Petronet LNG Oil Drilling And Exploration stock Petronet LNG

Petronet LNG Ltd (updated - 02 Feb 2012)
Petronet LNG posted better than-expected results for Q3, as dwindling domestic production of gas forced consumers to import more.

The company is looking forward to higher capacity utilisation of its Dahej terminal, completion of Kochi terminal by end2012 and is contemplating a third import facility on the East Coast. The results underlined the robustness of its business model and make a case for brokerages to upgrade target prices.

Petronet’s Q3 natural gas volumes were 21% higher at 144.93 trillion British thermal units (tBtus), or equivalent of 45.1 million standard cubic meters per day (mmscmd). Historically, this was the company’s highest re-gasification volume for any single quarter, which was made possible by a capacity utilisation of 11 5% - the first ever at its Dahej plant. There are some concerns, particularly with Gail’s Dabhol LNG terminal, expected to commence in mid-2012, and spot LNG prices staying high, that Petronet could face pressure on volumes and margins.

Similarly, the sector regulator’s (PNGRB) review of marketing margins of gas companies could keep the scrip under pressure till further clarity. However, Petronet’s management has hinted at maintaining volumes in the quarters ahead. It also took the annual 5% hike in re-gasification charges to Rs 35 per mmBtu.

Petronet is looking forward to its 5-mt per annum LNG import terminal at Kochi. Initially, it will run the terminal with spot cargoes till the contracted import volumes begin in 2014 from Gorgon in Australia. This project will help it receive Rs 80 per mmBtu at Kochi against Rs 35 at Dahej.
Source - Economic Times

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