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Petronet LNG Ltd
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Ladies and gentlemen, good day, and welcome to the Petronet LNG Limited Q4 FY '21 Post Results Call, hosted by Antique Stockbroking Limited. [Operator Instructions] Please note that this conference is being recorded.I now hand the conference over to Mr. Varatharajan Sivasankaran. Thank you, and over to you, sir.
Thank you, Mallika. Good afternoon, everyone, and my apologies for the delayed start. It's my pleasure to welcome all the participants and the management to the fourth quarter results conference call. Request the management to give a brief, and then we can move to the Q&A. Over to you, sir.
Hello. Brief will be given by our Director, Mr. V.K. Mishra.
All up there connected? Should I start?
Yes, please sir.
So our Dahej terminal plant is 849 TBTU this particular financial year '21/'22 against 896 -- 885 in the previous year. So there has been a downfall as compared to previous year. But everybody knows that there has been obvious reason why it has come down because of pandemic, long lockdown in the first quarter. So these are the reasons which has impacted our operation this year. And overall, if you look at LNG process in our terminal, both Dahej and Kochi, it has been 896 TBTU as against 927 TBTU in the previous year.And if we talk about the quarters, then this quarter Q4 2021, it has been 204 TBTU as against 206 BTU in the corresponding quarter of previous year. And it is below the third quarter, this processing of LNG, which was 222 TBTU. Overall, throughput, if you look at the current quarter has been 218 TBTU and against 219 TBTU in the corresponding quarter, and it was 235 TBTU in the previous quarter.And the PBT is the highest ever, and it has been INR 3,968 crores as against INR 3,111 crore in the corresponding year, last year. So it has been up by almost 28%. It is highest ever PBT, which we have registered this time. And if you look at PAT, it has been INR 2,949 crore as against PAT of INR 2,690 crore in the previous year. So this has been the annual results.And then if you look at the PBT of Q4, it has been INR 866 crore as compared to INR 486 crore in the corresponding quarter. And PAT has been INR 623 crore as against PAT of INR 359 crore in the corresponding quarter of the previous year. So again, I want to highlight that this year, we have declared a final dividend of 35% on paid-up capital. So it is around 3 -- it is INR 3.5 per share, which has been declared, and the strong financial results are basically achieved because of our robust operational efficiency and effective commercial planning by the company.Now house is open for questions. You may please proceed.
[Operator Instructions] The first question is from the line of Harsh Bohra from VT Capital.
So sir, can you throw some update on the Kochi tariff, last year, you have -- sorry, last quarter, you have told that like within a quarter, we'll reach to some conclusion. So is there any update on it?
It's still -- our talks are going on and discussions are on. But as of now, we are charging the tariff, which was there INR 83.10 for Kochi tariff. And right now, in this quarter, maybe some solution will be there. And of course, we'll come back to you whenever there is a consensus reached on that. But till then, if there is no consensus, then certainly whatever tariff we are charging, it will continue. It cannot be reduced.
Okay. And second question was regarding the Kochi terminal utilization. So in this quarter also, it was around 22%. So like when do you expect it to ramp up to near 30% levels, as you have guided earlier?
Yes. Actually, 30% is our target. But as you know, that the customers are coming up, and they are taking slowly and perhaps they are still to take their highest requirement of gas. So we can say that maybe 6 months of time or maybe this year-end, it will be almost 30%. But as of now, 22% is there. So I think it will further improve in the future. But at the same time, there's been an issue because if you look at the spot prices in the market, it has been very high. So consumption is a little bit low in terms of that spot cargoes and short-term cargoes are not coming to India. It is slightly depressing because [indiscernible], which is one of the major consumer in Kochi, it has got some restriction that it cannot operate if the price is higher than $8. So that's a hindrance. And if you look at the spot prices, it is in the range of almost -- more than $10, $10.5 almost. It is very high. So it is a little bit causing a concern to us because we are not able to ramp up the capacity. But if the prices are reasonable, certainly capacity will also take. And in future, of course, we hope that this Bangalore pipeline will be there, which GAIL has promised that they are in the process, only one section Coimbatore to Bangalore is to be connected around 250 kilometers of the pipeline. So as that section, maybe 1 year or 1.5 years should be complete. So then perhaps we will be connected to the national gas grid. And certainly, the consumption level will be much higher. So that's the case.
The next question is from the line of [ Avdhut Sabnis ] from InCred Capital.
My first question, sir, relates to the dividend payout. So you paid the final dividend INR 3.5 a share. The full year was probably INR 11.5 which is 59% payout. That compares to 70% payout in the earlier 2 years in FY '19, FY '20. So could you give us -- shed some light on what sort of prompted the Board to flash the dividend payout? Is there some big CapEx on the horizon? Or is there some risk to earnings that the Board is what concerned about?
Actually, we have outlook of going for growth plans for the company. And because of that, we thought that we should have some results so that we can proceed with the CapEx plan we have. And because of that reason, we have a little bit reduced it from the previous year, but it's still a little not too less. Last year, it has been almost 125% of the paid-up capital. It is 115% this year. So it's only 10% differential is there. At the same time, we have huge CapEx plan in time to come in next 5 years. So that's the reason that we have capped it a little bit low as compared to previous year.
Will you give us any sense of what this huge CapEx plan is all about? So we have -- it's not -- I don't think we have shared it.
We have been discussing. But now we are going aggressively on those plans. So if you look at one by one, I can tell you that we are planning to have 2 more tanks in Dahej. The CapEx will be around INR 1,240 crore. Then we are planning to have jetty -- additional jetty will be having a CapEx of INR 1,700 crores. Then we have plan of Dahej expansion from 17.5 MMTPA to 20 MMTPA, which has the CapEx of around INR 220 crore. Then another expansion plan, which is basically phase 2, it will be from 22, 22.5 MMTPA, which will have a CapEx of INR 890 crore. And then we are also expanding our -- this tanker capacity by having more loading bays in the Dahej and Kochi terminal approximately 14 loading bays will be there for supply of LNG. So for that, we have capped around INR 400 crores.And then if you look at -- we have a very ambitious plan of having LNG station across the highway. So we are planning to set up around 1,000 LNG station next 5 years. Maybe we'll be ramping up 1 year, 2 year maybe, initially it maybe 2030, then it may raise up to 309,000 LNG station. So for that, also, we need CapEx, which is also capped at around INR 8,000 crores.And another project which we have signed with Ministry of Petroleum, we have signed MoU with Ministry of Petroleum and Natural Gas is the compressed biogas projects. 100 CBG projects are likely to come in the next 3 years. So it is also having a CapEx of around INR 4,000 crores. Then we have a plan of having 1 terminal on the East Coast, which will have a CapEx of around INR 1,540 crore. And one more tank, we are planning to have at Kochi also. Right now, we have 2 tanks. So additional tanks will be there. It will have a CapEx of INR 700 crores. So these are the CapEx plans because of which we feel that there will be a requirement of funds in future. And perhaps it will have our own funds. It will be deployed there. And then we'll go ahead with our growth plan.
My second question relates to the note that has put in this result relating to some dispute on the take-or-pay charges. They said around INR 198 crores that you have invoiced. Okay, you haven't got INR 143 crores -- INR 144 crores. Could you give us some color on this in terms of when did this dispute arise, does it relate to FY '21? Or was the dispute earlier as well and is not something disclosed right now?
Actually, you have rightly said, this is relating to year '20/'21 basically. And of course, '19 also is there, '19, '20 are the years which are concerned with that. The only thing we are in discussion because they are our promoters and perhaps this is not relating to take-or-pay charges. This is basically relating to new pay charges. This is regarding the capacity booked in our terminal, which has been in 2 key customers -- 2 customers have not paid. And they are saying that it should not be levied. But as per contract, if you look at, they have been charged. And as per contract, they are liable to pay. So we are saying that they should pay, and this is our hope that they will pay in future. We are still in discussion. Perhaps it will be resolved very shortly, maybe in this quarter.
And sir, lastly, on the Kochi terminal dispute, okay, it's been going up for 2 years. As I said, we have been sort of waiting for the ultimate outcome. In the interest of fairness and for us to evaluate the 2 risks on this issue, could you actually share what the offtakers are demanding. We have -- we know from your side what you are asking for. Can we get the other side as well in terms of what are offtakers asking for?
Yes. Yes. Actually, I was just telling you about it what's there, it's a tariff at Kochi, if you look at initially, it has been in the range of INR 104. I'm talking about 2019. So what happened that our customers, offtakers raised an issue that other terminals are charging less than Kochi, and tariff in Kochi is very high, so they should reconsider it and reduce it. Based on their request, we thought of it and then we brought it down to INR 79, INR 79.14 in 2019.Now what happened that -- again, they are insisting that it should be even below that. So that is an issue. We told them that, if at all, they want a reduction in the tariff, they will have to commit more volumes to our Kochi terminal. This can only happen when they commit more volumes at the Kochi terminal because it is directly proportionate to the volume handled at Kochi terminal. So it cannot happen that the volume is hardly we are utilizing 22% in the last quarter. And you say that tariff should be as well as Dahej, which is around INR 54. So this is not possible. It's directly proportionate to the volume handled at that terminal. So we asked them to increase the -- this cap -- utilization of the terminals, so that we can think of further rationalizing the tariff. So they have -- in fact, we have planned the proposal also. And if something materializes, and certainly, we will resolve this issue also very shortly.
Would I be right in assuming that instead of INR 79, they are asking for INR 54?
They are asking for equal tariff, Dahej, but that is not possible with current handling of the volumes at Kochi because the volume handled at Kochi is very less. If you see, it's only 18% throughout the year we have utilized the terminal. Right now, if you see that kind of handling at Kochi, it is in the range of almost 3 to 4 MMSCMD. So this is the range which it is operating, which is very less as compared to the capacity available. So once that utilization increases, then we can consider this request also to rationalize the tariff. But we hope that unless until they commit the volume, it is not possible to reduce the tariff. And we will not just go down by saying that we'll reduce it without committing the volume.
The next question is from the line of Probal Sen from Centrum Broking.
Two questions. One, you spoke about just one more tank at Kochi for INR 700 crores. Now correct me if I'm wrong, over the next 3 to 4 years, the visibility of utilization even if the Kochi-Bangalore leg of the pipeline also gets constructed and completed. Our understanding was that the utilization would get up to around 50% to 60% in a base case scenario. So given the capacity we already have in the terminal, just wanted to understand the need for setting up one more tank? That was my first question.
Okay. Basically, we are setting up the tank because there's a lot of arbitrage available in the market in the right time. So see, just have some more -- 1 or 2 cargo with us and traded at a time when the prices are good and buy it at a time when the prices are very low. So that can give us profitability to a great extent. And perhaps that is the reason that we want more tanks and so that we can have our own cargoes stored there. Whenever there is a right opportunity coming up, we can sell them. We can buy spot or short-term cargoes there. So basically, it's a more of a storage. And whenever it is right time and whenever the prices are very nice, we can sell it. So it's just to encash the arbitrage which is there in terms of prices -- spot prices, so that we can increase our bottom line by doing so.
Okay. Right, sir. And the second question was with respect to the CapEx on the LNG stations. Now sir, previously, if I remember correctly, the plan was to sort of demonstrate the ecosystem, set up a few stations and demonstrate the working of the model and then essentially tie up with third parties, where Petronet would essentially be the guy who supply it and trade this gas. And there will be other OMCs or other players who would be sort of setting up the stations. Has something changed in the thought process that we are looking to go it on our own because INR 8,000 crores actually seems a fairly large number given the scale of operations that we have today?
Yes, there is a change in thought process. And we are, in fact, intending to go on our own also. In some cases, we may tie up with the OMCs and CGDs, but we want to go alone also in some of the cases, most of the cases. So that is a change of thought you can say, that we want to connect with the customer directly. This will come in the retail business also, LNG retail business.
So essentially, we are now basically venturing into fuel retailing in a big basis...
Yes, it is because our forte is LNG only. And if we do trade it and do with somebody else, they may not give a fair share to us. So it is not possible to go with the company because why they will give margin to us. So that's a big thought we have given and then found that we should go on our own. Because earlier, there was a constraint that there was a restriction because of CGD being awarded to various entity. And perhaps now clarification has come from PNGRB that anybody can set up LNG station anywhere in India. So that particular clarification has paved the way for setting up our own stations. And basically, we thought that we have LNG terminal, and we can promptly supply to our LNG station. So that is the thought process, and this is the change of our thought. Earlier, we thought we'll go with somebody else. But now on our own we want to go on.
Okay. And -- all right, sir. And the last question was, sir, with respect to this quarter results, did the resurgence of the COVID thing in March has an impact? Or this was more -- the drop Q-o-Q was more a function just of the spot LNG price increase, which led to third-party regas volumes being lower than what we perhaps would have liked...
It's more of -- I would like to emphasize that more because of the higher spot prices, because lockdown and this consumption reduction was in April almost more than May. In fact, March was relatively free. So I feel that it is because of the prices being so high that nobody is using LNG, spot LNG. And if you look at our long-term contract, they are much, much cheaper than long-term LNG. And this is spot LNG, and it is around $1.5 below that. So we see that people are not using. And the Indian customers are very price-sensitive and especially power sector and other sectors also, fertilizer also. So they tend to use less gas whenever prices are very high, and they will go for the alternate fuel.
[Operator Instructions] The next question is from the line of Nitin Tiwari from Yes Securities.
The first question is a bookkeeping one. What was the regas revenue, service revenue in this quarter and the number of Kochi cargoes which were diverted to Dahej? That is the first one.
Regas revenue, I will ask, Mr. Debabrata, my colleague, he will inform you. But second thing you are asking, the diverted cargoes, it is around 9 cargoes which have been diverted to Dahej terminal. And second part or first leg of the question will be answered by Mr. Debabrata Satpathy.
Yes. The regas revenue was INR 2,307 crores in total.
This is for the entire year?
Yes, yes, for the entire year.
Okay, sir. And sir, my second question is on the LNG terminal stations, the fuel retailing station that we spoke about a couple of moments back, and staying on the same topic. So correct me if I'm wrong, these stations that you're going to open on the [indiscernible] would be serviced by virtual pipeline, which is like LNG [indiscernible]. So in that case, would the economics work out like for all the stations that you would have planned across all the [indiscernible] the 1,000 stations, if you...
Yes. Yes. This question will be answered by Mr. G.K. Sharma, our CGM Marketing.
Thank you, sir. Basically, if you see economics for virtual pipeline is very well competitive even up to 1,200 kilometers from the terminals. And if you see East-West terminals, present terminals and likely to come, almost whole of India will be covered...
Sorry to interrupt, sir. There is some sort of disturbance coming from your line.
Pardon me? Is it okay now?
Yes, sir. You may go ahead. Thank you.
I was telling based upon the economics, even up to 1,200 kilometers if a station is located, on an average, the economics is workable. And seeing India's present and likely to come East and West side LNG terminals, it will be worth because all of -- almost whole of the India will be covered within 1,000 kilometer radius.
Okay, sir. Fair enough. And if I may just slip in one, what is the utilization level at Dahej in April and May? How it has been doing in the lockdown?
Right now, we are in the month of June, and we are very close to the financial -- closing of the quarter. So maybe [indiscernible] can give a normal -- I mean generalized reply, but probably we will not be able to give the precise reply to this.
Sure, sir. A broad sense is okay, sir.
Actually, there has been some impact of this particular month because of lockdown, April, May certainly. But now it is recovering. In the month of June, we are able to recover. But of course, it has impacted us to some extent. Capacity utilization was there.
Sir, was it like similar to what was in the last year or better than that?
Actually, if you look at today's utilization, it has been almost 88% of Dahej terminal. So that's much I can say.
The next question is from the line of [ Sumit Vora from Smartson Capital. ]
Sir, my question more is from an investor point of view, so how do we see this [indiscernible] in terms of profitability, you have been growing at a pretty steady rate over the last 3 years. So sir, how do you basically see this, because of this CapEx of INR 8,000 crore, which you have -- having just highlighted to us, so do we expect a sharp jump in interest costs? And what's the CapEx for the year? Because if my understanding is right on -- what I see is that our CapEx, what we've been doing is about INR 150 crores to INR 200 crores broadly on a yearly basis. So how do you see that shaping up?And sir, second question of mine is basically more to do with the press reports, which we hear about BPCL. Now BPCL is one of our promoters who owns 12.5%. So sir, I mean, if you can please help understand what is happening on that front? Are they looking to sell our stake? Are we talking to potential investors? If you can just give some color on that, sir, would be very helpful?
The first question, you are saying that LNG station, we are putting up CapEx of INR 8,000 crores. Basically, this is our idea that, that is a segment which is not very price sensitive. Because if you compare LNG uses in long-haul trucks and buses, it is basically having arbitrage as compared to diesel.So when we compare this LNG as fuel, then we have to compare it with diesel. So it is always almost 30% to 40% less than that. So people are ready to do it. Only thing that it's a chicken and egg story, whether an LNG station has to be put up first or first let the long-haul truck should be converted to LNG fuel. So this is something -- so we are taking initiative initially. We have put up some station, maybe 25, 30 stations. And then we will ramp up in 3 years and 5 years then. So it is our plan that it's a segment which is less sensitive to price because of comparison with diesel. So what we feel that even if we have a gas LNG, which is available at $10, $11, $12, it will also be good enough because it is even better than diesel cost. It's 30%, 40% less than that. So this is the basic reason why we want to go in a big way in this sector. So this is one thing. Ultimately, this is going to replace the diesel. This is the intention. And perhaps that is also environmental friendly. So that is the reason. First question, I've answered.The second one you are asking?
Sir, my second question is, I mean, what we hear about our promoter -- I mean one of our promoters, BPCL, they own 12.5% stake. So what's happening on that front, sir? If you can just give some color...
Actually, this is something which you should ask from BPCL then PLL because they are holding our share. We cannot tell you what they are doing. But...
No, no, I mean, the only reason I asked...
We are not selling it. We are not selling it.
Okay, sir. Okay, sir. And sir, just one thing on the first point, which -- I mean, which you mentioned about the CapEx. So sir, so what's the CapEx number, I mean which you think we should look at for current year and next year onwards?
Debabrata, you please reply to this question.
Yes. The current year CapEx is budgeted at around INR 530 crores. And the next year should be -- I mean, with the progress of the projects, the next year estimate is somewhere around -- the tank project commences should be somewhere beyond INR 1,000 crores. But with the new plan that has been given now, we will come back to you on the revised CapEx numbers for the forthcoming years, basically.
The next question is from the line of Manikantha Garre from Axis Capital.
Sir, my first question is with respect to the Kochi terminal. Have we taken the 5% hike from Q1 onwards? And with respect to the tank farm there that you have talked about, how long can we store the volumes at this tank form before in situ operation or some such negative impact could be there? That's my first question, sir.
G.K. Sharma, can you answer please?
Sir, could you please repeat your question again?
So sir, have we taken the 5% hike, the regasification hike for Kochi terminal from Q1 onwards?
Yes, currently, it is as per the contract and we have taken.
Okay. And how long can we store LNG volumes at the tank farms? I mean, for example, you have mentioned that the third tank farm, which we are planning, we may use that to store LNG and use the arbitrage opportunities to sell. So I wanted to understand how long can we store volumes at that tank farm before any in situ evaporation or any such negative impact on the volumes could be there?
See normally, what we offer, if a capacity holder is bringing the volume, so on an average within 30 days, they had to evacuate their whole cargo. And as regard new tank in plant, it would be seen what arbitrage possibility and opportunity to earn from asset-based trading is possible. Then that will be decided. Because your time is money in that sense. Otherwise from boiler purpose, 1 month is a present practice.
Okay. Understood. And second question, sir, I think you made a statement to the press saying that we are going to bring more volumes from Qatar and looking to -- not looking to invest in the Qatar LNG projects. So just wanted to understand a little bit more on the pricing side here. When I analyze recent Gunvor and Vitol deals with Tellurian, the deals were made at 11% to 11.5% slope to the crude prices. So roughly, is that how you're looking at -- I mean has there been increase in the slope in the recent past in terms of pricing for the term contracts?
No, it's not like that. Whatever statement we have given, it was in response to some other queries. But of course, we have not decided so far from where we will source it. But right now, if you look at the market, long-term prices, Chinese companies, Sinovec -- Sinopec and others have, then the contracts with Qatargas and others, and these are in the range of 10% growth, maybe 10.2%, 10.19%, like that. So it should be in that range only now. So I think whenever we will do any sourcing of LNG, it will be in the range of 10% or maybe less.
Sure, sir. And just one last question if I can squeeze in. Can you give the update on the Sri Lanka LNG project discussions because I've seen a press release from their cabinet, which actually highlighted that for the best container terminal project has been awarded to another group, and they themselves may invest in the LNG project as well. Would you have any comment there?
Sri Lanka project is, of course, was there on our radar. But in fact, what happened recently that they have changed the goal post. Earlier, there was a plan to have FSRU terminal in Sri Lanka, which is basically shore-based. But now what they are saying that it should be 5-kilometer in the deep sea, where the terminal has to be capped, FSRU. So that is a big change. It is 5 kilometers inside the sea. It's a very difficult thing to do. And perhaps in -- across the globe, if you see, pretty less structures are like this, which are 5 kilometers away from the shore. Normally, we have our expertise in shore-based or land-based terminal or it may be FSRU also, but it should be on shore of the sea. So that was our forte. But now what they are doing, they are -- they have floated a tender. They are saying it will be 5-kilometer inside the sea. So that has dampened our interest now. But let us see what happens.
The next question is from the line of Maulik Patel from Equirus Securities.
Three questions, sir. On these LNG stations, which you mentioned about 1,000 stations over the next 5 years, and the CapEx is around INR 8,000 crores, do you think that -- in the -- so power station CapEx is close to around INR 8 crores? That was the rough number? Or the initial CapEx will be higher, with the subsequent CapEx being lower? And what kind of then payback? And you said that LNG taking the lead in setting up the entire ecosystem because it's always a chicken-and-egg solution and problem. So I mean do you think that our payback period will be significantly lower in the initial years?
Initial years, it may not be lower. But once it is set out, then perhaps subsequent registration will be having a lower this payback period. And perhaps, that is our idea that we should put up the station because there was a number of trucks increases. And perhaps that will be the key to recovery of investment, and that will be helping pay back. So our idea is initially, it may not be very low because number of trucks will be less. Once the people realize that there is a saving of 25%, 30% as compared to diesel, then people start converting their trucks into LNG fuel trucks because this was the case in CNG also when initially it was introduced, [indiscernible] many -- less cycle had CNG. But people realized the economic benefit it is having after putting up this CNG kit, people started having more and more CNG cars. So this is the kind of thing which may take 1 or 2 years. But then perhaps after 2, 3 years, people will come to know and they will on their own convert their trucks into this LNG fuel gas. Then payback will realized.
Sir, in the same context, in CNG, when you mentioned that there was -- initially there was resistance or lack of enthu from the public. But in many cities, it was, particularly Delhi where the public transportation was asked to convert to the CNG, do -- are we looking for such kind of incentives or any kind of a policy from the Government of India which promote LNG for a long-haul trucks?
See, policy is -- of course, as you say directly, there is no policy, but government is committed to increase use of LNG as seen for long-haul trucks and intercity buses. They are committed because what is their thought process that ultimately LNG, if it is used, there are 2 benefits -- 3 benefits will be there. First, it will address the environmental issue, the pollution level which is increasing, that can be reduced, first thing, for which government is already committed in COP 21 that they want to reduce the pollution level by 33%, 35% by 2030. So those commitments are there, which has to be met.And then perhaps second issue is that they want that it should be gas-based economy. Because ultimately, it will result in economic benefit to the government also because the cost of procurement of LNG is less than crude oil. So they can reduce their dependence on crude oil. And they can increase the share of natural gas so that it will also help in saving the foreign exchange while importing LNG rather than this importing crude oil. So government is committed. In fact, government want that we should put a bit. In fact, 50 LNG stations have been inaugurated by your Honorable Petroleum Ministry -- Minister. So it is very clear that government wants that it should be LNG, which should be used on the highways, more and more LNG should be there. And perhaps that will save foreign exchange to the government as well as it will also address the environmental problem.
Sure. Sir, just one more last question, if you permit it. Sir, can you just give your view in the context of increasing domestic gas, which we are seeing from Reliance? And a lot of gas is going to the fertilizer segment and at the same time, to the refineries and petchem, that incremental domestic gas. And also in the context of the new upcoming terminals, which you have talked -- or everyone has talked about. How do you see the LNG's positional with the same 2 threat, one is the rising domestic supply and the competition, your view, sir?
Yes. Actually, first thing, you are saying that domestic gas availability has increased. That is true. Almost 22 MMSCMD has increased. And perhaps more gas will come maybe next 1 or 2 years, maybe 3 years. So this has impacted as of now. But in long run, this will not be true. Because the demand of natural gas is much more than the availability of natural gas even after this new find, which is there by Reliance, ONGC. So what I feel that in short run, you can say that it will reduce some import of LNG. All these spot cargoes will be affected by that or short-term LNG will be affected. But in long run, maybe in next 3, 4 years, 5 years, then ultimately, the requirement of gas is much higher. It will be required by 2030 in the range of almost 70 to 90 MMTPA. Today, we are utilizing only 46 MMTPA. So it will be almost double.So much of production can not be sourced through domestic process. So this is why this assessment that for the time being, offshore's availability has increased. And perhaps spot cargoes because their price is very high right now, so maybe that will be impacted. But if you see the pricing of this domestic gas also, it is not available at this $1.79 per mmBtu. It should be in the range -- higher range. It is around -- right now $3.62. But in next 6 months, it will be in the range of $5, $6. Because this is a deep sea, ultra deep sea and high temperature, high pressure gas, which is slightly costlier than normal gas, domestic gas. So what I'm saying is that, of course, because of their being very high spot prices and all, the difference is big. So initially, it may impact. But in the long run, the demand is much, much higher. So it cannot be met through domestic coking of natural gas.
The next question is from the line of Amit Rustagi from UBS.
Sir, my question relates to the volume which we are likely to sell through this retail outlet. So if you can give some ballpark numbers as what is our target for 2025? And what is our target for maybe 2030? How much LNG we can sell through these retail outlets if we have 1,000 stations?
If we have 1,000 stations, we have a target of almost 3.5 mmBtu of gas to be consumed there. This is our target. But maybe -- it may further increase because we are hopeful that this segment will size like anything because it has economic advantage to the fleet owners, truck owners. So I feel that this will go in a big way. And recently, many state road transport companies have also come along, and they are insisting to convert their buses into diesel. So that will be a big change. Some of the states have requested to us also, and we are looking at that. They want to convert their entire fleet to LNG. That is the kind of thing which is going to happen in future. So we feel that this has got a big potential. So right now, we can say that we have a target of 3.5 mmBtu LNG to be consumed in the next...
And sir, you mentioned about the lower payback time. So what's the payback time on these stations, if you're investing around -- I think you said INR 8 crore per station, which implies for INR 8,000 crore on this 1,000 stations.
I think G.K. Sharma, are you there? Can you please reply, what is the payback period you have fixed?
The payback period is less than 5 years, sir.
The next question is from the line of Sabri Hazarika from Emkay Global.
Yes. Firstly, I wanted to understand, so there has been a sharp jump in other expenditure and fall in other income. So this is because of Ind AS 116 impact. That's right?
116, yes, yes, that is one of the reasons.
Last quarter, there was Ind AS gain of INR 30 crores that is not there this quarter. Rather, there is a loss of INR 18 crores, ForEx loss. So that has been taken in the other expenses. And in the other expenses, there is a CSR provision of INR 56 crores extra than the last quarter. So and there was a dividend from a shipping company of INR 11 crores in the last quarter, which is not there in this quarter. So those are the main reasons.
Okay. The dividend income was on -- in other income which is not there for Q4?
Right.
Okay. And is there any inventory gain and marketing margin trading in the numbers that you give generally for the quarter?
Inventory gain, as we had told last quarter, it was INR 60 crores. And this quarter, there is a negligible one, about INR 4 crores of gain is there.
Okay. And second question is relating to your CapEx plan, so the projects that you have said basically implies close to INR 16,000 crore, INR 17,000 crore of CapEx over the next 4, 5 years. So that could lead to a phasing of like close to INR 3,000 crore, INR 4,000 crore annually, say, 2 years down the line. So is it the right assessment? Or do you think that it will be more extended in terms of aging?
Yes. I couldn't take your question. What you're saying?
No, I mean, all the projects combined is like close to INR 15,000 crore, INR 16,000 crore of CapEx, which you have announced. So -- and you have mentioned that in LNG retail, 5 years, you have given the target for 1,000 outlets. In CBG also, I think, INR 4,000 crores in the next 3, 4 years that you have mentioned. So if I go for a year-wise phasing, then 1 to 2 years down the line, your annual CapEx will become INR 3,000 crore to INR 4,000 crore going by this run rate. So is this the right assessment...
Yes. Yes. Next 2 years, let's say, you will see more than that. But initially -- because it will take some time. But initially, it maybe less. But 2, 3 years later, it will be, of course, in that way only.
Right. And regas service income, you mentioned INR 2,307 crore for the full year, right?
Yes. Yes. Yes.
The next question is from the line of Pinakin Parekh from JPMorgan.
Sir, 2 quick questions. First is given the view of projects that we are announcing right now or we are looking at in India, is it fair to assume that on the overseas projects, Bangladesh, Sri Lanka, Qatar, U.S. Tellurian are now firmly on the back burner?
See, it's not the case, I'm saying. But right now, we are looking forward to have some CapEx in India. Whenever opportunities will come, we will see that also. But as of now, there is nothing in discussion. So we cannot comment on that, that everything is now up. It's not like that. We can consider this the right thing. But as you know, that right now, investment in energy terminal outside India, anywhere outside India, it's not very lucrative. LNG is available at a very low price. It's only recently prices have increased. Otherwise, it is very low because the availability of LNG is plenty. It is there. So what I see that we cannot say that we are off. But of course, nowadays, it is better to source the gas without investment at a very low price. There is no incentive while investing in LNG terminal and then take equity LNG from there.
Understood, sir. Sir, my second question is related to CapEx. So there is a whole host of projects where the company is right now looking at. Cumulatively, sir, including everything, what is the total CapEx plan? And broadly, how does the company see this being spent over how many number of years? Whether it will be 2 years, 3 years, 5 years? We're just trying to get a sense of the total spending and the number of years.
Total spending, one of your colleagues has just mentioned, it is around INR 15,000 crores you have said. [ So INR 8,000 crores, INR 1,200 crores and INR 12,000 crores ] and -- almost INR 15,000 crores. But the span of this completion is around 5 years from now.
Understood. Understood. Understood. And lastly, sir, just to reconfirm, maybe you already mentioned in the call, but the Dahej 5% tariff escalation was taken, right?
No, it was taken earlier as per...
The next question is from the line of Vidyadhar Ginde from ICICI Securities.
My first question was on what do you expect the utilization at both Dahej and Kochi to be this year?
Sorry to interrupt, sir. Your voice is not that audible.
Now? Is it better now?
Yes, sir.
So basically, my question was that do you expect -- what is your expectation on utilization both at Dahej and Kochi in FY '22, given Dahej headwind such as this rise in domestic production, the high spot LNG prices which in the future will be higher than what prices are right now and the impact of coal, which at least will be there in the first quarter?
Yes. Actually, Dahej, if you look at, it is already booked to the extent of almost, I think, 15.75, almost 16 MMTPA you can say, it is already booked. So Dahej is already fully utilized. Only thing is that because the spot cargoes, which usually come, they are not coming now because of high prices. But otherwise, if the prices are reduced in future, and certainly, more spot cargoes will come to Dahej. But Dahej will continue to be operating at more than 95%, 90%. So that is not an issue. But Kochi has always been a concern because of this pipeline issue. But now since the Kochi-Bangalore pipeline has been commissioned, so we hope that the utilization level will be in the range of 25% to 30% in this financial year, maybe by end of it.
So you're saying 25%, 30% by the end of the year, is it?
Right now, it is 22%. Right now, 22%, it is already there.
Lastly, just what are the return...
Sorry to interrupt Mr. Ginde. Sir, I would request you to come closer to the phone and speak.
Yes. So my question was, what is the likely expected return on this LNG systems business and the biogas which you are talking about? Would it be comparable to the current business, especially Dahej or not [indiscernible]? And don't you expect that if you want to take away such -- make such big impact on the dealer market even though NPEs might come into the same thing and their balance sheets are much stronger than [indiscernible] they may not be there -- they may have a lot of debt, but they have very strong balance sheets. So they can be easily compete with you.
No, competition is always there. I'm not saying it is not there. But what I feel that this is a business, which will give handsome return. Because if you look at the pricing, it is LNG price at 30% to 40% less than diesel. So price-wise, it will give a good return. Absolutely, no doubt. And as far as the competition is concerned, of course, it will be there. But then we have to do it. Otherwise, how can we survive? This is our forte. We have more 2 terminals and 1 more coming up. So we should, in fact, go in this direction because this is something which can perhaps give us more profitability in time to come. So we hope that this is a good segment. Biogas is basically, it is guaranteed by government that they will buy these OMCs and this CGD companies, they are buying it at INR 46 per kg. So this is a rate which is good enough, I think. And perhaps if that is bought at this rate, which means it will be -- it's translated in terms of per mmBtu, it will be almost $11, $12 per mmBtu. So price is good even for the CBG. So we hope that it will be a sustainable business. And the price has already been insured by government and perhaps all OMCs and CGD entities who are there in business, they have issued letter of intent in this regard. In fact, we have got almost 18 letters of intent from GAIL, HPCL and CGD companies. And perhaps that is the one thing which we can say that price is good, INR 46 per kg.
So what is the time line on the project?
Time line of the project, basically, this is something -- it will take some time because something which is coming up first time in India, and we are putting up some stations right now in Haryana, 4 stations we are intending to put up. So once we see what is there, the progress is there, then we will see other states where we can set up these. Because in this case, one of the major requirement will be the feedstock is there or not for these plants. The feedstock is a major concern. So we have to select the places, where feedstock availability is there and if government can ensure that availability will be there throughout the year. So that is something which is a challenging issue. Perhaps if that is there in some place, then we can think that it's a good thing. Because ultimately, if it materializes, it will help in augmenting the domestic gas in India.
The next question is from the line of Aditya Suresh from Macquarie.
I just have one question actually. So in the past, we've already spoken about a bunch of projects in Bangladesh, Sri Lanka, et cetera. But we never really proceeded with some of these announcements. So I guess in that context, the specific question I want to ask was, INR 8,000 crores of CapEx for LNG trucking, you've mentioned in the first few years, you'll kind of go slow, et cetera, right? So if for example, you found out that economics are less kind of conducive than what you'd envisaged, is this a committed INR 8,000 crores of CapEx? Or is there an element of if the economics are not favorable then you kind of scale back these plants meaningfully? So can you just throw some light on that in terms of how much of this CapEx is actually committed versus how much of this is going to be depending on returns on some of these projects?
See, it's like this, that we have planned for this. And whenever we will have these projects, it will be like some of the projects we have started already. Like as you must be knowing that the 3 tanks that has to come up, we have already started the standard process. So jetty also, we have received a DFR for that. So there is a process which has to be implemented, and then only the project can be materialized. So what I'm saying that something has been already committed. Like jetty is committed. Two tanks and Dahej is committed. Dahej expansion from 17.5 to 20 MMTPA committed. Again, second phase expansion of 22.5 MMTPA is committed. So these are expenditures which will happen. There's no doubt. But as you see this LNG station part, 1,000 station, as I said, but then, we have to see where we can put up. Those things have to be rolled out. Some issues have to be threshed out. Land availability is there and where it is more feasible to have. This is our thought process that we will see. And perhaps whatever number we have said, maybe not exactly same it will come. But definitely, around that, we are planning to have.
So if I'm going to kind of think -- if I'm going to think about this as an aspirational CapEx or a targeted CapEx compared to a committed CapEx, at least for LNG highway...
Once you will not have aspiration, then perhaps you cannot succeed. We have to aspire something, then only we can go ahead in that direction. But of course, I've told you that CBG project, as I said, 100 CBG projects we want to do. But at the same time, we have to see whether [indiscernible] availability is there somewhere or not. Those kind of logistics have to be there, then only we can go ahead with that project. If logistics already paid at any place, there's no use of going with the project. So those things, I cannot commit right now. That 100 will come, where it will come. So this is, again, we have to work it out and then come to the Board for approval. So it's all the [indiscernible] project that, that should come. But visibility will be worked out based on the return on investment. And of course, whenever we are bringing anything on floor, then it should have some return, then only we go for that.
The next question is from the line of Amit Shah from BNP Paribas.
Just following up on Aditya's question. Is there a way -- you said jetty is committed, Dahej expansion is committed and so is the tank project, right, what would be the total CapEx of all these 3? And how much has already been spent?
Total 3, if you look at INR 3,000 crore tanks in jetty, then Dahej expansion is around INR 1,100 crore. So it will be 4,100 crore. And the third one is around Gopalpur terminal INR 1,500 crore, which...
Which one, sorry?
There is an East Coast terminal I have talked about. So it is there, INR 1,500 crore and 1 tank at Kochi, INR 700 crore. So these are expenditures which will come up. So it will be more than INR 5,000 crores.
And how much of -- and over what period of time, over the next 3 years. Is that a fair assumption?
Like Gopalpur, likely to be -- this East Coast terminal is likely to be completed by 2025. And then these tanks are likely to be completed by 2024, jetty by 2025. So like that time lines are different.
So is it fair to say that over the next...
Over the next 5 years, you can say.
So would it be fair to say that over the next 5 years, if you do end up doing the entire LNG stations as envisaged today, you would be spending something around INR 12,000 crores, give or take?
It's LNG stations you are talking about?
Yes, everything included, like these 3 projects that you mentioned and...
No, LNG station, I have said that is separate apart from this.
No, no, I know. That's why I'm saying. If I add the INR 4,000 crores or the total that you just gave, plus the INR 8,000 crores, which is envisaged, right, that would be that in the next 5 years odd, you would be spending around INR 12,000 crores if the LNG goes through as you...
Sure. Sure. Sure.
That's correct, right?
That's correct.
Okay. Okay. And then just one very housekeeping question. I think I might have missed it. Were there any one-offs in this quarter? And why was the other expenses higher on a Q-on-Q basis?
Debabrata, kindly explain.
Hello?
Debabrata, are you there?
Yes. Yes, sir. So INR 56 crore was for CSR that was booked in the last quarter, the provision for commitment for this year. And also, there is an INR 18 crore Ind AS loss, this Ind AS 116 loss. So that makes the higher number in the other expenditure.
Okay. And there was no other one-off in the quarter, right, related to inventory or anything?
Inventory, actually gain was INR 60 crores last time. But this is -- this time, it is negligible at INR 4 crores.
Ladies and gentlemen, this was the last question for today. I would now like to hand the conference over to Mr. Varatharajan Sivasankaran for closing comments.
Thanks, Mallika. I want to thank the Petronet management and all the participants, a very productive session. Have a nice day. Thank you.
Thank you. Thank you very much.
Thank you. On behalf of Antique Stockbroking, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.