Petronet LNG Limited (NSE: PETRONET) Q2 2025 Earnings Call dated Oct. 24, 2024
Corporate Participants:
Kishan Gopal Mundhra
Vinod Mishra — Director of Finance
Vivek Mittal — CGM & Vice President Marketing
Analysts:
Probal Sen — Analyst
Yogesh Patil — Analyst
Hemang Khanna — Analyst
Maulik Patel — Analyst
Kirtan Mehta — Analyst
S. Ramesh — Analyst
Sabri Hazarika — Analyst
Vishnu Kumar — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Petronet LNG Q2 FY ’25 Earnings Conference Call hosted by DAM Capital Advisors Limited. [Operator Instructions] I now hand the conference over to Mr. Kishan Gopal Mundhra from DAM Capital — DAM Capital Advisors Limited. Thank you, and over to you, sir.
Kishan Gopal Mundhra
Hi. Thank you, Ridhi, and good evening to everyone. On behalf of DAM Capital, I welcome all of you to Petronet LNG’s second quarter FY ’25 earnings call. At the outset, I would first like to congratulate the management on the good set of results and to discuss the same we have with us the Director of Finance, Mr. Vinod Mishra; Mr. Rakesh Chawla, who is the Group General Manager and President, Finance and Accounts; Mr. Gyanendra Sharma, who is Group General Manager and President, Marketing; Mr. Vivek Mittal, Chief General Manager and Vice President, Marketing; Mr. Debabrata Satpathy, who is General Manager, Finance and Account; and Mr. Vikash Maheswari, who is Deputy General Manager, Finance and Accounts.
With that, I would now like to hand over the call to the management for their opening remarks and then we will follow it up with a question-and-answer. Over to you, sir.
Vinod Mishra — Director of Finance
Okay. Thank you very much. Good evening to all of you. First of all, I would like to point out that Dahej throughput has been 210 TBTU, as against 225 TBTU as against 210 TBTUs in the corresponding quarter and 248 TBTU in the previous quarter. If you look at the performance of the company this time, it has been better in first half also, which is better than the corresponding quarter. And the overall throughput, if you see of Dahej and Kochi together, it’s 239 TBTU as against 223 TBTU in the corresponding — TBTU in the previous quarter. And if you look at the half yearly performance, it has been 473 TBTU as against 428 TBTU in the last half year attachment period and overall throughput in six months has been 501 TBTU as against 453 TBTU in the first half of last year. So this is the physical performance.
As far as the financial performance is concerned, the quarter the PBT has been INR1,140 crores as against a PBT of INR1,102 crores in the corresponding quarters and PBT of INR1,520 crores in the previous quarter. And the PAT has been INR848 crores in the current quarter as compared to INR818 crores in the corresponding quarter and INR1,142 crore in the previous quarter. So this is the quarterly result, which has been there. And if you look at the half yearly performance, it is INR2,660 crores in the first half of current year as compared to INR2,164 crore in the H1 of last year. And PAT has been INR989 crore in this current quarter as compared to INR68 crore in the corresponding half year of the last previous year. So this is the financial performance and the growth of profit from H1 of this year as compared to previous year H1, it is 23% growth is there in PBT and 22% growth in PAT.
And as far as the quarterly performance as compared to the corresponding quarter is concerned, it is around PAT is higher, right, 4% and PBT is by 3%. So this is our physical performance. And if you look at the utilization of Dahej terminal, it is at the level of 98%. And Kochi terminal is at the rate of 22% and 98% is of course less than last quarter, which is around 109% and it is more than corresponding quarter, which was around 96%, 92% rather in the corresponding quarter. So it is better this time as compared to the corresponding quarter. So this is how it is there and if you look at the dividend payout, we have declared INR7 per share as dividend — interim dividend to the shareholders and which is the same as it was in the last year. So I think this is all from my side and now house is open for the questions.
Questions and Answers:
Operator
Thank you very much. [Operator Instructions] The first question is from the line of Probal Sen from ICICI Securities. Please go ahead.
Probal Sen
Thank you for the opportunity, sir. I hope I’m audible.
Vinod Mishra
Yes, yes, you are audible, Probal.
Probal Sen
Sir, two questions from my side. One is, sir, of course, the Q-o-Q decline was perhaps to be expected given the reduction in power demand, what we have seen in overall consumption. But just looking ahead for the second half, what sort of utilization should we be sort of factoring in given and what sort of spot LNG pricing environment are we actually looking at this point of time?
Vinod Mishra
Of course, I am optimistic about it. And the second half, I expect it will be good also because the demand is growing because prices are moderate at present. And it is likely to remain moderate, but I can’t predict for the winter season, it may be slightly higher, but if winter is not that harsh, certainly the prices will also be lower. And if crude also remains at this level, which is now $75 — $74, then long-term prices will be even down. So I think at present, if you look at the spot LNG prices, they are almost neck-to-neck with the long-term prices and there is not much difference in the prices of long-term and spot LNG.
So we hope that prices will remain moderate in future, and we hope that it will be even lower than what is now. And hopefully, and I am sure that consumption will not be reduced, it will remain at the higher-level because you know that Indian market is price-sensitive and if prices are moderate, then consumption doesn’t come down. And we are hopeful that consumption will increase in the second half also. And accordingly, we are getting sentiment that it should be almost in the same range. We are expecting that it should be in the range of 95% to 100% capacity utilization of Dahej. So they should continue. We don’t see — we don’t foresee any challenge.
Probal Sen
Understood, sir. The other question was more about sort of the capital deployment. If you can just give us a bit of an update on what is the effective, you know, capacity that we expect Dahej to be at by the end of this financial year? What is the update on the last-mile connectivity of the Kochi-Bangalore, the second offtake pipeline. And thirdly, the status of the petrochemical project in terms of CapEx and investment, if I can have some color on that.
Vinod Mishra
Okay. So first is the CapEx you are asking and as I — I think we have already declared on the website and also on the stock exchanges that we have commissioned two tanks in Dahej on 1st of October. So that means that we are getting more flexibility to operate now. And we can now throw more cargoes, that means it will be definitely adding to our bottom-line. So this is a great thing to happen because we are now able to have more cargo and this will give us flexibility to process more gas. So this is one good news for the shareholders that we have capitalized these two tanks and started storing LNG in these two additions. Now total number of tanks has gone up to 8 from 6. So this is one CapEx, which has been there, which has been completed. Now another project, which is going on in Dahej is our real mitigation of this project, this expansion of our capacity by 5 MTPA, and which is likely to be completed by March 2025 as per the scheduled completion time.
So if this happens, this will give us the flexibility and also will enhance the revenue of the company. And accordingly, it will add to the bottom-line, but it will be in the next financial year, not this because it’s still going on by March, it will be complete. It is a low-hanging fruit if you look at, because it’s a CapEx of all INR570 crores, which is only 10% of the greenfield tunnel if at all it is today. So even if we are putting up this CapEx of INR570 crores, maybe in a year or two, we will recover it. So payback period is very short. So it’s a low hanging fruit and then capacity will be there 22.5 MMTPA. And we are making all efforts to book the capacity as off takers and anyone as off takers are not taking full capacity, so that effort is going on. So this is one of the agenda we have. And other CapEx part, if you look at Kochi pipeline that is also being awarded — has been awarded. So it is going on. Now that our jetty will take three years’ time to complete the offsite facilities and facilities, both the contracts have been awarded. So now it’s a period of three years by which it will be completed. And it will be able to handle both — all three kind of liquid hydrocarbons propane, ethane, and LNG. So it’s a unique jetty in the country, which nobody has. So we are hopeful that this will be complete by 2027. This is one part at Dahej.
And then you are talking about Kochi. Kochi, basically pipeline connectivity was an issue. And as I have reiterated in our earlier conferences also that it is likely to be completed by March or maybe April next year, as has been communicated by GAIL India Limited, because that is the company which is laying the pipeline from that — for that section. And as I said earlier also that Coimbatore to Krishnagiri section is going on. And half of that is around 250 kilometers, half of that has been already completed, but I think 120-125 kilometers is still remaining. So hopefully, that will be completed by year end. So after that it will be connected to the natural gas. So that is a major thing, which is going to happen because after that it can utilize the gas to any place and gas can be fed for any other area and if somebody wants gas at Punjab or Haryana, they can be supplied from Kochi, because physical movement of the good — physical movement of gas is not required if pipeline — if pipeline connectivity is there and it is connected with a gas grid. So this is how it happens. So this will automatically increase the consumption level of Kochi and more-and-more city gas distribution projects are going to be completed in next two, three years, or four years maximum. So there also the demand will be increasing because domestic gas is allocated to city gas distribution companies, and it can be swapped with RLNG, and it can be supplied from Kochi, because again there is a benefit of unified tariff of pipeline.
So, Zone 1 tariff is there, then certainly anybody would — in southern Indian cities, anybody would like to have gas of Kochi terminals, because that will be within the range of 300 kilometers, so Zone 1 tariff will be charged. So swapping will happen once this Kochi terminal will be connected to the natural gas. So this we are expecting, and this will automatically raise the consumption or utilization level of Kochi terminal. This is my — your second question answer.
Third question is regarding petrochemical project and that I just want to update that we have already awarded contract for PMC and license for contract has already been awarded. And now since PMC contracts have been awarded, so PMC is taking all the activities to make packages for different, different and packages will be then awarded in separately and perhaps it is — it has already started in fact, making the current year. And then, everything will be started, and the contract will be awarded to the vendors and this will be — I think this year it will be taking place. But CapEx on this will be not too high this year, but maybe next year it will be high. This year only this processing will continue because awarding the contract also sometimes takes more time. So that is there and progress I have told you. And as you know that we are also lining up our lenders for this project, as we have already that the debt-equity ratio will be 70-30 and accordingly we will be lining up with bankers, lenders and we have started the process and probably in next 2-3 months it will be lined-up and thereafter we will be ready for making the payment and utilizing the loans of the bankers and also putting to equity of around 30% from our size.
So this is how progress is there in pet-chem project.
Probal Sen
All right, sir, thank you so much for that extremely detailed and useful explanation. Appreciate it. Thank you, sir. That’s all.
Operator
Thank you very much. The next question is from the line of Yogesh Patil from Dolat Capital. Please go ahead.
Yogesh Patil
Thanks for taking my question, sir. Two quick questions. Sir, recently, the GAIL is seeking a long-term import deals of closer to 5.5 MMTPA and GAIL has also closed some LNG supply contracts of 1.5 MMPTA. So is this — in this case, can we connect the dot that our Dahej expansion would be ready by March 2025? And so, is there any chance that the GAIL will book some capacity or any talks going on this side? This is my first question.
Vinod Mishra
Yeah. Agreed. And as you know that capacity will be available by March ’25 and we are already in talks with our officers, but if something concrete will be there, we will let you know. But at the same time, I can say that whatever new contracts are being signed by GAIL, IOCL, all have signed it. Definitely much more-and-more volume will come to Dahej. This is quite sure because the Dahej connectivity with the demand center is so good that anybody, whosoever is bringing volume to India cannot ignore Dahej, because it has a capacity of around 35 million tons of evacuation, and it is connected by five pipelines. So no other terminal has got this kind of unique advantage. So I am hopeful whatever volumes are coming, its maximum volume will come to Dahej terminal also. And at the same time, we are also seeking our opticals to book capacity under this expansion. And hopefully, we’ll succeed. And if that happens, then to some extent it will be booked, maybe that 5 million ton may not be booked, but we want to see some capacity with our test also, because as you know, even 17.5 MMTPA is sometimes falling short. And you know last quarter we had to run almost 20 MMTPA of capacity. We have run to that extent.
So what I am saying is that whatever capacity we create, it doesn’t mean if entire capacity is not booked, it will not be utilized. When we were only 17.5 million tons. And at that even — at this point of time also, the booking is only 15.75 MMTPA, if we have to utilize the entire 17.5 MMTPA. So it’s not that unless until some long-term capacity is then only utilization will be ensured. So the spot and short-term gas is also there in the country coming, because prices are moderate, so we will be able to utilize that 5 million tons, so it is going to enhance our bottom-line.
So let’s be assured that we will try to book at least some capacity with off takers or any other consumers or any other LNG traders or supplier. But at the same time, we have the capability to utilize this capacity with other volumes coming in like short-term cost, that is also there. So hopefully this — we will be utilizing next year this 5 MMTPA addition. So this will automatically add to our bottom-line and profitability will increase next year.
Yogesh Patil
So sir, second question is related to the Dahej Regas tariff. Every year we increase the tariff by 5% and as per the agreement with the promoters, who are the — who are the mostly the off takers at Dahej? How long we can continue to increase the tariffs every year by 5%? That’s one thing. Is there any clause which can pause or it can change the tariff increase in long-run? That’s the second. And sir, we also wanted to understand the formula, if any, to calculate the Dahej terminal regas tariff. Is it based on some percentage of return-on-equity or the return capital of Dahej assets?
Vinod Mishra
Okay. So first question is that how long we will continue to increase 5%. This is as per contract. See, it’s not there that they have a choice because it has been agreed to and it’s not in Dahej only. If you go any other terminal also, you go Dhamra, you go other terminals, they are also charging 5% every year. So it’s not a question that how long they will afford. This is a contractual obligation, and contract is there for the capacity booking till 2026. So till 2036, it will continue. So it’s not a question of any clause, which is there, which can — yes, they can be negotiated. It’s not there. As per contract, we are charging. This is the answer to first question and there is no — as we can question also that there is no clause as such. Only thing we can review every three years that how much inflation is there. So it is only upward revision, which is happening. It is never the downward revision, which is going to happen. So this is my understanding of the contracts, and we are going ahead for the contract. So this is how it is there.
And the third question is regarding —
Yogesh Patil
So the third question was regarding — wanted to understand the formula, if any to calculate the Dahej similar —
Vinod Mishra
So that cannot be discussed. This is something, which we have to — because these things are contractual and confidential things. We cannot give you the formula how we calculate it. But it is a market-driven and if you compare with any other terminal, it is the lowest tariff which they are charging.
Yogesh Patil
Sir, as you just mentioned that every three years tariffs can be reviewed. If there is any adjustment regarding to inflation. So any shortfall to the inflation, suppose the inflation is not growing at 5% every year–
Vinod Mishra
It has not happened so far.
Yogesh Patil
Okay. And sir, last one, considering the last 10 months regas volumes at a Dahej terminal, do you expect any shortfall from the off-takers for the current calendar year?
Vinod Mishra
I don’t think — we don’t expect these things to happen. These are contractual obligations. This is something that prices are moderate, so they will fulfill the obligations. We are quite hopeful.
Yogesh Patil
Okay. And sir, lastly, what was the CapEx during the first-half FY ’25 and the planned CapEx numbers if you could share for the FY ’25 and ’26?
Vinod Mishra
CapEx I have told you that it’s going on, but it is can be given, but I don’t want to — I think we are going well on CapEx side and projects, as this will be coming up, but certainly we have handsome CapEx going to happen in this year and we will let you know later how much is that. I can give you the CapEx, on which item we are going to incur, but financial year wise, you say then it becomes difficult because it is still six months remaining for this financial year. Let it happen and we will tell you.
Yogesh Patil
Thanks a lot sir, and wish you Happy Deepawali to Petronet LNG Management.
Vinod Mishra
Thank you so much. Thank you. Same to you.
Operator
Thank you very much. The next question is from the line of Hemang Khanna from Nomura. Please go ahead.
Hemang Khanna
Hi, sir. Thank you for taking my questions. I have a few of them. Sir, firstly, margins for this quarter were a tad weak. Could you help us with some details on what led to this and what was the hit, if any on the inventory and trading side? Sir, secondly, on Dahej —
Vinod Mishra
We have already declared that utilization is lower than the previous quarter, because last quarter there has been power demand and that was also significant.
Hemang Khanna
Sir, utilization side is well understood.
Vinod Mishra
It’s a normal release operation because we are operating — so I don’t see any — and volume-wise it is lower and margin you know that tariff is already fixed, so it is as per that coming and as far as the trading is concerned, trading margin has — and there has been inventory gain of around INR70 crores this quarter as against INR261 crore in the previous quarter.
Hemang Khanna
So inventory was INR70 crore. And what was it on the trading side? Sorry, I lost the line.
Vinod Mishra
Trading side, I told you, INR39 crores this quarter.
Hemang Khanna
INR39 crores. Got it. And sir, secondly, if you could help us understand on the Dahej side, how are utilization currently panning out for the month of October? Definitely, you’ve indicated 95%, 100% for second half. But how is October currently trending?
Vinod Mishra
This information — 98% is going, so there should be–
Hemang Khanna
98% that’s very reassuring, sir.
Vinod Mishra
So it will not be — it will be in this range only. But exact data October, we cannot give, sensitive information. So we cannot declare on this phone call.
Hemang Khanna
Got it, sir.
Vinod Mishra
It will reflect in the result, but we will make an effort. It will be continuing in the same fashion, which is happening in this quarter — second quarter in the range of 98%.
Hemang Khanna
Got it, sir. That’s very reassuring. Thanks. And sir, lastly, on the tariff negotiation side, can you just share with us when is the tariff negotiation expected to be concluded, a rough timeline on that? And what are typical hindrances, if any?
Vinod Mishra
You’re talking about?
Hemang Khanna
So on the new volumes that we signed.
Vinod Mishra
New volume, it’s going on, it’s already we had — and these things cannot be disclosed because these are all confidential. This will happen. There is no challenge as such. We will be doing it, and it will be in a manner that will be good for the shareholders. And I don’t foresee any kind of is lower tariff from their side. It will be good tariff, and we will let you whenever we sign the contract. But already this all things are going on, which cannot be discussed on this call.
Hemang Khanna
Got it, sir. Got it. Thanks a lot. Thanks for the detailed answers and thanks and wishing everyone a very Happy Diwali.
Vinod Mishra
Thank you. Same to you.
Operator
Thank you very much. The next question is from the line of Maulik Patel from Equirus. Please go ahead.
Maulik Patel
Yeah. Thanks for the opportunity, sir. Sir, just two questions. Can you just give some update on your PetChem expansion? I mean, work has started or the appointment of the consultant and so any update on this will be really helpful.
Vinod Mishra
Just I mentioned PetChem we have awarded the work for PMC. That is one thing. Second, contract we have awarded contract for licensors also. So both PDH and PC contracts have been awarded. So these are in-place and now PMC has been awarded. So now PMC is now undertaking all the activities first, the various packages and then it will award the work to the contractors and then the work will start in Dahej. So this is how it is going on. So major thing of award of PMC contractors, which has taken place and now everything will start, slowly the packages will come and because this is PetChem project, so multiple packages are there, and the contracts will be huge. So it takes time to award job, it’s not one contract. It’s many, many contracts will be there for different, different, utilities will be different and other units will be different. So likewise, it will be there, but it has started. So we hope that this year many contracts will be awarded, but capex may take some time because if work will start in the second half of the year, so I think the payments will not be too high, but next year the CapEx will be high. And before that, we have been already engaging with our lenders and probably in three-four months’ period, we’ll be able to — we’ll be able to line-up the lenders for taking debt. As I said earlier, the debt ratio — debt-equity ratio is 70-30. So accordingly, we are going ahead.
Maulik Patel
Got it. Sir, just more question. So you have — in earlier question, you spoke at length about the renegotiation of the RasGas volume and the contract, which you want to with an off-taker, right. So is it fair to assume that before 2027, you can — and what kind of timeline you are looking to complete negotiation with off-takers for this new contract of RasGas, because you have signed a contract within a — with a Qatar, but you have to do within off-takers. So when that is likely to get complete?
Vinod Mishra
It will be completed very shortly. It’s going on, any time it can be completed. But only thing is still there is three years, four years period left for implementation of this contract. So don’t worry about that. It will be done before that, but only one thing I can assure you that they have already undertaken to take the quantities in this contract. This guarantee they have taken. So it is going to happen, but this period is long. So we are taking time, but it will be happening shortly. Maybe in six months’ time, it may happen like that. So there is no issue as such. So because there is no urgency of that contract, so this — it may be taking stage, but since time is still left, 3.5 year — more than 3.5 years, so I don’t foresee any challenge. As I said that this volume is guaranteed by off-takers, they will offtake this volume. That means our revenues are guaranteed, right. And it will be a reasonable revenue, it will be good revenue and perhaps shareholders will always — have always appreciated us in terms of this kind of contract and in future also it will be like that. So I assure all the shareholders that this deal will be good and there is no reason to obtain anything that what is going on is because it’s a long-time is left, so it is taking time.
Maulik Patel
No, I think that is that is what investors are worried about and let me tell you, and we all know that the off-takers — the off-takers will agree with the volume. So volume, obviously and the price at which the volume is going to get — come from the Qatar to you, it has also been in consideration within off-takers. What worries investors and others is it regas tariff and we are not concerned about revenue, revenue obviously we’ll get it. We’re concerned about the gross profit.
Vinod Mishra
I can assure you.
Maulik Patel
Generally, there should be no decline — no decline in the tariff, which you are charging?
Vinod Mishra
Pardon.
Maulik Patel
Will there be any decline in the regas tariff, which you are charging to the customers, let’s say, if this today INR62 per —
Vinod Mishra
— because nothing has materialized, so I cannot say, but certainly when it is finalized, then we’ll come back to you and discuss this matter.
Maulik Patel
Sir, just one more question and related to this expansion of Dahej, are you in a discussion or are you looking to find more volume to be placed on a long-term regas capacity, which you have done in the past? And currently you have around 8 million ton of regas–
Vinod Mishra
All efforts — making all efforts to have the capacity book in our because new volumes are coming up. And if you look at the total long-term contract, which India has today and where from supplies are coming is 20 million tons — 20.2 million tons. But by the time 2027, you will find that is around 28 million tons, so definitely volume will be coming to Dahej maximum volume. What I am saying and 1.2 million will be starting from around 2026-2027, so what I’m saying that future is very optimistic because gas utilization is bound to increase. And as the Government of India focusing also to increase the share of taxes to 15%. That’s why there is a huge potential for growth of LNG business and if you look at different segments also, there in transportation sector, it is also coming up in a big way. So this alone has the potential of consuming almost to 10 million tons to 12 million tons if it comes in the way and really the China has already implemented its ecosystem.
So I think in India, there is huge potential for LNG consumption and even existing sectors and more new sectors will come up, CGD entities will come up. So I hope that our LNG consumption will further increase because domestic gas availability is a hindrance. It cannot be increased substantially. So there is a limitation of domestic gas and consumption is growing. So growth is only likely in LNG sector. So this is what is a good news for the persons like us or companies like us, because we have hoped that in future, because prices will not be high in future, reason being that more-and-more capacities are coming in 2023 onwards. So almost 150 million tons to 200 million tons of liquefaction plants are coming up across the globe. So the supplies are likely to be more than demand. So definitely, the prices will not be too high and if prices are not high, then LNG consumption in India is bound to increase. So this is an optimistic view.
Maulik Patel
Sir, just one bookkeeping, what was the regas revenue you charged in this quarter?
Vinod Mishra
Pardon?
Maulik Patel
For the regasified revenue, which you charge this regas volume service contract — how much was this quarter?
Vinod Mishra
INR1,508 crores total, trading and regas volume.
Maulik Patel
No, no I’m talking about regas — regasification service revenue, sir.
Vinod Mishra
Service is INR731 crore.
Maulik Patel
31 crore?
Vinod Mishra
INR731 crore.
Maulik Patel
Okay, got it, sir. Thank you very much. Thank you and wish you all good luck.
Operator
Thank you very much. The next question is from the line of Kirtan Mehta from BOB Capital Markets. Please go ahead.
Kirtan Mehta
Thank you, sir for the opportunity. We have mentioned that we have reversed the charge — previously booked revenue of INR71 crore. So if the customer has brought the corresponding cargoes from the 2023 backlog, would you be able to tell us the volumes, which it correspond to?
Vinod Mishra
Pardon, I could not understand your question.
Kirtan Mehta
We have mentioned in the notes that we have reversed the INR71 crore of the previously booked revenue —
Vinod Mishra
Yeah, yeah, INR71 crores we have done the reversal. Yes.
Kirtan Mehta
So what would be the quantum of the volume that customer has brought against this? Would you be able to give us in TBTU terms as well?
Vinod Mishra
Quantum you can just imagine it will be around — around we can give you the estimated amount, the exact amount we will work-out, but estimated amount will be around 11 to 12 TBTU will be the volume.
Kirtan Mehta
Right. And in terms of the September quarter, is the December quarter is the last quarter when buyers can bring in their cargoes for the 2023 backlog, do we have indication from any of the —
Vinod Mishra
2021 backlog.
Kirtan Mehta
2021 backlog. Yeah. Do we have indications from customers what volumes they are planning to bring during the next quarter or are there customers who have completed their contracted quota and have a flexibility to bring —
Vinod Mishra
I’m not going to tell you right now. We’ll discuss with you after this December.
Kirtan Mehta
Sure, sir. And in terms of the Kochi volume, are we seeing any uptick in the volume because of basically the start of consumption of the MRPL, is that sustainable?
Vinod Mishra
See, I have told you that Kochi terminal utilization will enhance after this pipeline is connected to natural gas rate. But at present, it is operating almost at the same level, around 22% capacity.
Kirtan Mehta
Fine, sir. Thank you.
Operator
Thank you very much. The next question is from the line of S. Ramesh from Nirmal Bang Equities. Please go ahead.
S. Ramesh
Thank you and good evening and wish you all a very Happy Diwali. So in terms of the balance sheet, if you look at the provisions and receivables and the net provision. So as of September, you have made provisions worth INR599 crores, right? So to that extent —
Vinod Mishra
Till date. Till date.
S. Ramesh
Yeah. So what is the likelihood of this — how much of this do you think you’ll be able to write-back and when would that happen? And secondly, when you look at the receivables net of provisions, you know, when do you think you’ll be able to you know make progress in you know receiving these outstandings of INR17 crores, INR15 crores, which is the net receivable on paper.
Vinod Mishra
Yeah, I have told you that as also mentioned in our disclosures that we have entered into an arrangement with the officers, whereby whosoever have defaulted in 2021 and 2022. For those who have defaulted for the volume of 2021, they can bring volume till December 2024. And for those who have defaulted in 2022, they can bring their volume till December 2025. So let this period happen, thereafter, we will work it out, but also one thing I should say that we have taken the bank guarantees from these and it is ensured that the recovery is made either they make the payment, or we shall encash the bank guarantees.
S. Ramesh
Okay. So basically, this is just a bookkeeping entry. There is no, you know, need to worry about either the receivables not being actually received in cash or these provisions increasing further in terms of any write-offs. So that possibly is something you can–
Vinod Mishra
There is made just as a prudent accounting practice. It’s not that it has any impact on the recovery part. There is no need to make a provision also, because we have got the bank guarantee, there is an assurance that payment will come. So this is how we perceive it. And perhaps from that point-of-view, it doesn’t look like that it will not be recovered.
S. Ramesh
So just the next couple of questions. One is, if you look at the recent statement made by the Head of Total in the Singapore Conference. While he agrees that there is a lot of liquefaction capacity, he was causing that there could be some delays in some of the new LNG liquefaction projects expected in CY ’25. So if you have any thoughts on that, do you think that is something, which you are concerned about while the ’26, ’27 numbers look very favorable for importers like India? The next thought is on the recent government decision to allocate additional gas to ONGC petrol division farm, the plan to increase production from the nomination blocks. So to what extent would that additional gas being supplied from the nomination block to OPaL will reduce the potential sale of ethane you are planning to do with OPaL, if you can just address these two thoughts.
Vinod Mishra
So I think Vivek is there, he will answer your question, but I would like to point it out that it is not related to our area of work. In fact, whatever decision has been taken by the government of a domestic allocation to OPal is a government decision and whether they will take ethane from us or not, this is again we have to discuss with them. We are in discussion with them, but it has nothing to do with ethane imports which we are creating now. Those discussion will continue, but further my answer will be fortified by Mr. Vivek Mittal. Vivek?
Vivek Mittal
So I think two questions you asked. One is the Total statement that some of the liquefaction project take away. You may be aware at this point the capacity, which is being added across US, Mozambique and so slight delay of few projects will not make much of a difference as far as Total availability is concerned. In fact, the Petronet side of volumes from Qatar, so we are not expecting any delay in Qatar. US projects might get delayed, but Qatar is very clear, they are on-track.
Secondly, the ethane. So as you will be aware, firstly, our contract with ONGC is only for supply since April 2028 when our existing facility ends. So the government can allocate gas only if they extract from them. So post 2028, there is no commitment from Petronet side and of course, we are saying doing these people supplying the same by imposing directly at our, so those discussions are on.
S. Ramesh
No, no, the reason why I raised that is since you were banking on ONGC petrol division as one of the customers for ethane tolling business. So wouldn’t that to some extent reduce the potential need to buy from you? That was a broad thought I had.
Vivek Mittal
No, no, no. See, they are extracting ethane from rich LNG, which we are getting from Qatar and in view of that government has given domestic gas towards a swap quantity. It’s not that it is mainly being supplied by ONGC. It is only the extraction, which is taking place from rich LNG supplied from terminals, which is being imported by Petronet. So once that contract ends in April 2028, there is no commitment from Petronet side to ONGC and accordingly, they cannot expect, so the question of swap gas does not arise.
S. Ramesh
So you are saying that even if there is additional nomination of gas on the nomination block, but still expect to do some business with OPaL. Is that way to understand that?
Vivek Mittal
Yes, of course, OPaL we need it in, but still there will be no commitment to get rich LNG from post ’28. So we cannot guarantee supply of rich feed to ONGC. So consequently, the only option left is to import it.
S. Ramesh
Okay, fair enough. Thanks a lot and have a good day.
Operator
Thank you very much. The next question is from the line of Sabri Hazarika from Emkay Global. Please go ahead.
Sabri Hazarika
Yeah, good evening, sir. Just a small question regarding this Gorgon volumes the second phase. So that will be like 1.2 million at Kochi that is — that will start coming from 2026, ’27, right?
Vinod Mishra
Right.
Sabri Hazarika
And that will be — I think 0.6 will come in FY ’26 and that will ramp-up to 1.2 by FY ’27.
Vinod Mishra
Right, right, correct. Correct.
Sabri Hazarika
Okay. And this has been — I mean, I think you had adjusted the Kochi tariff I think few years back. So this was because of this adjustment only, right?
Vinod Mishra
This was done as a part of his settlement that they’ll bring the gas. We have renegotiated that Kochi tariff.
Sabri Hazarika
Okay, so in case the demand is not there in Kochi, then it can be bought in this current arrangement in Dahej itself and be charged Kochi type.
Vinod Mishra
Demand will be there, I’m telling you, it will be connected to the gas rate, as the demand will be there, we are always optimistic. We never talk negative. So it is there. I have told you it starting will be done, we will not do it. It will be done by IOCL, GAIL, because even they will have to supply the CGD entities, they can swap the gas from our terminal. So either way this will be utilized, whether we utilized or it is other off takes that will be utilizes because it will be falling in Zone 1 tariff for the southern India city.
Sabri Hazarika
And I mean there is no further downward adjustment in Kochi tariffs from these volumes, right or it could be?
Vinod Mishra
Right now, it is not a new tariff.
Sabri Hazarika
Okay, sir. And just more question regarding your CapEx, you didn’t tell us the number, but your cash-flow statement is showing around INR650 crore — INR660 crores for H1. So that is the broader number, right?
Vinod Mishra
That is, you can take it. Yes, that is okay.
Sabri Hazarika
Okay. Okay, sir. Thank you so much and all the best thank you.
Vinod Mishra
Thank you.
Operator
Thank you very much. The next question is from the line of Vishnu Kumar from Avendus Spark. Please go ahead.
Vishnu Kumar
Thanks for your time, sir. Many questions have been answered, but just wanted to understand sir, next year, what is your internal estimate of volumes that we can expect from the new terminal, new addition that regas that we are adding?
Vinod Mishra
Next year estimate is 22.5 MTPA from Dahej and 5 MMTPA from Kochi. So we have the capacity, we can utilize it but at least Dahej we are hopeful that we’ll be able to utilize maximum capacity because it takes time to utilize, but hopefully, we will be trying to utilize maximum possible of the expanded capacity. But it will be around 22.5, you can say more than 20 million tons.
Vishnu Kumar
So even irrespective, I mean, however we signed the contract spot medium-term, whatever we’ve been in, you’re still expecting that next year you can do 100% utilization there.
Vinod Mishra
Because the reason why I told you that we have capacity of 17.5 million tons and we are operating at almost last quarter, we have operated around 20 million tons, although we have a contract for 15.75 million tons for the gas capacity and other trading volumes. So you can see that we are able to utilize more than what we have on long-term basis, capacity booking. So it’s not a challenge because once the prices are moderate, then more earnings are coming in terms of spot and short-term energy cost. There is no challenge here. We hope that we will be able to utilize the entire capacity, which is being expanded.
Vishnu Kumar
Understood. Sir, in the Kochi, let’s say, the pipeline come through and if we hit closer to about 4.5 million, 5 million ton utilization, at the time will our average tariffs drop from where we are today?
Vinod Mishra
Average?
Vishnu Kumar
The realization that we are getting in Kochi, if our utilizations in Kochi improves post the pipeline, will our tariff at Kochi further go down.
Vinod Mishra
This we cannot discuss. Right now, Kochi tariff is big. There is no reason to revise it, and we are not thinking about that whatever be the capacity utilizations, it will continue like this only.
Vishnu Kumar
Got it sir. And one final question for me. We–
Vinod Mishra
Has not been considered so far, so I cannot future what will happen, nobody knows. But as of now, there is no discussion on this issue.
Vishnu Kumar
Because a couple of years ago, I remember, sir, we were discussing that because utilization was low, we had —
Vinod Mishra
Yeah. We had discussed. You’re right and we had also revised it downwards and thereafter it has gone up to level of 89.33 now.
Vishnu Kumar
Okay. The next question is, sir, we have seen some new contracts by Shell getting signed even at 11% on oil and also, we also understand, I mean, as you’re also highlighting a lot of new liquefaction terminals are coming. So we have signed at about 12% with the Qatar. So do you see a scenario a couple of years down the line, where we might get further contracts, new contracts getting signed at much lower than what we have signed with Qatar and how will that impact our current — as you said, our Qatar contract is getting — I mean, we are still in talks with our off-takers to sign it. Here, do you see a chance that this is a possibility and how do we mitigate in the contract itself that this kind of problem will not arise for us, where we don’t — we’re not able to place the volumes.
Vinod Mishra
Price part we cannot discuss, because it’s a confidential matter. But who’s over is signing the contract at whatever rate be, but we cannot discuss how much we have done and how much others are doing and other things are that who has signed 11%, I don’t know, know but whatever we have signed is a good contract and it’s a back-to-back and there is no reason for division in that contract in future also because it’s a fine price, it’s a good price and what others are doing, that is going to impact us. But we can assure you that there is no challenge to PLL as such. It has been already tied-up back-to-back. So we don’t foresee any reason to revision of prices in energy prices of Qatar.
Vishnu Kumar
Okay. Got it sir. And the receivables for short volumes for calendar year ’21 fee, understand was about INR420 crores just to — just for bookkeeping, how much was provided out of this INR420 crores, sir?
Vinod Mishra
You are talking about user-fee charges?
Vishnu Kumar
Yes, sir.
Vinod Mishra
It was around INR420 crores, whatever it may be, but now it has come down slightly because some of the capacities have been brought, so it has come down to almost INR393 crores — INR378 crores rather.
Vishnu Kumar
Sir, my question was whether we have already provided this in P&L fully or was there something that was spending — I mean, in fourth quarter trying to understand that whether we’ll have a positive or a negative impact on the P&L, that’s all — if the 70 become 100 or 150.
Vinod Mishra
What’s happening that whosoever will bring the volume in excess of the annual commitment, annual ADP, they will — that volume — to that extent volume, the user fee charges will be reversed because that part of volume has written into the sales repetitive. So there is no challenge in that. But only thing we will be able to do this only after fourth quarter, which is after December, who was able to bring it and who was not able to bring it. Then we will see what action to be taken. And as you know, we have the bank guarantees of all the off-takers. And this is an arrangement they have agreed, so we hope that it will be recovered. For ’21, it should be recovered by December 2024.
Vishnu Kumar
Sir, my question actually was this INR420 crores, which you just mentioned, it has already been provided fully in the P&L. That was the only question I asked. Any recovery is recovery sir.
Vinod Mishra
Provided, it would have been provided by this year end, but there is no need — because by that time, all those settlements will happen. It’s almost 75% we have provided.
Vishnu Kumar
75% of this.
Vinod Mishra
Yes. 75% we have provided, and balance is to be provided, but perhaps it will not be required because by that time settlement is to be done by December.
Vishnu Kumar
Understood, sir. Thank you.
Operator
Thank you very much. Ladies and gentlemen, that was the last question. I would now like to hand the conference over to the management for the closing comments. Thank you, and over to you.
Vinod Mishra
Thank you very much. I, first of all, wish all of you Happy Diwali. And as you know that we have been doing our best to perform in terms of physical performance of Dahej and Kochi and this endeavor will continue even in future. And as I told you, that company is doing very well and after new upcoming projects being in place, perhaps the bottom-line will further increase, and the level of company will be very high. So I thank all of you for reposing confidence and faith in our company. And we want to assure all the investors that we continue to endeavor to increase the bottom-line of the company and any decision taken will be on a commercial basis. It will not be any outside pressure or any influence. So this is how we are proceeding. Thank you very much.
Operator
[Operator Closing Remarks]