Petronet LNG Ltd
NSE:PETRONET
| US |
|
Fubotv Inc
NYSE:FUBO
|
Media
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
|
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
| CN |
|
NIO Inc
NYSE:NIO
|
Automobiles
|
| US |
|
Fluor Corp
NYSE:FLR
|
Construction
|
| US |
|
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
| US |
|
TopBuild Corp
NYSE:BLD
|
Consumer products
|
| US |
|
Abbott Laboratories
NYSE:ABT
|
Health Care
|
| US |
|
Chevron Corp
NYSE:CVX
|
Energy
|
| US |
|
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
| US |
|
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
| US |
|
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
| US |
|
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
| US |
|
PayPal Holdings Inc
NASDAQ:PYPL
|
Technology
|
| US |
|
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
189.19
381.2
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
|
|
Fubotv Inc
NYSE:FUBO
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
|
Uber Technologies Inc
NYSE:UBER
|
US |
|
|
NIO Inc
NYSE:NIO
|
CN |
|
|
Fluor Corp
NYSE:FLR
|
US |
|
|
Jacobs Engineering Group Inc
NYSE:J
|
US |
|
|
TopBuild Corp
NYSE:BLD
|
US |
|
|
Abbott Laboratories
NYSE:ABT
|
US |
|
|
Chevron Corp
NYSE:CVX
|
US |
|
|
Occidental Petroleum Corp
NYSE:OXY
|
US |
|
|
Matrix Service Co
NASDAQ:MTRX
|
US |
|
|
Automatic Data Processing Inc
NASDAQ:ADP
|
US |
|
|
Qualcomm Inc
NASDAQ:QCOM
|
US |
|
|
PayPal Holdings Inc
NASDAQ:PYPL
|
US |
|
|
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Petronet LNG Ltd
You don't have any saved screeners yet
Good morning, ladies and gentlemen. Welcome to the Petronet LNG Limited Q3 FY '20 Earnings Conference Call, hosted by Nirmal Bang Equities Private Limited. [Operator Instructions] Please note that this conference is being recorded.I now hand the conference over to Mr. S. Ramesh from Nirmal Bang Equities. Thank you, and over to you, sir.
Good morning, ladies and gentlemen. On behalf of Nirmal Bang Institutional Equities, I'm delighted to invite you all to participate in this conference call to discuss the 3Q FY '20 results of Petronet LNG Limited. We have with us the top management of Petronet LNG Limited, led by Mr. V.K. Mishra, Director Finance, supported by his team, represented by sir, G.K. Sharma, CGM and VP Marketing; Mr. Vivek Mittal, GM Marketing; Mr. Debabrata Satpathy, DGM Finance and Accounts and who also handles Investor Relations; and Ms. Ashwani Agarwal, Deputy Manager Finance and Accounts.So over to you, Mr. Mishra, to give your opening remarks, and then I'll throw it open for Q&A.
Especially good morning to all. First of all, let me tell you the results, which have been very encouraging and very upbeat. If you look at the 9-month period, it has been -- this has given us a profit of around INR 2,624 crore, this is PBT, as compared to INR 2,579 crore in the corresponding period of previous year. So there is a growth of 1.75%, and this is the highest ever PBT for the period of 9 months. And similarly, the PAT has been highest ever for the period of 9 months at INR 2,339 crore as compared to INR 1,715 crore in the corresponding period of previous years. So there is a growth of around 36%. So this is the major highlight.And now I'll tell you about the throughput, which has been there in both the terminals. Total throughput has been 233 TBTU as against 250 TBTU in the previous quarter and 202 TBTU in the corresponding quarter. If you look at Dahej Terminal performance, it has performed at 100% and processed around 222 TBTU as against 240 TBTU in the previous quarter and to 197 TBTU in the corresponding quarter of the same -- previous year. And if you look at the processing of gas on -- in 3 -- 9 months period, it has been 709 TBTU as against 639 TBTU of the corresponding period of previous year. So there is a growth of 11% as compared to the 9-month period of previous year.If you look at the quarterly results, so it has been -- PBT has been INR 902 crore as against INR 885 crore in the previous quarter and INR 811 crore in the corresponding quarter. And as we look at the PAT, it has been INR 675 crore as compared to INR 1,103 crore in the previous quarter and INR 565 crore in the corresponding quarter of previous year. And I think this is all from my side. And now the house is open for the questions.
[Operator Instructions] The first question is from the line of [ Usha Jaysingh ], an individual investor.
My question was like, I've seen the total term dedicated [indiscernible] going to come [indiscernible].
Your voice is breaking.
Your voice is not clear. We are not getting your voice.
Okay. Sorry for that. My question was that [indiscernible]
Sorry, sir. Your line is not clear.
Your voice is breaking, voice is breaking. We are not getting your question.
Sorry for that.
That's a problem, I think.
[ Mr. Jaysingh ], we are not able to hear you clearly. Can you keep the handset mute while speaking?
Yes. Sorry for that. My line is bad.
Mr. Jaysingh, we request that you return to the question queue. Hello?
My line is bad. You may proceed with the next question.
The next question is from the line of Probal Sen from Centrum Broking.
I had 2 questions. One was, obviously, volumes have dipped a little bit on a Q-o-Q basis. This tends to be -- is it because of seasonality that -- or any other reason? And any -- what is the kind of trends that you've been seeing in the fourth quarter so far in terms of volume offtake? Are we seeing a recovery back to Q2 levels? And the second question, of course, was any updates you can give us with respect to your international projects, Tellurian, Sri Lanka, Bangladesh, any further updates on that you can share with us? That will be very helpful.
I am Gyanendra Sharma. As regard to volume, it is because of the seasonality. If you see till Q2 because the whole is not working. And now we'll, definitely -- if you can see the last year Q3 and now this year Q3, they said the cargo is to double. So that is the only reason.
And I think it's a trend we have seen every year-on-year. So during the May to September when [indiscernible] it custom volumes to buy. So that is the only major reason like Q2 typically is higher than Q3 and Q4. It's also in line with the Q3. We can't comment much more on that because of -- but it's in line with whatever the contractual commitments you have [indiscernible].
Correct. So essentially, Q4, you can expect that the hedge will be closer to the 100% utilization. That is sort of baseline, but in the big states.
We can hedge, but you'll have to wait and watch.
Still it is operating at 100% of capacity. Trend will continue. We are very much upbeat about this. This will continue.
And any comments on the second part of my question, sir?
Second part is that we are asking for the international projects, as we are trying to procure LNG from outside India. The objective is to bring cheapest LNG to India to reap the benefits of the low price of LNG in the international spot prices' market. Although what we are looking forward, is that there should be procurement of LNG at a very cheaper rate so that we can improve the kind of power plants and other verticals, like city gas distribution projects and other things. So this is the objective. But so far, there is no progress on this, and we are already -- as we have already signed one nonbinding MOU, yes, so let us see what happens in future. But right now, we cannot comment on this what is there because it's not finalized.
Sir, my question was more with respect to 2 things. One is that, can you, again, confirm that the capital commitment tentatively that you are looking at that individual company is going to be less than 1 billion. And second for this nonbinding MOU, is there any time line by which you have to either commit to a binding MOU or walk away from the project?
There is a time line for the nonbinding agreement. This is up to 30th of March. That is there. And as far as the investment is concerned, we have to see all the aspects, whether there is a proper IRR and the price of LNG is also the best reasonable price. So these aspects are to be seen, but we are not averse to any investment, but that will be based on merit. So this is what we are looking forward. But right now, as I said, there is nothing to tell you because we cannot comment on this thing. There are a lot of speculation going on. We don't -- everything is actually going on, but we cannot comment right now what's going on.
So in any case, what you're saying, sir, is that...
Mr. Probal Sen...
Ma'am, it's just a follow-up to the same question.
And one more thing that, that nonbinding agreement was signed with Tellurian, but we are looking forward to any entity who can do this globally, because we are not looking forward to a single one-to-one contract only. Tellurian is also one of them. But we are looking forward to the project globally, which can provide us cheaper LNG, and that is where we are going forward.
[Operator Instructions] The next question is from the line of Aditya Suresh from Macquarie.
Two questions. The first was on potential volume competition going ahead. And if management had any assessment of the latent demand potential around the Dahej Terminal. Is there a [indiscernible], for example, the 100% utilization, just speaking about today falls going forward? That's question one. Question 2 was about the use of cash in a scenario, you did not proceed with either Tellurian or any international projects. Is a higher dividend payment of potential outcome to think about?
I'm Gyanendra Sharma. As regard to your volume question completion, see, we have our long-term committed justification agreements. And the way it is -- the best place with the connectivity, it is connected with almost every pipeline, every source, which can offtake the volumes. And as regards to competition, you are hinting towards the new terminal that's in competition, we must understand the competition will be more faced by other [ Harira-based ] terminals. And PLL Dahej is that place, not only because of the competitive advantage, but also we are already, like, coming back to that contract with our off-takers also. So we are best placed in that manner.
And we have enjoyed the privilege of lowest credit as far as the other new terminals and the existing terminals is concerned. So that is what's an added advantage that Dahej provides because if any other new terminal [indiscernible].
As regards to your second question regarding dividend. So last year also, we have given 100% dividend. This year, we have already paid interim dividend of around INR 5.5 per share. So I think not this quarter, maybe next quarter, we may think of giving dividend like we have done last year. But anything regarding this will be decided by the Board. We are not the authority to comment on the distribution of dividend. But of course, looking at the trend we have done last year and looking at our cash positions and reserves, we may pay a dividend this year also. This much I can anticipate only. But cannot say firmly unless that is decided by the Board.
[Operator Instructions] The next question is from the line of Saurabh Handa from Citigroup.
I had 2 questions. Firstly, could you just comment on any negotiations being done with RasGas, which has come in the press? The Oil Minister has formally acknowledged it as well. Also, if there are any change in terms of offtake from our existing customers, given the big divergence between your contracted LNG and where spot is right now, just your thoughts on how we should see the next few months on this?
Okay. So first question, I will answer. Second, I will ask my marketing team to answer. First question is that negotiation is going or not. There was a visit of Minister from Qatar, and our Minister also had talks with Qatari Minister. But matter is within -- it's not a, means, question of the day or 2, it is an ongoing process. So of course, we would like to engage in this negotiation because looking at the gap between spot and long-term LNG prices, it is inevitable that we should invoke this kind of thing. If we don't do then certainly, it's not in tandem with the markets. So of course, our Minister and our effort is there to go for renegotiations. So that it can be in line with the market prices, because there is a gap of around $4 to $5, if you compare. Yesterday, the rate was around $2.80 per mmBtu as compared to $8 to $9 of this long-term gas. So certainly, it is a matter of concern. So we are raising this issue. But so far, nothing can be commented because this is all something ongoing process. It will take some time, if at all. So this is all what I wanted to say on this renegotiation. And other part, the marketing will reply.
Yes. As far as the volumes are concerned, so you would have seen the total volumes in the last quarter was 222 TBTU. We will not be in a position to tell you the contractual terms, but first start to maximize the utilization of the Dahej Terminal. Between the contract [indiscernible], it's relatively less to us. I think we're not in a position to answer that.
Okay. Just a follow-up on this. My concern is, I mean, could we see a repeat of what happened in around 2015?
[indiscernible] pricing has been done, so we are working on all the options, possibilities and taking up the measures, how it will happen, when it will happen, very difficult to give a timeline and exactly what would be the outcome. Probably, we have to wait and watch.
Okay. But as of now, the volumes are being taken, there is no change from your offtakers for now at least.
As I mentioned, we don't provide a split and probably don't force us to do that.
The next question is from the line of Nilesh Ghuge from HDFC Securities.
Sir, my question is on the services. So how much is the services giving you for this quarter.
Service volume, sir, 111 TBTUs.
No, I'm saying for rupee million, the revenue from the services.
Revenue from services?
Yes, yes.
It's INR 627 crores.
How much, sir?
INR 627 crores.
The next question is from the line of Susmit Patodia from Motilal Oswal.
A couple of questions. Firstly, you said a lot of things going on around the Tellurian project? If you could give us a little more insight into what all is going on? And secondly is, when will you start preparing for the Kochi tunnel ramp-up. Approximately, so let's say, the pipeline is to be completed in 2 months from now, when will you start working to supply into the pipeline?
First question is regarding Tellurian. I'll say that Tellurian is one of the parties because we are looking forward to opportunities across the globe. It's not as if only Tellurian is there. So what we are, in fact, saying that we are looking forward to procure LNG for India at a very reasonable price. This is our objective. Because if you look at the kind of market, which is now there, spot market, it's $3 to $4. So we are trying to get the LNG at the cheapest of the price available in the market. So this is our objective. So whosoever is there across the globe, we are looking forward to opportunities. It may be anywhere, and Tellurian is one of them. Of course, we have signed a nonbinding MOU with Tellurian, but only thing is that we are giving opportunities to all who can compete in this process, and then we'll come forward with the solution with some entity who can supply at the reasonable rate to us, so this is first question. And second is regarding?
Kochi-Mangalore.
The pipeline.
Kochi ramp-up is -- GAIL has committed that they will be completing the pipeline by March 2020. So I think after March, we should hope that we should be able to ramp up our capacity to 30% almost. And at present, we are already doing 17%, which is still higher than previous quarter and corresponding quarter in previous years. So I feel that this pipeline will be a major game-changer. And this will boost our capacity utilization of Kochi terminal. So 30%, 35% is good enough to ramp up it as of now.
And sir, I'm sure you do -- just a follow-up on that. I'm sure you do a little bit of ground-checking yourself? Do you think this will be done by March this time?
This time, yesterday also, we had a session with the CMD of GAIL because he is also one of our Board members.
Correct, correct.
We discussed with him, he said it will be 100% completed by March. So we should keep faith on him. We cannot -- we have no reason not to rely on him. And further, the Kochi ramp-up, we are also looking forward to truck loading base so that we can increase the offtake of LNG through trucks. With that, also, we are invoking because pipeline, if you look at the [indiscernible], which are coming up. But at certain places, pipeline connectivity is not there with the terminals. So we are sending this to trucks so that part, also, we are looking forward. So it's a commercial pipeline sort of thing, which we are also looking at, so that we can supply LNG even before pipeline is made to a particular place. So that's why we are trying to ramp up our Kochi facility.
The next question is from the line of Anubhav Aggarwal from Crédit Suisse.
One question is on -- with spot LNG prices now being significantly lower, have you seen any increase in volumes of LNG imports in India in your terminals, let's say, in month of January and February so far?
January, February prices were in the range of $4 to $5, and during this period, power demand is not there because of winters. So let's say, these prices continue during summer, also we do see that power could return and [ gradual ] power utilization levels could work. There could be some displacement of coal also. So to that extent, we are positive about it. But at this point of time, there has not been a significant uplift in the offtake, I would say. I think it's a matter of time before you see that.
That's useful. Second question was on the use of cash again. Now just asking between the 2 options of building another terminal versus marketing gas, why are we only talking about marketing gas as a bigger priority right now?
The aim is to create demand in the country, and that's what we have been focusing on truck loading LNG for trucks and LNG by trucks is one segment which we believe is going to augment the demand of LNG in the country. So that's the reason we are saying the focus is on that. We are not ruling out possibility of another terminal, possibly on East Coast of India. We are evaluating in the market. Obviously, as you know, there is going to be domestic debt coming up in the next 2 or 3 years. So we have to be ready on that debt. There has already -- whether in a useful terminal export. There is a new terminal [indiscernible]. So we are evaluating all those possibilities. But as I mentioned earlier also, aim is to increase the market of LNG and gas in the country rather than just building a terminal without having pipelines or other associated infrastructure.
So just to get it, right? As the thing stands right now between the 2 options, getting a more affordable gas into India is -- looks to be a better option.
It's all about developing the market. You need to develop the market. And as we told, like infrastructure, wherever the pipeline constraint is there, we are going full-blast supply through trucks. And so it such a nice story so what has to just go together.
First of all, what I -- just to supplement that, we need to create infrastructure. Unless we have proper infrastructure, we cannot enhance the uses of gas in India. So what's happening now is a good news that so many new terminals are coming, LNG [indiscernible] terminals. And pipeline also is being augmented to the extent that almost 16-kilometer pipeline is already there and another 14,000 kilometers, 15,000 will be coming up in the next 6 to 8 years. So once the infrastructure is laid, then certainly, this gas consumption will automatically enhance because we are not able to reach the customer who need gas but is not connected by pipeline. So infrastructure is very much required. So as we have -- we are also looking forward to create one terminal on the East Coast of India, but at the same time, we don't want to have a terminal, which is not connected by pipeline, like one we have faced with Kochi. So we want to have all sorts of guarantees before putting up that. In the meantime, so many other people are putting up their terminals. So infrastructure will be laid in next 2 to 3 years as far as the [ real ] terminals are concerned, and pipeline will also be augmented, of course, by, you can say, 6 to 8 years. So then it will be something you can think of that objective of Government of India to enhance the consumption of gas and create a gas-based economy can be materialized. So this is how we are looking forward to. Because I am upbeat about consumption of gas and I'm sure this will enhance and Government of India also wants it, then there is no reason why it should not increase. And my estimate is it will double in the next 10 years, whatever we are doing right now.
The next question is from the line of Rakesh Sethia from HSBC.
Sir, 2 questions on my side. First one is on the status of your negotiation on Kochi tariffs with the customer. My understanding was that you're charging a higher tariffs currently. At the same time, you're providing in your earnings about potential downward revision to the tariff. So has there been any progress on the same? And secondly, a housekeeping questions. What is the quantum of patent cash in your balance sheet as of December 31, 2020 -- sorry, 2019?
There we'll go into detail. Let me just clarify on this accounting. We are charging -- as per the contract, we are charging INR 102.54 per -- piece per mmBtu, whatever is the contractual terms. And we are also creating a provision in the books directly in the revenues to make it at [ INR 79.12 ], what we have maintained with you. Second, the cash position is INR 2,678 crore, to be precise. And rest [indiscernible] on the where the negotiations are. That I leave to marketing.
So we are in discussion with our customers and to work out an eligible solution with their name. At this point of time, I don't have any further update because our discussions are still on going. And as developed nation, that 29.14% is considered to be a target number, which we are trying to look at. And [ it must be ] close around that number only.
Understood. And if -- one more question, if I could just ask on a follow-up basis. If I look at the tariffs, which are currently being proposed for, let's say, Gangavaram terminal or for that matter [indiscernible] terminal, this seems to be at a lower rate compared to where the Kochi terminals has been sort of provided for. Is there a -- I mean, should that be a concern that, that could be potentially put more pressure on revising the cost saves downward? Or what's the reason that the new terminals are being -- coming at a lower tariff compared to, let's say, where the Kochi is currently on? We're just trying to understand how the market dynamics around some of these tariffs seems to be changing within the market.
Rakesh, from the -- from a really layman's point of view, we say tradeoff between the commitment with utilization of the terminal and the tariff stats. So that is exactly what is being done at Kochi, also. Our target price is INR 79.14 per mmBtu, where our marketing is also in discussion with the -- of business is having the highest commitment on the availability of the [indiscernible]. So all those things will come into play. And we are not able to, right now, discuss further on that. But once we finalize, we'll discuss with you.
The next question is from the line of Manikantha Garre from Axis Capital.
Firstly, a bookkeeping question. Can you please give us the [indiscernible] impact at the cost of raw materials, depreciation and interest line items?
Yes. Manikantha, these expenses, which would have been there, if Ind AS was not there, it was INR 120 crore. So that goes out. Now the expenses that have come in INR 89 crore of depreciation and INR 85 crore of finance charges and INR 18 crores of, I mean, ForEx loss. So the net impact is INR 73 crore loss -- I mean as compared to the non-Ind AS [indiscernible].
Sure, sir. And my second question would be, recently, there was an interview where our Chairman has mentioned that we would be focusing more on helping the LNG fuel stations set up. He has mentioned about a figure of 50 LNG fuel stations by 2021 and for 300 LNG fuel stations for 2024, I think, predominantly focused in the Golden Quadrilateral area. If you can throw some light here on how our CapEx -- how much of the CapEx would be required here? How we are going to be involved here?
I'm Gyanendra Sharma. See LNG to be used in automotive is the next leap jump the automotive industry and LNG industry is going to take. If you see it is expected that in the next few years, more than 1 lakh trucks would be running on LNG. It has added advantage of long haul, added with the economic benefit of around 20% to 30%, which truck you just get. So yes, definitely, we are looking for expediting the infrastructure creation for LNG dispensing. And in this regard, we are in final stages of executive agreements with the city gas distribution companies and good fuel dispensing companies. So it is going to come big way.
Sure, sir. What are the CapEx requirements from this point of view?
CapEx, what? Can you be clear, Manikantha?
So what would be the CapEx requirement from our end with respect to this initiative?
See, initially, we are expecting station-wise maybe around INR 6 crore to INR 8 crore and depending upon that will take up around INR 100 crore to INR 200 crore initially. And once things pick up and the emergence starts happening, we are all ready to like expand the terminal -- sorry, dispensing the station base. So it will go with the time.
So just to clarify, sir, the INR 100 crore CapEx will start from FY '21 or '22 with respect to this initiative. That's what you are saying?
Yes. It's going to start within next few months itself, so not the whole year. I'm just seeing this CapEx to happen in the next, say, 6 months or so. And then how market picks up, then it can be further increased -- enhanced to INR 200 crore plus. So CapEx is not the limitation for us.
Understood, sir. So in light of this, can you cover us the revised FY '21
Sorry to interrupt, sir. Mr. Garre, I will request that you return to the question queue.
That's just the continuation of the last question. So in light of that, sir, can you please provide revised guidance for FY '21, '22 CapEx?
FY '21, '22? Or you were asking for '20 '21?
Yes. So you said the new CapEx will start in the next few months...
2021, the CapEx -- total CapEx target is about INR 350 crore. Out of that, this initial target for this energy station is INR 126 crore. But that is the initial target as marketing has maintained, that could be enhanced further depending on the progress. And we will spend some [ INR 65 crore ] on the 2 tanks that has to be built at Dahej in 2021. And further, expenses will be done in the subsequently years of FY '22 and FY '23.
The next question is from the line of Pinakin Parekh from JPMorgan.
My first question is on Tellurian. So just to clarify, you mentioned earlier in the call that the IRRs and the financial details need to be worked out. Sir just to clarify, if the IRRs are attractive enough, would Petronet go 4, 5 million tonne investment? Or will it still be maintained at 1 million tonne direct investment?
These are all hypothetical question because once these are not finalized, we cannot comment on these.
So the company is open to a...
We have signed a agreement, nonbinding agreement, it says it is up to 5 million tonnes. It doesn't say we cannot do 1, 2 or whatever it is. So it depends upon the circumstances, how things shapes it. And so we cannot right now comment on these things. These are hypothetical questions. We should not answer these questions.
Sure. Secondly, on, sir, Dahej tariff from Jan 1, sir, what will happen with the new tariff now?
51.75.
Okay. So that's 5% tariff, I guess, from here.
The next question is from the line of Nitin Tiwari from Antique Stockbroking.
First one is a bookkeeping one. How much of Gorgon volume was taken up at the age in this quarter?
7.2% around TBTU.
7.60 TBTU.
Right, sir. And sir, second question is rather hypothetical. So we were discussing about renegotiation of contracts with our gas cost, first quarter [indiscernible] prices are trending lower. So like given the circumstances, suppose few years down the line if spot like goes up, then how much chance you ascribe that our gas like from their end, renegotiates the contract upwards, should the need arise?
It's not a question. What you are saying again hypothetical. We are trying to negotiate and work out some solution to compare with the current market prices. Now question is as future it increases, so it's a formula-based thing. If there is any increase in future, which we foresee that there should not be any substantial increase in size of natural gas in future also because we have seen projections for next 4, 5, 6 years. The availability of natural gas, LNG is abundant. So it's not possible that prices will go substantially high. Because the demand as compared to supply is very low and looking at the global scenario and China's demand scenario, we don't foresee there will be any substantial rise in the price of LNG in future. So what we see that this will continue to remain in the range of, say, $3 to $5, in between. So that's what we want to negotiate. And let us see what happens. And we have already started talking to them as you have -- you must have read that Qatari Minister was here a few weeks back, and our minister had discussion with him. So it is going on. So right now, nothing can be said what is going on, but it has started, this much we can say.
Sir, talking of China, given the coronavirus scare, have we looked at some distressed cargoes, which can be re-diverted towards India...
Yes. Actually, I have also heard because it seems that yesterday the price was $2.80 per MMBTU. So our saying has been maybe some impact, short-term impact of that. But in long run, I don't foresee it will be any substantial change. So it may be one cargo here or there may be cheaper, but if you look at the average of the prices, which is going on, it will remain in the range of $3 to $4, in between.
The next question is from the line of Mr. Amit Rustagi from UBS Securities.
Sir, could you give us some indication on how this lease accounting impact the next year's profit? Because this year, I think you have already seen around an accounting impact of INR 273 crores. So what is the number we should look at next year?
Yes, Amit. The lease impact will remain at around INR 65 crore to INR 73 crore, provided there isn't any further ForEx loss or gain. So this year, as this -- then that will be 3rd quarter, basically. So as I told you that this quarter, there was a ForEx loss of INR 18 crores. That made the entire impact INR 73 crore basically. So you can always say that there is an impact of INR 55 crore per quarter, reduction from profit. And if there is any ForEx loss or gain that will impact. [ It doesn't ]. And that will...
Actually, I was referring for the next year, that is like my total quantum is INR 65 crore in Q4 this year.
Actually, the main answer, it is for the overall year, it is INR 220 crores around [indiscernible], and ForEx loss again will be additional to that.
Okay. And for how many years, it will remain a negative impact...
What we have estimated is till 2024, '25. The meeting point will be 2024, '25. After that, gain will start.
Okay. Then it will start investing. Sir, this Kochi tariff of INR 79 what we had proposed, will it also be subject to the 5% increase formula?
That is what has been discussed. We can't say more than that.
The next question is from the line of Vishnu Kumar from Spark Capital.
I just wanted to understand for me, are you seeing any, medium or long-term contract that is much the indicating signs globally by any players. And -- or at least the producers, what grades are they ready to offer [indiscernible] they are ready to get into such contracts?
Market number is, obviously, the definition of long-term contractual change. It is not no longer 20, 25 years. But there are some deals so specifically, like, yesterday, I was reading an article that Shell has sold some volumes to [indiscernible] Petroleum, 1 million-tonne deal. I think [indiscernible] is open to renegotiation -- not renegotiation, renew their deals. I think those kind of deals generalize collectively looking at some volumes on the expiring contracts. So these kind of discussions are ongoing. But obviously, market is moving towards the commodities. We don't divide at that.
And what rates are we getting renegotiated or with the [indiscernible], either a oil index or gas [indiscernible].
The market is still oil index, that's all I will say. If I tell you what the numbers because we also don't know what those numbers could be.
Got it, sir. And do you anticipate any production cuts for any of the players with the ones that we are sourcing because the price is too low and maybe not be competitive, I think, around the plants?
I don't think so that's going to happen. But globally, that phenomena can happen, specifically in U.S. [indiscernible] the variable costs, in Australia, where marginal cost of production is high. So there could be some temporary shutdown. But I think people will look and work on the economics before we take this kind of decision because a shutdown is a major long-term impact rather than a immediate to only short-term impact.
If you just see, they had to do debt servicing. And if there's suddenly a production, it gives a much negative image, negative commercial implications. And so I doubt in near future, they can fix the drastic costs of setting their production as long as they are able to serve their debt.
Got it, sir. And then, quickly, if you could give me a broad bifurcation of the volume that has been currently offtaken by BPCL and maybe others?
So If you look at total gas processes around 11 TBTU, out of which 9.03 is pertaining to gross on volumes. And 2 TBTU is pertaining to others, which include BPCL. So that is there. So total 11 TBTU has been passed in Kochi, which is the highest ever, I think, in this quarter, compared to previous quarter and the corresponding quarters.
How much would be for the stabilizer plant and BPCL is -- of this level to big users?
Okay. Actually, if you look at so like today's data, I'm telling you, around 2.39 MMTPAs today for BPCL and 0.82 for [indiscernible]. GAIL is also 0.11, which is the breakup...
[indiscernible] [ splitting ] in the region of 2.3 to 2.7.
Yes, that's all. So it is in this range only. Total of this is 3.32. So this is the range only, it is happening.
Okay. Got it. There's some proportion that you are, trying to along with this type, to close a bit distance. There is a proposal from the kind of gas power plant to convert it. Is it still on, or that is not likely to happen?
The economic study has been done in the past. And in the change scenario, we are still working on it. I think they need to lay a pipeline, which is going to be a dedicated pipeline, which is an expensive proposition. So we are trying to see it sales and automate it through barge or other any other mode. So we are still evaluating the [ time period ]. But at this point of time, nothing is confirmed.
Ladies and gentlemen, we'll be taking the last question that is from the line of Anubhav Aggarwal from Crédit Suisse.
Yes. My question is more of a clarity when you record tariff in Kochi, so the provision that you talked about is netted of sales itself. So net-net, we are recording at 79%?
Yes.
Yes.
And this treatment was there for the full year from -- starting from quarter 1?
Yes, it is second in quarter 1. And the total impact plays [indiscernible] INR 129 crore.
Thank you. Ladies and gentlemen, that's the last question. I now hand the conference over to the management for the closing comments.
Thank you very much. So I think, first of all, I should thank all of you. You have asked your question, and probably, we have answered your -- all the questions. And we hope that your support will continue in future as well. And Petronet will continue to rise, like ever, as we have seen. We have been growing from quarter-to-quarter. Every quarter, there is some record broken. So even PBT of this quarter has been the highest ever. So what I'm saying that company is robust. It's business model is robust. So I can assure the investors that its performance will continue to excel from quarter-to-quarter from year-to-year. The only thing we require is your support and your good wishes, so that we can continue to grow like this in future as well. Thank you very much.
Thank you.
Thank you.
Thanks.
Thank you.
Ladies and gentlemen, on behalf of Nirmal Bang Equities, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.
Thank you.