Petronet LNG Reports 9% Increase in Profit, Plans ₹20,685 Crore Investment in Petrochemical Plant.

Petronet LNG, India's largest liquefied natural gas importer, has witnessed a 9% increase in net profit, reaching Rs 855.7 crore for the second quarter of the 2023-24 fiscal year. This growth is attributed to operational efficiency and the higher capacity utilization of its Dahej Terminal.

The Dahej Terminal's utilization rate, which stood at 80% in FY23, has consistently exceeded 90% in FY24. Sequentially, the profit for Q2 FY24 was 4.4% higher than the Rs 819.3 crore recorded in the previous quarter.

However, the state-run company's revenue from operations for the quarter experienced a 21.6% year-on-year decrease, amounting to Rs 12,532 crore. On the positive side, earnings before interest, taxes, depreciation, and amortization (EBITDA) increased to Rs 1,409.13 crore from Rs 1,308.59 crore in the same period last year.

The net profit for the first half of the current fiscal year reached Rs. 1,608 crore, compared to Rs. 1,445 crore in the corresponding period of the previous fiscal year.

In response to these positive results, the Petronet LNG board approved the establishment of a petrochemical plant in Dahej with an estimated cost of Rs. 20,685 crore. The board also endorsed a special interim dividend of Rs. 7 per share.

Dahej in Gujarat is the country's largest single-location LNG storage and regasification terminal. In the fiscal year 2023-24 so far, the terminal has processed 427 trillion British thermal units (tBtu) of LNG, compared to 378 tBtu in the first six months of the previous fiscal year. The overall LNG volume processed by the company in Q2 reached 223 tBtu, up from 192 tBtu in Q2 FY23.

The petrochemical plant is expected to generate revenue from the sale of polypropylene, propylene, propane, hydrogen, and ethane. Additionally, it will leverage the "ColdEnergy" of Petronet's existing terminal at Dahej, enhancing energy efficiency. The project also includes plans for developing a 25-hectare green belt area in the region.

In a move aimed at bolstering the country's self-sufficiency in the petrochemical sector, Petronet LNG is expanding its capacity by 9 million tonnes. This includes 5 million tonnes at its LNG terminal in Dahej and 4 million tonnes at Gopalpur. The Dahej project is expected to conclude by March 2024, while Gopalpur's completion timeline is extended.

During an analyst call, V K Mishra, the head of finance at Petronet, noted that the company is not seeking additional volumes when it renews its long-term LNG deal with Qatar.

BS