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Petronet LNG Ltd
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Ladies and gentlemen, good day, and welcome to Petronet LNG Limited Q3 FY '22 Earnings Conference hosted by IIFL Securities Limited. [Operator Instructions] Please note that this conference is being recorded.I now hand the conference over to Mr. Harshavardhan Dole. Thank you, and over to you, sir.
Thank you, Nirav. Greetings, everyone, and on behalf of IIFL Securities, I welcome you all for the third quarter FY '22 earnings call of Petronet LNG. Firstly, I'd like to congratulate the management of the company for producing a great performance in challenging macro environment. Moving on, to discuss the performance in detail and share the outlook for the subsequent quarters, we have the senior management teams of Petronet LNG, represented by Mr. V.K. Mishra, Director, Finance; Mr. Rakesh Chawla, CGM and President, F&A; Gyanendra Kumar Sharma, CGM and VP, Marketing; Debabrata Satpathy, GM,[ F&A ]; Vivek Mittal, GM, Marketing; and Ashwani Agarwal, Manager F&A. I would hand over the call to the management for their initial comments, post which the floor will be open for Q&A. Over to you, sir.
Yes. Good afternoon to all of you. First of all, I would like to tell you that this quarter has been very difficult for us, but we have managed to give the best performance so far. So the first thing I would like to highlight that PBT for this quarter has been INR 1,533 crores as compared to INR 1105 crore in the previous quarter, and INR 1172 crores in the corresponding quarter, so there is a growth of almost 39% from the previous quarter and 31% from the corresponding quarter. And as regards that, it has been our highest. If you look at, it has been in the range of INR 1144 crore as compared to INR 823 crore in the previous quarter, and INR 878 crores in the corresponding quarter. Here again, the growth is 39% as compared to previous quarter, and 30% as compared to corresponding quarter. With this, I wanted to start with a positive note that we have shown the resilience in this quarter, even though in this difficult time when the prices of LNG are very high and it is becoming difficult to secure short-term and spot cargo. So yes, we have been able to manage the performance. So now we will start with the usage of our terminal and if you look at our Dahej terminal, it has been utilized at the level of 86% as compared to 97% in the corresponding quarter, and almost 99% of the previous quarter. But if you look at the volume wise, you'll find that it is 196 TBTU is the throughput at the Dahej terminal this quarter as compared to 225 TBTU in the previous quarter, and 222 in the corresponding quarter. And similarly the total volume which has been there is 208 at both Kochi and Dahej, it is 208 TBTU this quarter and 240 TBTU in the previous quarter and 235 TBTU in the corresponding quarter. This is the physical performance quarter-wise. If you look at the throughput in 9-month period, it has been very impressive, and we have [indiscernible] almost 657 TBTU in the current quarter as compared to 679, even though the volume was less. Actually, we have done in this difficult time the best that is possible. Then next comes -- I have already told you about the quarterly profit. Now, I will take you to a 9-month profit, which has been very impressive. It is INR 3,489 crores as compared to INR 3,112 crore, this is PBT, and if you look at PAT it has been INR 2,602 crores as compared to INR 2,326 crores in the corresponding period of previous year. So this is how the performance has been, and we have been able to manage our profitability despite low utilization because of our efficient commercial management, and we have done the official efficiency we have done in this quarter, so all these have contributed to our contribution. Now, floor is open for the question. Thank you.
[Operator Instructions] The first question is from the line of Puneet from HSBC.
My first question is with respect to the note for in your accounts. How should I read that? Is it more in the nature of one-off? Or is it a regular business income? Can you help clarify, please?
Yes. You are talking about the overall performance.
No, there's a note for which says that the long term [indiscernible] agreement on the company's books.
If basically use of [indiscernible] you are talking about, then perhaps that is there as a contract, and it is to the extent of INR 347 crores in this quarter. So this is just -- I was telling you the high prices of LNG has, in fact, had the casualty on trading spot and short-term cargo. And perhaps that's the reason that we had to improve the use of the charges on the offtakers if few are there. And that has not impacted our revenue because either they will use the capacity or they will have to clear that as per the contract.
Okay. Is this for full year that we recorded in one item?
For the whole year. Because it's like this, we are having this contract here as calendar year. So basically, at the year-end, we have to level these charges, these charges. Otherwise, they have flexibility to bring in cargo quarter-to-quarter. And if at the year-end also, we are not able to bring it in the full year from January to December, then at the end of December, we impose the user pay charges. All four quarters take it together.
Understood. And have customers paid that or they are yet to pay for this?
They are yet to pay. It is that we have done the bidding so they have to pay.
Okay. Okay. And then a similar item last time around, there is also a point mentioned in 0.5 in the notes to account. Any further progress on that? Any more adjustment that you need to do there?
That is regarding -- yes. It has been there because if you look at user pay charges, most of the user pay charges are settled now, and perhaps we have done with one of the customers, and other one is there with whom we are in talks, and that will be resolved very shortly.
Okay. Okay. So out of the INR 143 crores, INR 54 crores was withheld and INR 65 crores has been written off, right? That's how one should read this?
Yes, 65 crores has been written off.
Yes. Okay.So the balance is still under discussion and likely to be recovered, or whatever settles depending on the negotiation?
No. In fact, we have reached -- reached an agreement that after writing off INR 65 crore, they will have to pay us balance amount.
Okay. Okay, then. Okay, okay. Great -- that's great. That's good. And -- but you actually have to pay, right? I mean, that money is also not in your balance sheet in cash.
Yes, yes. They will pay because this is recoverable. We have already reached a settlement whereby they had to pay it. And INR 65 crores of it, we have written off.
Understood. That's very helpful. And any progress on the discussion with respect to the Kochi tariffs?
Yes. That is also under the question, and perhaps it will be settled in fourth quarter. We will tell you after this fourth quarter what is the outcome.
Okay. Okay. That's very helpful. My last one is on the CapEx side. Any further plans on building your capacity on the East coast? Any further developments have you done there so far? Or is it still being evaluated?
No, it's going on. We are already in discussion as far as the terminal of the East coast is concerned. And there are certain issues which are to be fleshed out. Of course, it's almost on -- GPs basically are taking a review of the project. And whatever developments are there, we are monitoring it and it's -- we have also engaged consultant for this project who are doing all the study, pre-feasibility and then they have to verify things. All those things are going on simultaneously. But of course, the feasibility has to be seen from other point of view also because how these are dealt with agreement, how this is shaped, all these things have yet to be decided. But of course, we are in discussion. And as and when that is final, we'll come back to you.
[Operator Instructions] The next question is from the line of [ Rakesh Setia HDFC Asset Management].
So just wanted to understand this user pay agreement a bit better. It seems to be a substantial amount in terms of last quarter. Does the offtakers have any, let's say, because -- or any flexibility where they can make up for these user pay charges in the subsequent years? Or once it is billed, they are liable to pay these charges?
No, they are liable to pay as per the contract. Because there is no provision in the contract that they can shift the cargo to subsequent deals. So this is not there as per contract. So as of now we will say it is chargeable, and we have to bill as per the contract.
Okay. Okay.And the sort of flexibility -- what the offtakers have applied only during the year from a quarter-on-quarter basis, but in the fourth quarter, they need to make up for all the volumes, is it?
Very true, very true. In the fourth quarter, they had to come up, whatever commitment they have not met in the 3 quarters, they can meet in the fourth quarter also, then usually the charges not billable. Otherwise, it is billable after fourth quarter.
Okay. Just to follow-up on the same. Since the amount is substantially higher, I mean, if I just look at the number for example, you had mentioned that even the previous spending is about INR 19 crore -- about INR 200-odd crores, that was pertaining for 4 years. And this one year -- and this one quarter itself is about INR 348 crores. Do you think there could be pushback from the offtakers to sort of negotiate and maybe not pay the cash, but just probably, let's say, elongate the value of the contract? So the terms might still remain neutral to you, but they may do more volumes in probably one more year. Is there something kind of a proposal or something, kind of an agreement will be open for discussion?
Right now, as per contract, we are not doing that, of course. There are real problems in the previous year if you can look at. There has been a COVID time in the first quarter, if you look at from after June. It's one in fact marred by the COVID pandemic. So I think because of that, we didn't think of it. But right now, we have not done it and perhaps there is no discussion right now. But of course, they are representing that this has been difficult time because of COVID. So it is up to our management and Board to decide. But so far, we have not shown any inclination towards just going down and saying that and saying it in the future.But of course, everything is open now because that has been a difficult period in the first quarter. Subsequent quarter, there is no excuse, so that is not something which can be relaxed. But of course first quarter is there, which is they have claimed that and it should be considered, and that they may bring it in future. So all those things can be done only after subsequent approvals and perhaps after taking management nod on this and -- this is not discussed at all. So far, we have not started the dialogue on these issues. But in future, one cannot say that we will not discuss. Of course, they are offtakers so if there is new concern that can be considered for subsequent year, but as of now it is as per the contract.
Understood.Sales prices continues to remain high. Any change in utilization or any -- how is the volume outlook as you talk probably during the quarter? How do you see volumes coming out in probably the subsequent quarter? Anything you can provide in terms of near-term outlook would be helpful.
Actually, prices are still very high as far as spot gas is concerned. So the real challenge in bringing the spot cargo, certain cargoes are very costly, still at $25, $26. So a real challenge is there, no doubt, but at the same time, if you look at the long-term volumes, they are coming as per schedule, then there is no fault in that. So perhaps we are seeing there's a long-term contract, and we are coming on fresh cargo almost, I think, we have docked 51 cargoes in the previous quarter. And whatever long-term volumes are there, they are coming for sure. But the only thing is spot cargo used to come every quarter, it is becoming difficult for the offtakers to bring those cargo because at that price, it is a real challenge for offtakers to fill that gap at that price. So that is a big challenge for us, no doubt. But still, we are paid by the long-term contract, capacity booked by the offtaker, which we have booked almost at the level of 95% capacity. So that is saving us, that's why we are able to levy user pay charges in spite of them not taking the cargo, so that is helping us a lot. In fact, we are immune to this kind of fluctuation to that extent.
The next question is from the line of [ Kiran Mehta from VOV caps].
Is there any discussion about the investment into the petrochemicals project? Has there been some proposal about it?
Can you repeat your question?
Is there any proposal about investment in petrochemical projects?
Yes, it is there in this session of course, and we are, in fact, working on this project. And it's a proposal which will be analyzed right there, and only when there's a real return and it is there, because petrochemical is a business where people are making a lot of money. And in India, where the consumption of polymers or plastic is really less as compared to the world average.So looking at that point of time, at that point of thing, we are hopeful that in future, the consumption of these products will increase. I think perhaps then, we have a lot of potential in gas project. And after seeing that there is a lot of margin in that particular product, so we are thinking of that. But still, we have to work out all the feasibility report and fees and other things which are under discussion. And perhaps after that, if it is really viable, then we will eventually field that project .
Just a follow-up on the same question, which are the change which you are currently evaluating for investment? Which are the options you are looking at in the petrochemical projects?
Basically, this will be a plant of PDHPP. So this is basically, we are going to produce early coupling to the extent of almost 500 kt, and then also, we have the project [indiscernible], this is -- one more project is there. So these 2 projects are 750 and 500 kt. So this is a small plant, not very big plant. But still, we are looking at that particular project, which is PP and more project is there, so these 2 projects are soon to be produced from there. Talking [indiscernible]. Yeah.
And can you also give us an update on the other CapEx project, those are under consideration in the current state?
Other projects. One project which is already going on is the construction of tanks. We are going -- we are already doing construction of 2 tanks at Dahej at a CapEx of INR 1,245 crores, and another project which is coming up because the Board has approved it, so it will come up in a big way is the construction of third jetty at Dahej where CapEx of INR 1,650 crores. And apart from that, we also have ambitious plan of expansion of the Dahej terminal of 17.5 to 22.5 MMTPAs in future. So in the next 3 years period almost, it should be constructed, so 3-year period time for banks also and for these expansion project also, jetty will also be ready by that time.So these are the plans we are doing because the Board has approved construction, board has approved jetty construction, board has yesterday approved the expansion of our Dahej plant to the extent of 20 MMTPA because this is being done in 2 phases for 17.5 to 20 MMTPA, and then 20 to 22.5. But the time gap will be only 6 small investments, so it will be, in 3, 3.5 years, will be ready. This capacity will be available to us in Dahej. So these are all planned for the Dahej, and then we will look at the new terminal which we have planned at Gopalpur so that is also underway. And as and when everything is finalized, everything is okay, that will go to the Board for approval. And that will be costing around INR 1,600 crores or so. It can be HHRD terminal, which will have capacity of 4 million tonnes.
Sir. Can I also slip in one more question about the tariff increase for the Kochi terminal? In here, in the call, you have mentioned that you would be willing to sort of look at the lower tariffs as and when volume develops for the Kochi project, and the additional incremental volumes are still sort of one more year away before -- when the pipeline actually gets completed. So when you are trying to conclude this discussion for tariff negotiation next -- this quarter, would -- are you sort of willing to reduce it even before the quantity ramps it?
No. Actually, we are looking at even before the quantity ramp-up because this is future planning. Future cash flows, we have taken into account after their commitment. So ultimately, this will not impact P&L in the long run, and that's the reason we have agreed to it rate. And of course, the back volume which is coming up of 2025, '26. For that, we have cost commitment from them, and that is what they have committed -- they asked almost on the threshold of committing it to the extent of 50% of the commitment. So accordingly, it will be a revised tariff from now onwards. And perhaps, I think it is from 2019, it will be first covered in 2019. So it is being done, looking at the cash flows in future for entire period of contract of this one model. So accordingly, we are doing it, but that has to be seen because we cannot go one outside that the tariff at Dahej -- at Kochi is highest, and perhaps more than in India and abroad is having so much of tariffs, so that part has to be pertinent. So that's why we are, of course, again with some commitment we are thinking of production rate. It's not reduced too much, whatever possible, but what else in future is utilized to the extent of 80%, 90%. Certainly, we may bring it to the level of Dahej also. So that there will be unified tariff, and perhaps it will be more convenient for them also that they have to pay only that much of what they are paying in Dahej. But right now, it is only a resolution that we think of that it could be like 100% or 90%. So accordingly, we will reduce tariff, but not to the level of Dahej. It will be a small, small amount. So let us see what happens in the fourth quarter. We will not disclose everything now.
The next question is from the line of Avadhoot Sabnis from Incred Capital.
Question on the user pay, some calculations that I made, I just wanted to confirm them because they don't seem to tally. So you reported a user pay revenue of INR 348 crores in CY '21, and if I take the Dahej it stands at INR 54.32 crore, that's why user pay volumes of 64 PBTs. And as far as CY '21 is concerned, user pay volumes overall is 8.5%. So the report to contract volume is 8.5%, which is 420 TBTU against which actual volumes of 389, so the shortfall is 32. So it's 32 shortfall, where the billing seems to be for 64 so have I got something wrong in terms of calculation?
Mr. Vivek will explain it. [indiscernible]
[indiscernible].
[indiscernible] Sir, we are unable to hear you.
Is it better now?
Yes, sir.
Okay. So what our understanding, yes, partially the calculation you have seen is correct. But many times, there's some quarters that the holders took additional slots also. So if you account for those, the numbers we've given does not seem to tally because some capacity holders took the additional slots, so they have done with more than their capacity and some of them below their capacity. So user pay charges are actually are applicable [indiscernible] less than their capacity. And if there's no set off then somebody who is an access to that volume can be set off to someone who is very short.
Perfect. Understood. Great.Slightly related question, the debtors was INR 2,160 crores as on September 21. Would it possible to share the debtors' figure as on December 21?
You are looking for debtors in December -- 31st December, yes?
Yes, yes, 31st December.
31st December 3000-something crores - 3,307 crores.
So that's INR 3,300 crore?
Yes. Am I audible?
Yes, yes.
INR 3,307 crores. But this includes the current -- I mean, current period debtor.
Yes. Absolutely.
[indiscernible]
Debtor provision as of 31st December, right?
Yes.
Understood. Perfect.
The next question is from the line of Yogesh Patil from Reliance Securities.
I have a couple of questions.So first one is related to, could you please share the Dahej terminal utilization for the month of January? Is it lower compared to third quarter FY '22 or higher? We just wanted to know directionally, higher or lower compared to the third quarter FY '22?
We will talk about in the next quarters. If you are asking January, it is premature talk about these -- our numbers right now. .
Okay. Okay.And sir, the second one is related to -- have you taken a tariff hike in the month of January for the Dahej terminal?
Yes, yes, we have taken. Dahej we have taken it.
And is it a 5% or less?
5%. It is there in the contract.
Okay. And what about the Kochi terminal, sir?
It is revised in March the cost of assets. So accordingly, we'll do it on cost of assets.
Okay. And the last question from my side, sir. If you see India's gas demand has increased 5% Y-o-Y during the quarter and mostly supported by increasing domestic gas production. And in next 1 to 2 years, we will see additional domestic gas production from the domestic field, so which will likely impact on the LNG demand in India. At the same level, our additional Dahej capacity will be ready in the next 3 years. So how do you see the utilization levels of Dahej terminal at expansion? And are you getting any fresh request from clients for booking at capacity at Dahej terminal?
So far, if you look at -- you are talking about the domestic production first. Of course, it's an impact on to a certain extent. As of now, the prices are very high, so we cannot say that people prefer LNG as compared to domestic gas. Once these situation will be normalized in the next few months, then it will be even at the level of almost domestic gas. So what I feel is that the demand in India is elastic, in fact. It increases when there is a lower trend and it decreases when there is higher trend, so there is a gap in that. So perhaps right now, sir, because the domestic gas is available, high pressure, high temperature, so that was simply utilized. But I hope that when the prices are normal in future, the demand will increase. And as far as on capacity building is concerned, we are not bothered because it's only something is available, and we are ready to decide it. So what is happening that sometimes we are not able to cargo because we have some clients as per our ADP. So it is to be executed, and we don't have a space. But now after expansion, we will have enough capacity to even bid the short term or long-term cargo booking also and other ways also, we can utilize it for spot and short-term cargo. And further, this answer will be supplemented by our VP Marketing, Mr. G.K. Sharma.
Hello, good afternoon. What hypothetically you were thinking the demand will remain stagnant and share of LNG will be eaten out by [indiscernible] which is not the fact. Fact is, if you see the way exponentially the common minimum program in CGD around 9, 10 and now 11 and 11 is here. So purchase of gas demand is going to increase in the next 2, 3 years, substantially. Number two, there are a few fertilizer plants which are coming online. Number three, there are expansion of refineries, and refineries will in fact have inherent capacity of going up. So in any case, to cater to that demand, domestic production is not sufficient. LNG -- and in turn, our LNG requirement is going to increase. And if you see while I'm answering a question of capacity buildup at Dahej, the base is having enhanced advantage of: number one, it is best connected, it's strategically placed. Also, its tariff is one of the most competitive in the market, given all these advantage and demand coming up. Because I'm serving PLL, that's why I'm not telling, but even if you increase from above 22.5, Dahej will be in competition with better players with any other terminal. So it makes very important for Dahej terminal to get capacity added and overall Dahej as you must have heard our team speaking in the morning, the cost advantage of Dahej for incremental capacity is demand as compared to any other terminal. But the tax required to expand it by 500 ppi is fraction of developing a new greenfield project. So I hope I could give ample vision as to why this would be expended and why it is best place as compared to the competition and market demand needs to be better. Otherwise, it is not possible.
Yes, sir, thanks a lot. And any update on getting any fresh request from client side for booking the capacity at the Dahej expansion terminal? New capacity? Any request, fresh request you are getting from the clients.
Yes, getting all the request, but that's the time we have to clear our internal requirements, business requirements, and we'll see. It is too early to comment on that.
The next question is from the line of Sabri Hazarika from Emkay Global Financial Service.
So I have 2 sets of questions. Firstly, the bookkeeping questions. So the regas service income for the quarter, how much would that be?
[indiscernible]
Excuse me?
INR 755 crores in total.
Nine months will be INR 755 crores.
For the quarter, INR 755 crores.
INR 755 crores. Okay. And what about the [indiscernible] volumes in Dahej?
About 2.89 TBTU.
2.89 TBTU. Okay. And -- And what about the Ind AS 119 -- sorry, Ind AS adjustment for the quarter? So how much of that be on the raw material and COJ?
Yes. For the quarter, that the gross margin level is INR 145 crores positive and returnable 5 crores positive and negative is INR 151 crores, so net negative is INR 111 crores.
The INR 161 crore will be -- depreciation will be how much?
Depreciation and interest, we go to -- totaling INR 161 crores.
INR 161 crores. And net is around INR 11 crores negative, right? Okay. Fine. And second question is on your -- I mean, take up on the user pay one. So -- so considering the one where the dispute is running right now, and you said that you will come up with an agreement. So what was the reason behind this dispute? I mean, user pay is very much part and parcel of this business. So how come these 3, 4 offtakers, 2, 3 offtakers this dispute emerged in the first place? And why -- how it is different from other user pay demand actually?
Sabri, you are talking about the notes which we have given last time.
Yes, I mean there are 2 notes. One is the older one where you said that you made some settlement and -- and about the customers. Then again, you have mentioned for CY '21 also. And just in CY '21 that is a fresh issue, CY '21, it has gone up because of COVID because of higher gas prices.But the older one, maybe it's like it's created at CY '21, it seems. So -- and why it was like -- why it became a separate dispute altogether?
See what happened -- at that point of time, one of the offtakers brought the cargo in the same contract here and placed at Kochi. What happened that this and that they brought some spot cargo there, and in fact, had they bought those cargo to Dahej, that would have adjusted the user pay charges and impact. But now what happened that this cannot be continued as per the contract. But if you look at the revenue, we have earned revenue instead of at Dahej we have earned at Kochi. It's a practical decision which has been taken by our Board. But somehow they have got 2 more cargoes at Kochi. Had they brought it to Dahej, they would not have been any user pay tariff on that. Considering all those things, it has been decided that, of course, there is no revenue loss as such because ultimately, we have got revenue at the rate of -- Kochi tariff which is INR 79 almost in place of Dahej. So somehow, it has been mitigated. So that's why it was considered.
So these are like 3 customers, right? All 3 of them have done this? .
No, no. One of the customer has already paid it. And the second one, we are talking to pay because of the three reasons that I just told you, there is no denying that.
Okay. So but it is more like an exceptional condition, what you were trying to say, and not in the -- and it happens one time only in case of this Kochi?
It's a one-off settlement we have taken. It is not to be considered as a part of procedure, it's one-off decision, which has been taken by the Board and as a one-time settlement, it has been done.It is a precedent for the future by doing this.
Our next question is from the line of S. Ramesh from Nirmal Bang Securities.
Congratulations on good results.The first question is on the Kochi terminal, can we have some update on the Kochi land pipeline in terms of the normal pipeline, and what is the expectation in terms of when you see the capacity going up in the target of 30% or 35% on the -- how do you see the [indiscernible]?
Yes. Kochi, Mangalore Pipeline, as you already know, it was commissioned way back in 2020 November, 2020. After that, the throughput has already picked up, but suddenly the kind of prices which are prevailing now in the period, so almost for the past one year. So that is causing a little bit of disturbance at least utilization of up to 30%, 35%.So we are really looking at that because the price of gas is so high that the refineries and other customers who are using, they are finding other alternatives who are more cheaper as compared to natural gas. So maybe after 2, 3 months when we find that prices are less, then they start picking up, getting more natural gas than other fuels. So this is the reason that it is not being utilized as we said earlier that we will get of 30%, 35%. But certainly, the prices have played havoc with natural gas in that region, and that's why that the utilization level is not that high, which we anticipate it will be the range of 30%, 35%. It has gone up to the level of 33%, 34%. We are now -- again, which has come down to 19%. So we thought it will further move upwards, but it has not because of prices of gas. But we hope that once this crisis is over and when the price is down, then people will start using natural gas in place of other fuels.
Sir, in terms of that pipeline consideration, specifically the [indiscernible]. But right now, the entire thing is done as per schedule [indiscernible]?
What's your question? Actually, it is not very clear. Can you speak again? What is your question?
So when they commission the pipeline, [indiscernible] submarine crossing, so there will be [indiscernible] so that entire field will be considered as a proper pipeline over a period of time. So in terms of the technical configuration of that pipeline, has it been completed as stated in the original design?
I have to see it because we have -- that's a very, very good question you have asked. That time [indiscernible], and the new line was created along the bridge. But it was increased because the condition of rock over there, the HDD was not possible, so we had promised that they will lay in a period of time. In the meantime, they have just built the pipeline around the bridge -- around bridge. So I think I will confirm to you later on, but I will have to ask those people whether they have done it or not.But that is not impacting -- impacting the consumption because consumption is not that high. So even with this kind of lowered pipeline, which they have put up right now, whatever is there, it is not impacting the consumption pattern in that reason. But of course, it has to be a diameter of almost 18 inch or 34 inch, so that will be done in the future. I have to confirm it to how far they have done it. It was only 1 kilometer maximum or half kilometer. Not more than that.Maybe that -- they have completed, but I'll have to confirm with those people.
Okay. So the next part is, if you look at the global energy market, a lot of countries and companies right now with the liquefaction project [indiscernible] Russia. So in India we are kind of lagging behind, what are your thoughts on contracts, additional volumes from new energy projects, which are now getting completed? And is there any progress in terms of our projects in the first half? What is the status now?
You're talking about liquefaction terminal in Russia and other places?
Yes. So in terms of the global market, the -- [indiscernible] portion of LNG. I understand it's a pretty tight market, so are we right now dragging behind? [indiscernible] gas has to be renewed in 2028.
What I could get from you is that projects are coming up, no doubt. As well as LNG is concerned, this is not an issue. And projects are coming up, the prices now as you realize are very high. But as far as our contract is concerned with Qatargas, we are seeking to expand it after 2028. We have already started discussions with Qatargas, and we are in talks for extending this contract for the future period. And apart from that, other terms and conditions will also be discussed by the price of natural gas, which will be determined -- how it has to be -- it should be brand based or it should be mix of having a [indiscernible]. So like that, those issues have to be finalized. But we are very, very serious about extending the contract beyond 2028. This we have conveyed to our counterpart in Qatargas, and they are in discussions with us. And perhaps we have a timeline of December 2023 by which we have to confirm that we are going to extend it. So from now onwards, we have started discussion, and we are hopeful this will extend. This is a very good contract for India, looking at the kind of prices and even the distance, which is there. It's a very minimal shipping cost for bringing LNG to India, so this is the most favorable contract India has ever had.
The next question is from the line of [Varadarajan from Antique Limited].
On the Bangalore front, the pipeline, what is the status today? And what is offtake that you guys see there?
You're talking about Bangalore pipeline?
Yes, that's right.
Yes. Actually, that part is going on. GAIL is already doing it and fraction up to Coimbatore is complete. And from 250 kilometers from Coimbatore to Bangalore, which is to be completed. The only issue is that, again, the political issues are coming up. So they have suggested instead of going through the fields of farmers, they've suggested that you should take the pipeline along the highway. So all those things are being settled by GAIL, and GAIL has committed that they will complete it. The only thing is that there are certain issues which has to be -- which are to be sorted out. But we are hopeful that in the next 1 year, maximum 2 years, it should be complete.
And as for user period thing is concerned in the hedge. If you could just like give us a corresponding volumes which are currently there? I am sure you have given it in the past or just for a continuation sake? What are the volumes which are currently at Dahej? .
Actually, I'm not getting your voice clearly, there is an issue. Can you speak loudly, because I can't understand your question.
Yes, is it better now?
Yes. What have you spoken I just understood.
No, I was referring to the user pay. What is the corresponding volumes which are currently under user pay? You have given it in the past, but I just wanted to get a confirmation on that.
User pay volume you want?
That's right.
It's the rate of tariffs we are charging, Dahej tariff is around INR 54. So with that, you can go work it out.
No, the volume, sir. What amount of volume is on the user pay currently?
[indiscernible] on the last year.
I'm sorry, sir?
You are meaning to say, in the last year, what is user pay volumes?
Yes. So even in the current year as well, what is the quantum of volume under the user pay.
I take the calendar year. So what has happened that from January to December, what we have shortfall in the capacity utilization, that has been charged in user pay in the -- on the last year of the month of December 2021. So accordingly, we have done. For exact volume, I think we have, but we can work it out. We will have to see how much is the volume because customer-wise, we have done differently.
So if I remember it correctly 15.74 million tonnes is on the user pay.
57 -- Last year, 50,000. [indiscernible] It's almost INR 55, you can work it out. So volume is not a big thing. Last year, it was INR 55 crores. Yes, this year it is INR 347 crores, last year it was INR 55 crores. This is as per contract. There is no need to go into the volumes and how much volume we have done. All those things have been done, and we can work out based on the figures we have given.
[Operator Instructions] The next question is from the line of Amit Murarka from Axis Capital.
So my question is again on user pay. So you said that during the year, it is allowed for offtaker to make up the lost volumes or shortfall of volumes in the rest of the quarter. But let's say if your terminal is running full and there is a request for the traditional volume in a particular month or a quarter but you are not being able to fulfill that request, so what happens in that situation? Would you still charge the taker pay? Or will that be up for discussion and waiver?
We will charge it because if we have slots then only we can accommodate them. Otherwise, they have already lost the opportunity which we have provided for.
Sure. So it's around basically a basis of availability of slot?
Yes, that is true because we can accommodate then we certainly do that. But otherwise, if they have not got their cargo as per schedule, it is their fault. Therefore they will be subjected to user pay charges at the year end.
Sure. And also on the regas, you had earlier mentioned that you were requesting them for the pending cargoes, 46 cargoes. So was there any progress or you're still discussing?
So it's cargoes, I'll comment on it.
No, so there was some shortfall of cargo -- of offtake from last year. So I believe from the volume.
Yes, bringing the cargoes from last year, there is shortfall this year. Yes, yes, that we are conferring with them. And in fact, it has been to the extent of almost 8 cargoes which has been there in shortfall.
So 8 cargoes, okay.
But of course, we have certain other cargoes also. If you look at other cargoes which we have not brought since 2015, it is the total number is 50 and 8 cargoes last year, so 58 cargoes this year. And we have thought to bring in 46 cargoes hours from Qatargas to supply 46 cargoes in this current calendar year -- contract year, which they said they will consider we have given a request to them, to give us 46 cargoes out of the 58 cargoes, which are -- which will be shortfall in the previous year.
Okay. So as of now, there is no progress on that front then?
There is no progress or they have not conveyed anything to us. But if they convey, then certainly we will share with you.
Sure, sure. So I guess it is a little fair to assume then if the LNG prices remain that high, they will probably not be looking at -- ?
Because LNG prices are high and they have commitment on it, so certainly they will have some scope for that, they will give us. If they don't have the volume with them, how can they give us. But we have requested them.
[Operator Instructions] The next question is from the line of Mayank Maheshwari from Morgan Stanley.
Just had a question regarding your CapEx for the next 2 years? And how are your banks thinking about dividends as well considering your current projected CapEx?
See, it's not a big issue. As far as CapEx is concerned in the next 2, 3 years, we can meet the CapEx from our internal generation. Of course, if required, we will also take a loan so that we can meet the project requirement, but we will try to give the dividend as much as possible to the extent possible in the next 2, 3 years. Beyond that, we cannot create right now, but of course, as and when we have cash addition with us and certainly project cost would be only limited, then we will continue to pay dividend. So there is no -- there should not be any concern as the dividend payment is concerned. But for the big projects, if it's all like petrochemical you are talking about, we will go for debt also. So it will largely only for internal generation. We'll go for that which will be in the range of 60-40 debt equity ratio or 70-30 maybe. So accordingly, we will plan that but for the big projects, we will certainly find funds somewhere in that market. And otherwise, if there is a small project plan, we can make it through our internal generation, which we are doing right now also for the banks like INR 1200 crores. So we are not seeking any loan from outside. So like that, we have jetty also, we will not seek any loan from outside. But certainly for a big project like petchem comes, then we will think about debt also.
Okay. And sir, do you have numbers for fiscal '23 and '24 that you can guide us for on the investment side? .
Yes, we can -- right now, if you look at the CapEx, which has been 20 to 23, which may be in the range of INR 1300 crores to INR 1,400 crores, this is how we are setting. And maybe in the late '22, '24, we will come up with that number. But '22 to '23, I can say that we can raise maximum INR 1,500 crores, maybe less than that also.
The next question is from the line of Vikash Jain from CLSA India Private Limited.
Sir, so this -- can you just tell us this user pay, the total debtors which are sitting over there. How do we suspect that these will get settled? Will we basically allow them to offset this for future capacity usage? Or how do you suspect that this will get settled?
Right now, we have -- we are hopeful that they will pay because contractually they are required to pay. So as of now, there is no concern, but of course, it gives us a new reason for that. As I've said earlier also that in the first quarter, there has been a pandemic impact and certainly the consumption has been low at that point of time. So maybe for 2,3 months the request is made, we can think of it. But otherwise, we don't foresee any reason why they should not pay as per contract.
And what is the total debtors? And broadly, if that has to be settled from that perspective that you have?
Total debtors you are asking, or you are asking what is how much debt is there?
No, I mean, debtors are -- for this reason, user pay debtors?
User pay I told you INR 332 crores, INR 15 crores we have already realized of user pay charges.
INR 332 crore of this year, and the old one is only whatever you have mentioned on point 5, which is the --.
Yes. It was mentioned in the note, answer has been given.
Okay. Okay. So maybe some adjustment because of the first quarter is what you foresee broadly?
It may be because it's not right to say that whatever will be the situation, we have to bring in because there has been a COVID impact, and there was a lockdown in that period. So consumption levels had gone down at that point of time. But of course, again, that is a matter of discussion. And again, it is up to the Board to decide. So we cannot predict right now, but of course, if there is a request and it will be only to that extent. And maybe only those cargoes we may allow them bringing them in feature. And -- so that's all what we can say. Otherwise, as of now, as per contract, these are all payable.
Ladies and gentlemen, we will take that as the last question. I now hand the conference over to Mr. Mohit Mehra for closing comments. .
On behalf of IIFL Securities, I would like to thank the management of Petronet LNG for giving us this opportunity. I now hand over the call to the management for the closing comments.
Thank you. I think we have tried our level best to perform whatever that's possible this quarter, and we always try to meet the expectation of investors. And this is the reason that if you look at our performance, it is not as if it has come automatically. We have made a lot of efforts. Our Marketing team, our Operation Maintenance team, all have worked really great. So that's why we are able to get this result. I don't know how far this is reflected in the prices of share. But if you look at our efforts, it is immense. You can imagine that nobody expected to -- that level that we can make a profit to the extent of INR 1,144 crores in this quarter. But still, we have made it somehow. So this is what I'm saying that every time our entire team is tirelessly working towards increasing the wealth of shareholders, to increasing the value of share of Petronet LNG, and we try to do whatever best possible so that every year, we create a recovery fees, and for so many years, you'll find that we are increasing our efforts and -- it is effort and that we are better than last time always. So there has been a growth of almost 30% in fact and 39% percent in PBT. We hope this to continue, and we will work out where we can make money, even in this -- even though the capital utilization is low. But still, we are making money in -- from other things like trading and other businesses. This is sure that our effort is always there, that we should grow as far as possible and we should -- we should be unturned in making the profit so that our investors always see that they will grow with the company. And with the new projects, which will come in future will further increase the revenue aspect of company, and the profitability outlook will be increasing. So I think with all that, I just expect cooperation from all of you to give a positive outlook to our -- this company and these kind of people that we are working professionally. We are trying to make everything out of the market. And perhaps we have so many plans to do in future, and you must be knowing that we have planned to have an office in Singapore also for which the Board has already given an invoice. So we may have an office in Singapore which will be in the business of trading LNG.All those things are being considered by our management, so that's what I just wanted to confirm. Thank you very much.
Thank you very much. On behalf of IIFL Securities Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.