Petronet to invest ₹40,000 cr to expand import capacity

THE COMPANY IS MAKING A FORAY INTO THE PETROCHEMICAL BUSINESS BY INVESTING ₹12,685 CRORE

GOA: Petronet LNG Ltd, the operator of the world’s largest liquefied natural gas (LNG) import terminal, will invest ₹40,000 crore in expanding import capacity and petrochemicals with a target to treble net profit by 2028, its CEO A K Singh said.

Petronet is making a foray into the petrochemical business by investing ₹12,685 crore in a propane dehydrogenation plant that will convert imported feedstock into propylene, as well as setting up an LNG import facility at Gopalpur in Odisha at a cost of ₹2,300 crore, he told reporters on the sidelines of India Energy Week (IEW) here.

The firm, which this week extended a deal to import 7.5 million tonnes (mt) a year of LNG from Qatar by 20 years, is also looking at investing in overseas projects such as a floating LNG terminal at Colombo in Sri Lanka. “We have charted a 1-510-40 strategy—increasing turnover to ₹1 lakh crore in 5 years with a net profit of ₹10,000 crore from investing ₹40,000 crore in expansions,” he said.

The strategy started two years back and is for the period up to 2027-28.

Petronet currently has a turnover of ₹55,000-60,000 crore and an annual net profit of ₹3,200 crore.

It operates a 17.5 million tonnes-a-year flagship import terminal at Dahej in Gujarat and another 5 million tonne facility at Kochi, Kerala.

Singh said the company is hoping to start shipping LNG in containers to Sri Lanka in the next 18 months and is looking to set up an import terminal at Colombo port in five years. LNG is natural gas cooled to -162°C to turn it into a liquid for ease of transportation via ships. India’s domestic natural gas production barely meets half the demand of the power, fertiliser and CNG (compressed natural gas) sectors and the rest is imported in the form of LNG.

Singh said Petronet will invest ₹600 crore in raising the capacity of the Dahej LNG import terminal to 22.5 million tonne, and ₹1,245 crore in building an additional storage tank and bays for truck loading of LNG. The Dahej import terminal is the largest in the world and the port will host a third jetty where propane, ethane and LNG can be imported, he said.

Petronet is also looking at setting up a 4 million tonne-a-year LNG import terminal at Gopalpur port, he said, adding that the initial thought was to set up a floating storage & regasification (FSRU)—based LNG import facility but the firm is now looking at a land—based terminal.

The company had some years back planned to set up a terminal at Gangavaram in Andhra Pradesh for the import of supercooled gas in ships. The company management stopped pursuing the Gangavaram terminal in 2015-16 on grounds that there wasn’t enough demand to justify a 5 million tonne a year import facility.