Petronet LNG may finalise fresh import contract

New Delhi: Petronet LNG Ltd (PLL) board believed to have given its go-ahead for pursuing a contract to import 3.5 million tonne per annum (MTPA) of liquefied natural gas from a new source.

This is apart from the existing contract with RasGas of Qatar and the proposed contract from Australia’s Gorgon project.

The board which met here to consider the quarter ended June 30, 2008 results also gave its approval to PLL to move forward with the deal for sourcing LNG from Exxon Mobil’s interest in Australia’s Gorgon project.

Mr P. Dasgupta, CEO and Managing Director of PLL, said that “the board has allowed us to go ahead for sourcing 3.5 mtpa of LNG.”

Declining to disclose the name of the source as the deal is yet to be formalised, he said, “we are in advanced stage of negotiations. We hope to conclude it soon.”

As regards negotiations with Exxon for sourcing 3.75 mtpa of LNG (Exxon’s share from Gorgon project), he said “the board has given us indications on what is the price range one should bid for.”

He, however, did not disclose the price band as there were others also negotiating for the deal.

For the first quarter (ended June 30, 2008) of the current fiscal, Petronet has posted a two per cent dip in net profit at Rs 105.65 crore against Rs 108.03 crore for the quarter ended June 30, 2007.

This was mainly because the costs of repairs and maintenance have gone up and the legal fee has also become very expensive.

“For our various contracts the company has to engage international lawyers who are very expensive. For most of the contracts New York laws are followed,” he said.

PLL’s total income has increased to Rs 1,662.50 crore for the quarter ended June 30, 2008 from Rs 1,562.60 crore for the same quarter previous fiscal. The board has also decided to allow PLL to lease its excess capacity of Dahej terminal to other companies such as GSPC on tolling basis from December 2008.

PLL plans to increase its capacity to 10 million tonne expandable to 12.5 mt by December from its current capacity of 6.5 mt.

Its shares were marginally down on the NSE today at Rs 54.95.