Petronet LNG Ltd has obtained its board’s approval for leasing out its 5-million-tonne-a-year Kochi terminal as a storage facility for international LNG players.
Due to lack of pipeline connectivity, the terminal’s capacity utilisation is merely 1.4 per cent. Only 0.66 trillion British thermal units of natural gas was regasified and sold from the terminal during the first quarter of fiscal 2014-15. The gas was sold to the Kochi Refinery.
“We have approved a proposal for leasing out the Kochi terminal as a storage facility for international LNG players. More than a dozen companies have shown interest to use the facility. We hope to start leasing out the terminal by the third quarter of the current fiscal,” AK Balyan, MD and CEO, Petronet LNG, said on Monday. “Currently, the international gas market is not attractive with lower spot prices. Therefore, the Kochi terminal is an ideal opportunity for international players looking at arbitrage opportunities wherein they store the gas for now and sell later when the market improves,” said RK Garg, Director-Finance, Petronet LNG.
Meanwhile, Petronet has reported a 30 per cent drop in net profit for the first quarter of fiscal 2014-15 on the back of lower margins from LNG imported at the Dahej terminal, Gujarat, and higher depreciation and interest charges for the Kochi terminal.
During the June quarter, the company’s net profit stood at ₹156 crore against ₹225 crore a year ago.
During the quarter, the company’s net revenue stood at ₹10,161 crore against ₹8,444 crore in the corresponding quarter last year.
On Monday, Petronet’s shares closed 3.25 per cent lower on the BSE at ₹179.95.