Petronet LNG Q1 net soars 58 percent; appoints new CEO

New Delhi, July 31 (IANS) Petronet LNG has reported a 58 percent jump in net profit at Rs.247.50 crore for the first quarter ended June mainly on the back of a tax reversal.

The company had posted a net profit of Rs.156.60 crore in the April-June quarter a year ago.

Petronet director (finance) R.K. Garg told reporters here late on Thursday that the net profit was higher because of a tax Rs.72.37 crore that was reversed after the company won its case for a tax holiday for port services.

Ports and power plants are eligible for a tax exemption during any 10 years of the first 15 years of operations.

Petronet decided to avail of the tax benefit for the port operations at the LNG import port at Dahej in Gujarat in the last 10 years.

“The Income Tax department had objected to it and we have now received a favourable ruling,” Garg said.

He also said the company imported over 30 percent less liquefied natural gas. It imported a total of 125.4 trillion British thermal units of LNG in the quarter in question as compared to 138 tBtus in the year-ago period and 93 tBtus in preceding quarter.

The 10 million tonnes Dahej LNG import terminal operated at 98 percent of capacity, while its 5 million tonnes Kochi terminal operated at just 6 percent because of lack of pipeline to take gas to customers.

“Despite a reduction in the offtake under the long term quantities by about 30 percent over the corresponding quarter last year, the total volume regasified at the Dahej Terminal during the first quarter of FY 2015-16 was 125.41 tBtus,” the company said in a statement here.

Garg said Petronet’s LNG customers state-run GAIL, Indian Oil and BPCL – lifted only 68 percent of volumes under a long – term 7.5 million tonnes a year import contract with RasGas of Qatar, because the landed price of the Oataris in India was about $12.5 per million British thermal unit as compared to the spot market price of under $8 mBtu.

Petronet has a 25-year deal with Qatar’s RasGas to buy 7.5 million tonnes of LNG annually, beginning 2004.

“Contract with Qatar is the best. For 11 years, the country has gained from the contract. It has helped develop LNG market in the country. Pricing under the contract has been advantageous for us,” Garg said.

“Sudden drop in (global) prices has developed the current situation,” he said.

“We are working together to mitigate concerns of high price of long-term LNG,” he added.

The company also announced late on Thursday the appointment of GAIL India director (marketing) Prabhat Singh as its new managing director and chief executive officer, after failing to come up with a suitable candidate four months ago.

Singh replaces A.K.Balyan whose 5-year tenure ended on July 15.

The selection had run into controversy after a search committee constituted for the purpose.

“The Board in its meeting held today (Thursday) has appointed Prabhat Singh as the new MD & CEO of the Company for a period of 5 years on the recommendation of the Search Committee and Nomination and Remuneration Committee,” the company said.

Petronet is joint venture owned by GAIL, ONGC, Indian Oil Corp and Bharat Petroleum, each holding 12.5 percent equity. Besides, GDF International holds 10 percent and Asian Development Bank 5.2 percent. The balance is held by the public.

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