Gu­jarat State Petronet ex­pects higher rev­enues on ris­ing gas de­mand in FY17

Resource Digest - - CONTENT -

Gu­jarat State Petronet Ltd ( GSPL) has posted 7 per cent growth in net profit for the quar­ter to June. Mar­gins were steady at 90 per cent. Speak­ing to BTVI, GSPL Man­ag­ing Di­rec­tor JN Singh says they are try­ing to in­crease Gu­jarat Gas sup­ply to res­i­den­tial buy­ers and work­ing on the gas pipe­line from Mehsana to Bhatinda. With higher de­mand from in­dus­trial con­sumers like Es­sar Oil, OPAL and Tor­rent Power, GSPL ex­pects bet­ter re­sults in this fi­nan­cial year, he said. Ex­cerpts:

YOUR TRANS­MIS­SION VOL­UMES HAVE GONE UP 3 PER CENT SEQUENTIALLY AND THE TAR­IFF HAS GONE UP 3 PER CENT. IN TERMS OF VOL­UMES, IT IS AROUND 25.1 ( MIL­LION MET­RIC STANDARD CU­BIC ME­TER PER DAY ( MM­SCMD) AND YOUR RE­AL­IZA­TION OR TAR­IFF IS AT AROUND 1.07 STAN­DARDS CU­BIC ME­TER. WHAT IS THE GUID­ANCE ON BOTH OF TH­ESE GO­ING AHEAD?

We are try­ing to pro­vide Gu­jarat Gas sup­ply more to do­mes­tic con­sumers and oth­ers.

And, nat­u­rally all of it would be trans­mit­ted to the GSPL pipe­line. In the slightly longer sce­nario, we are build­ing up this gas pipe­line from Mehsana to Bhatinda. The ten­ders are al­ready floated in the mar­ket. Of course, it will take about 2 years for the en­tire pipe­line to come up.

But other­wise, in the do­mes­tic sce­nario – in Gu­jarat it­self – we are try­ing to in­crease the con­sump­tion through Gu­jarat Gas and once that con­sump­tion in­creases, we nat­u­rally will then have good im­pact on GSPL as it is also the main trans­mis­sion line.

TALK­ING ABOUT YOUR OP­ER­A­TION EX­PENSES, IT WAS DOWN IN Q1 TO 15 PER CENT SEQUENTIALLY AND THE SYS­TEM US­AGE GAS HAD LOWER COST THERE. ALSO, THE POW­ERS IN MAIN­TE­NANCE COST HAVE BEEN LOW­ERED. WHAT MEA­SURES HAVE YOU TAKEN TO CURB COST IN THE FIRST QUAR­TER?

Ba­si­cally, our fi­nance charges have come down quite sig­nif­i­cantly by around Rs 6 crore or so, be­cause we have sub­sti­tuted some long- term high- cost debt by more rea­son­ably low cost debt. As the com­pany is more fi­nan­cially strong it will be able to get low cost debt. Op­er­at­ing and main­te­nance ex­penses have also come down by Rs. 6- 7 crore. We in­tend to con­tinue this trend through­out the year. So while the em­ployee cost more or less re­mains same, the op­er­at­ing ex­penses and fi­nance costs have come down.

About Your Vol­ume Growth Guid­ance, There Are Two Or Three Trig­gers. Cur­rently, Spot L& G Over The Last One And A Half Years Is Com­pet­ing With Naphtha Be­cause It Is Cheaper And Is Around $ 6 Per Mmbtu. So What Hap­pens To The Re­fin­ery De­mand To Two Of Your Spe­cific Clients Es­sar Oil As Well As Opal, Which Are Ramp­ing Up Its Ca­pac­ity? We Spoke With Ongc A While Back And They May Com­plete Their Ramp Up By 2017 End And Tak­ing The 0.5 Mm­scmd Of Gas From Gspl. Then You Have Also Got The Mundra Ex­pan­sion Of 5 Mil­lion Tones And Petronet’s Da­hej Ex­pan­sion. How Much Of Vol­umes Are You See­ing Adding To Your Com­pany?

In the im­me­di­ate fu­ture, Es­sar Oil has in­creased the vol­ume from 0.9 to 1.04 mm­scmd as com­pared to the Q1 last year. Tor­rent Power has also in­creased from 1.85 to 2.99 mm­scmd. But at the same time, there has been slight de­crease in the vol­ume of Gu­jarat Gas. We ex­pect that Gu­jarat Gas vol­ume will in­crease.

And as we have men­tioned that as rea­grds other cus­tomers, which are long- term cus­tomers, we ex­pect an in­crease in vol­ume from them too. But it would be a bit pre­ma­ture for me to give you a guid­ance how it will play out in the next few quar­ters.

JN SINGH, MAN­AG­ING DI­REC­TOR, GSPL

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