracts for the fuel once the pipes are laid.
Capacity expansion plans
Petronet remains committed to commissioning the expanded 5mn t/yr capacity addition at Dahej, Singh said, adding that this would take the entire capacity of the terminal to 22.5mn t/yr by March 2025.
Petronet commissioned two storage tanks, each with a capacity of 180,000 m³ at Dahej in September, taking the total to eight storage tanks. The company is also in the process of building a 2.5km jetty that can accommodate Q-Max LNG tankers as well as receive propane and ethane beside LNG, Singh added.
Petronet also plans to build a new 5mn t/yr import facility in Gopalpur on the east coast, with commissioning expected by 2027, Singh said. The company is in the final stages of acquiring land from the Odisha state government and has sought bids to build a jetty, Singh said. It had previously planned for a 4mn t/yr floating storage and regasification unit but had to abandon the idea after demand for the units rose following Europe's LNG terminal capacity additions to compensate for cuts in Russian gas supplies.
