Petronet LNG Limited (NSE: PETRONET) Q3 2025 Earnings Call dated Jan. 28, 2025
Corporate Participants:
Vinod Kumar Mishra — Director, Finance
Gyanendra Kumar Sharma — General Manager & President, Marketing
Rakesh Chawla — General Manager & President, Finance & Accounts
Analysts:
Puneet Gulati — Analyst
Amit Murarka — Analyst
Maulik Patel — Analyst
Shivam Sharma — Analyst
Pratyush Kamal — Analyst
Sabri Hazarika — Analyst
Mayank Maheshwari — Analyst
Ambar Taneja — Analyst
Somaya V — Analyst
Nirmal Gore — Analyst
Nitin Tiwari — Analyst
Presentation:
Operator
Good morning, everyone, and welcome to Petronet LNG’s Q3 FY ’25 Earnings Conference Call hosted by Macquarie. For the discussion today, we have with us the management team comprising Mr. Vinod Kumar Mishra, Director of Finance; Mr. Rakesh Chawla, Group General Manager and President, Finance and Accounts; Mr. Gyanendra Sharma, who is the 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 Accounts; and Mr. Vikash Maheshwari, who is Deputy General Manager, Finance and Accounts. So with that, I would now hand over the call to the management for their opening remarks and then we’ll follow it up with question-and-answer session. Over to you, sir.
Vinod Kumar Mishra — Director, Finance
Thank you. Very good morning to all of you. And as you know that we have been surprising you every time whenever we get the results, although our throughput has not been that high as it should have been. And if you look at the throughput in the hedge this time, it has been 213 TBtu as against 225 TBtu in the previous quarter and 218 TBTU in the corresponding quarter. The overall throughput has been 228 TBTU, including Dahej and this time and this is against 239 TBTU in the previous quarter and 232 TBTU in the corresponding quarter. And if you look at the Nine-Month result, it has been highest-ever and the overall throughput in Dahej has been 686 TBTU as against 646 TBTU in the previous nine months — previous years nine months and overall throughput has been 729 TBTU as against 685 TBTU in the corresponding nine months of the previous year. And if you look at the financial result this time, it has been INR1,169 crores as PBT this time as against INR1,140 crore of PBT during this last corresponding quarter and INR1,191 crore — sorry, INR1,597 crores in the corresponding quarter. And PAT has been INR867 crore in the current quarter as against INR848 crore in the ending quarter and INR1,191 crores in the previous quarter. Sorry, it has been INR867 crores in the current quarter as against previous quarter of INR848 crore and INR1,191 crores of the corresponding quarter. And if you look at overall nine months result, the PBT has been INR3,829 crore as against INR3,761 crore in the previous year’s nine months and PAT has in this time INR2,856 crores as against that of INR2,799 crores in the previous year nine months. So this is the financial result and as you know that it has been less — we have been able to get higher profit than the previous quarter, although it is very marginal. Thank you very much. And now house is open for the question.
Questions and Answers:
Operator
Thank you very much, sir. We will now begin the question-and-answer session. Request all participants to use the raise and feature to ask questions. And in order to ensure a wider participation, I would request everyone to please remit their question count to one. And you can always join back-in the queue for further questions if time permits. So we’ll now take the questions. We’ll take the first question from Puneet Gulati. Puneet request you to please go-ahead and ask your question. Puneet, you seem to be on-mute. Can you unmute and ask your question, please?
Puneet Gulati
Yes, can you hear me?
Operator
Yes.
Puneet Gulati
Okay, great. Yeah. So thank you so much. So I think my first question is on the volume side. So while your total volumes have still been decent, but what we are seeing is that the long-term volumes have been below 100 TBtu. It used to be higher than that both in FY ’23 ’24. So what’s driving this bit of slowness on the long-term side for the H? Any thoughts there?
Vinod Kumar Mishra
Okay. So if you look at the volume in the hedge, this Q3 has been lower as compared to — you’re saying that it’s compared to corresponding quarter, it’s lower.
Puneet Gulati
Yeah, I mean just as a trend also last 3/4 have been 96 to 97 TBtu. The previous year was 100 to 170 TBTUs and even FY ’23 was 100 plus.
Vinod Kumar Mishra
I think volume-wise, if you look at long-term, it’s a scheduling, we are doing as per ADP we are getting because long-term volume slightly maybe here and there, but normally it remains same because it’s a scheduled arrive one of the cargoes. Yeah, I don’t foresee any fall in that. But of course, the spot and other cargoes, which are coming in-service cargoes, yeah. They are affected by people this pricing — prices being higher or lower. So that may be there. But otherwise long-term cargo may be slightly lesser, but it doesn’t matter because it’s as per the annual delivery schedules. So cost different from the previous quarter, but of course from the corresponding quarter, it is less.
Puneet Gulati
Okay. Okay. Second question is on the UOP dues, any progress there? We noticed that there is another one for CY ’27 as well as INR117-odd crore. Any progress on what the offtakers are now willing to pay? You had a bank guarantee. Can you enforce that? Any further thoughts there?
Vinod Kumar Mishra
Yeah, that bank guarantee is there and in fact, we have already informed all the offtakers and team will reply by 31st March, okay, we will send the letters that we are going to invoke the bank guarantee. But at the same time, they have sought some time till 31st March because the bank guarantees are valid till 31st March, okay. It’s only period of five two months that we have to wait and thus, they will pay the use of the charges for ’21 at least.
Puneet Gulati
Understood. That’s very helpful. And lastly, if you can share the revenue for services part of the business.
Vinod Kumar Mishra
Services, I think INR680 crore.
Puneet Gulati
On how much?
Vinod Kumar Mishra
Yes,. INR680 crores.
Puneet Gulati
Okay. Okay, great. That’s all from my side. Thank you so much.
Operator
Thank you. We’ll take the next question from Amit Murarka. Amit, request you to unmute your line and please go-ahead.
Amit Murarka
Hi, good morning. So first question is on — on the Dahej, 5 million ton expansion. So it’s not just like I was just —
Operator
Amit, we can’t hear you properly.
Vinod Kumar Mishra
Amit, you are not audible. Amit.
Amit Murarka
Hello. Is it better? Is it better now?
Operator
It is better now.
Vinod Kumar Mishra
But before that, there is a clarification. There is a clarification. This regas revenue has been INR840 crores, not INR680 crores as I mentioned earlier. So just a small correction just made. I mean now you may now you can continue.
Amit Murarka
Yeah, yeah. So I was asking about Dahej terminal, you have — you’re just around the corner on the 5 million tonne expansion and the current capacity kind of at least in Q3 has not achieved 100%. So I was just thinking what’s the plan on the ramp-up of this 5 million ton and how much of this is under firm offtake agreements. Just could you provide some clarity on that?
Vinod Kumar Mishra
Yes, in fact, if you look at the capacity utilization, it has been 93% this time. But we hope this will — and will continue. But as far as the expansion is concerned, we are looking-forward to have booking on that also. And certainly, this time because you see in the first-quarter, we were not able to have the more cargoes because of the constraint in. So utilization will be there. Just wait for some time because this will be in-place maybe by June, I think it should be in-place. Before that we should be able to do some booking for the also. We are looking-forward for that and we are talking to the offtakers to book more capacity in our terminal. But it may not be 100% of 5 million tons, but it could be maybe, 40%, 50% or so that will be good enough but we will have more capacity to regas more spot volumes coming in the future because if you look at the future, the growth is already there, more than this are also coming, but at the same time, more long-term contracts have been signed. So I think it will tell us that more cargoes will come to our terminal in future and we are hoping for capsity booking also to the extent of 40%, 50%
Amit Murarka
Would you be able to at least give ballpark guidance or how we can think of a ramp-up on this 5 million ton like between, let’s say, year-one, year two FY ’26, FY ’27?
Vinod Kumar Mishra
Cannot be told exactly how much will be the ramp-up ready from the day-one. That it will be positive.
Amit Murarka
The ballpark is also okay, like are you thinking about 30% 40% for FY ’26 and maybe 60%, 70% for ’27
Vinod Kumar Mishra
By that it may happen.
Gyanendra Kumar Sharma
But it is also subject of what the international spot prices are. As you know, Indian market is very, very price-sensitive. So like last summer, we saw the prices softening, there was a lot of utilization, we were doing more than 10%, 910% of our capacity. So if we achieve those kind of prices, which is expected with the coming of new liquefaction plants in the — specifically in the latter half of this year. So if prices soften, then utilization level of course increase and because competitiveness of LNG increases vis-a-vis alternate fuels. So let’s hope that the prices soften, which will help us in utilization and increasing share of gas in the utilized energy basket also?
Amit Murarka
Got it. And on the pet-chem, again, are you providing any capex outlay now? I mean in terms of year-wise, I mean you were saying that even FY ’25 capex, you’re saying that you will come back maybe closer to year-end. So what’s the expectation on capex now for FY ’25 and ’26?
Vinod Kumar Mishra
Right now, we see this year it has been almost INR340 crores. We expect at least 15% 10% of the capex maybe to INR3,000 crore INR3,500 crores. This is the expectation for the next year, actually at ’25 ’26.
Amit Murarka
So sure. And just if I can ask one last question. You have also announced some contracting on the polymer capacity under the hedge terminal. So could you provide some more details on that? Like what kind of pricing is there? Is it like based on some last quarter average pricing? What are the pricing terms on that contract?
Vinod Kumar Mishra
We are talking about this is deeper is probably –. I think we cannot disclose because this is something which is between the two parties. But this is a price which will ensure us that we are always having some margin while selling the office. There is no chance that we would be using anything or just linked to international prices.
Gyanendra Kumar Sharma
Linked to international prices pricessing.
Vinod Kumar Mishra
We cannot give the formula exactly what is the formula for that, but of course, it will be at par with any international price. So it’s not a cost-plus contract, it’s linked to international prices then. It’s not not exactly the same as you are saying, but as I said, this is more dependent on Southeast Asia as price so like that.
Amit Murarka
Sure, I’ll come back-in the queue. Thank you.
Operator
Thank you. We’ll take the next question from Maulik Patel. Maulik, please go-ahead.
Maulik Patel
Yeah. Thanks for the opportunity. In last two years, and IOC and GSPC has signed a few of the long-term contract largely starting from 2026. I think one of the contract of Gale has also started in this month also. Are any of this volume is going to come to Dahej or Kuchi. Has any of this discussion happened with this with Gail IOC or GSPC on that?
Vinod Kumar Mishra
Yeah, of course, volume will come to us also because it’s not that whatever volume they have signed with other terminals, it’s not possible to utilize entire volume over there. So definitely our turnar will be utilized. As I earlier said that our capacity is going to expand by-5 million tons in next four, five months. So then it will be utilized for that purpose. Of course, as I said that more long-term contracts mean more volume to Dahej. So see, it’s not possible to utilize additional volumes in other looking at the kind of capsity or utilization level at other places because are — consumption is not that high along that terminder. So if you look at Dahej, there is huge potential for the consumption. So whatever volume is coming long-term after ’26, definitely it will come — majority should come to us. We know at least 50% of that should come to us.
Maulik Patel
Do you mean that approximately there is a 4.5 million ton of long-term volume has been signed by these three players, we expect approximately 2 million tonne to come to the additional volume.
Vinod Kumar Mishra
Maybe, but I cannot give the figure exactly that we hope like that. And I have said that we are trying to get the capacities books and offtaker so that they can bring more volume here. So maybe that 40% 50% of the volume which has been post will come to us.
Maulik Patel
So they need to put the capacity to the right additional capacity, which they have not done or are you in discussion to book that additional capacity?
Vinod Kumar Mishra
We are in discussion always that whatever capacity is available — they are available, they should book it because it’s in their interest. But otherwise, whenever they will have additional volumes, it will not be possible to get the slots they want. So we are in discussion with them that you know.
Maulik Patel
Yeah. And just one bookkeeping question. What’s the trading or inventory in this quarter? Probably I missed if you have mentioned it earlier.
Vinod Kumar Mishra
Trading gain is INR26 crore and inventory gain is INR83 crore.
Maulik Patel
This inventory gain is related to that Dahej internal consumption, which is 0.7%, which is which has been taken by any — which has allowed you to take for internal consumption. Is this inventory gain related to that?
Vinod Kumar Mishra
There has been — there has been a movement in the prices as you know from the last quarter to this quarter. It is largely because of the movement in price.
Maulik Patel
Okay. Got it. Thank you.
Operator
Thank you. We will take the next question from Shubham Sukla. Shubham, please go-ahead. Subham, request you to please unmute your line and go-ahead we can’t hear you,. We’ll take the next question for now. We’ll take the next question from Shivam Sharma. Shivam, please go-ahead with your question.
Shivam Sharma
Hello, am I audible?
Operator
Yes, sure. Please go-ahead.
Shivam Sharma
Yeah. So I have two questions. Essentially first question is understanding the tax structure, which is valid for once it gets — well, once it imports the LNG cargoes from — from countries like other than basic custom duty and SWS, do you also pay? And when you sell this gas to companies like, what is the kind of that, etc., which you pay? Because the motive for me to ask this question was to understand the impact of GST for, one is once the natural gas comes under GST. And the other question stands at that we have seen about 25% growth Y-o-Y of LNG imports, yet it is not reflected in the kind of volumes you are showing this quarter. So what do you think has been the bottleneck in order to revamp the volumes according to the revamping of the of the LNG imports in India.
Vinod Kumar Mishra
First question I will answer that what is the tax structure? As you know that natural gas is not in the GST as of now, we are in fact pursuing Ministry of Petroleum and then Finance that it should be included because this is national and it will give a lot of comfort to the consumers. So I think it is going on, discussion is going on and maybe government is keen to include it. This is continuously following with Ministry of Finance for bringing this. As of now, if it is not there, so in Gujarat, the rate of that is 15%, which we are levying on the uptakers while selling RLNG or LNG and locally they are taking gas to other states also, operators. And there they are again charging that while selling it to their customers — their customers. So this is how tax structure is and also as I said that 15% is a big problem in Gujar because it is in fact is levied and again the state tax wherever gas is sold again by our opticals, they are again paying back of that estate. So it’s a cascading effect of the VAT which is there and I think that has to — anomaly has to be removed and this can be done only through inclusion of natural gas under GST. So this is how is the tax structure. And in case this natural gas comes under GST, it will be huge benefit to the ultimate consumers because that’s getting effect of tax will go and they will be able to get the input tax Kerala, where we have Koshi terminal if the rate of that is 5%. So there it is not that high and most of the gas is consumed in Kerala or nearby towns or cities. So I think Kerala is not an issue, but the gas coming from Gujarat has a VAT of 15%, which is very-high.
Shivam Sharma
But this is something which needs to be paid by the offtakers, right? The VAT does not — does not get levied when you import the LMG from companies like Gatar.
Vinod Kumar Mishra
When you sell it to, when you sell it to Optacos, then only it is there.
Shivam Sharma
Absolutely. And do you get some kind of credit also, input credit or the opticals get some kind of credit also when they take the gas to some nearby states like Delhi or even if they take the gas to, let’s say, somewhere, someplace in Gujarat themself, do they get the —
Vinod Kumar Mishra
In of gas consumed in Gujarat, they may get some input task, right? But for the gas taken away from the Gujarat means which is not used in Gujarat, they don’t get any input tax credit.
Shivam Sharma
Understood, sir. Understood, sir. And the second question was again the impact which you see the 25% growth of LNG imports was there y-o-Y, but yet we see a decline in the utilization for your terminal. So why do you think that you know the utilization has not ramped-up according to the imports volumes?,
Vinod Kumar Mishra
This is not correct because looking at quarter-on-quarter basis, it may be lower. But you clear the nine months period, we have 686 TBTU brought in the hedge as against 646 TBTU in the nine months of the previous year. So there is a growth. So saying that volume has induced in this quarter, don’t compare only this quarter. You take the nine months period from April to December, you will find that we have brought more than last year. This is the highest-ever throughput of summer ’29, including both the terminal. In this quarter after taking the — all 3/4 happening to December. So don’t compare quarter-on-quarter basis because we give the facility also to the offtakers that they can bring within the calendar year till December. So they bring as per their convenience, but look at the nine months period, you find that we have 686 TBDU brought in the hedge as against 646 TBTU brought in last year, nine months. And Kochi also, it has been 43 TBTU in nine months as against 39 TBTU in the last year nine months. So this is the difference. So we have a growth trajectory you see.
Gyanendra Kumar Sharma
It is more or less in-line with the growth of India’s LNG imports.
Vinod Kumar Mishra
It is in-line with India LNG imports. So I think there is no concern on that account. So don’t compare each quarter as a standalone. Look at the overall in last 3/4.
Shivam Sharma
Understood, sir. Thank you.
Operator
Thank you. We’ll take the next question from Pratyush Kamal., please go-ahead
Pratyush Kamal
Thanks a lot for giving this opportunity, sir. Hello.
Operator
Yes, Pradesh, we can go-ahead.
Pratyush Kamal
Yeah. So my question stands out that I wanted to understand how the gain which you get on the marketing, the margins other than the regasification charges which you put on the offtakers. So I just wanted to understand whether the margins are put on this — just on the spot cargoes are also on the cargos, which is back-to-back length of 7.5 MTPA contract or the 1.4 MTPA contract with ExxonMobil. So how does it work? So other than the regasification charges, the service charges, how do you make the other margin — the trading margins?
Vinod Kumar Mishra
The long-term contracts, as you know that these are back-to-back contracts. And there is no marketing margin charge on that. It’s only the volume which we are selling, in fact, toward a short-term basis, we are charging some margin. But otherwise, if you look at it’s only the regasification charges which are there which is charged, there is no other marketing margin charge for the long-term contract, including this 1.4 to 5 mmtp of lock on-contract. So it’s only the spot we sail or short-term gas ECL that we charge marketing margin. But long-term contracts are back-to-back, there is no marketing margin?
Pratyush Kamal
Understood. And what is the kind of provisioning reversal, which we can see this quarter and a few quarters beyond this for FY ’21 and ’22? And what is the update on the FY ’23 of UOP charges?
Vinod Kumar Mishra
If you look at 2021 provisioning if you look at we have made total provision till-date of INR315 crores out-of-the total INR360 crores. So 87.5% of the provisioning is already made and we expect this to be realized by 31st March, when we get this money that we will gain because we have made the provision to the extent of INR315 crores. If we get the money against the user pay charges, this will be adding towards bottom-line. And you are saying about this year charges? Yes, that is INR117 crores only. And what is good part that the defaulters have considerably reduced the spend. Earlier year, you must-have seen four, five offtakers all had defaulted. But this time, only one customer has defaulted, that is BPCL, INR117 crores. Otherwise, all have complied with the contractual obligation this time, there is no default in any accounts. So whatever concession we are making is just to discipline them so that in future there is no default. Maybe last two years, three years we have given them time to bring the volume and get it waived. But at the same time, we have seen that this contract is a long-term contract for regasification and we have to, in fact people kind of discipline in the contract and if they are — they fall in-line with our issue, then perhaps there is no reason why we should not give some kind of relaxation in the past period, which is evident from this time because they have utilized the entire contractual city and they have complied with their obligations as per the contracts, only one customer has defaulted. So hopefully next year that will also be not there.
Pratyush Kamal
But FY ’21, ’22, you do have the back guarantee, but what about the FY ’23, ’24 defaults, if any, FY ’23, we don’t — there was a default. So what about those defaults and like how do you planning to recover the amount which has been defaulted since you don’t have any bank current?
Vinod Kumar Mishra
Yes. This 2023 also, we have got the approval of the Board yesterday and we are going to give the same kind of mechanism to bring the volume in next three years, maybe this — by December ’26 for ’23 also. So this kind of dispensation we have agreed and perhaps they will provide us and bond and thereafter this particular mechanism will be available to them. So similar to ’21, ’22, ’23 will also be there. So this is the mechanism for recovering INR610 crores. As I said, this year it is pre-marginal INR117 crore. Hopefully, next year there will not be any default.
Pratyush Kamal
Understood, sir. And how does this provisioning work-in accounts? You make the provisions for the — for the amount which has been defaulted and whenever you get the money, you reverse that provision. This is how it works or is it different?
Vinod Kumar Mishra
Yeah, sir we are waving off the — whatever use of the charges are there, they bring additional volumes over and above the annual contractual commitment which they have made. They bring the default quantity over and above this annual commitment, then we adjust to that extent the charges for that year maybe ’21 or ’22. So this is like this?
Pratyush Kamal
Understood. Thank you, sir.
Operator
Thank you. We’ll take the next question from Sabri Hazarika. Sabri request you to please go-ahead with your question.
Sabri Hazarika
Yeah, hi, am I audible?
Operator
Yeah.
Sabri Hazarika
So a few questions. Firstly, I mean, you — regarding your capex, you said you’ll be doing INR1,500 crore this year, right? And next year would be INR3,500 crores. Was that right?
Vinod Kumar Mishra
This year may be around INR1,500 crore because we have already spent INR940 crores-odd. I76 crores. Maybe it was — you can take 400 more 1,400 crores to 1,500.
Sabri Hazarika
And how much would be on petrochemicals out of this INR976 crore,
Vinod Kumar Mishra
340 crore, 340 crores in your — it may further go maybe INR500 crore, it may happen after March up to March.
Sabri Hazarika
Okay, fair enough. And secondly, if you gave this number INR840 crores of regas service income. So this includes the take or pay also, right, that INR117 crore is also included here. Is that right?
Vinod Kumar Mishra
Yes, yes.
Sabri Hazarika
Okay. So pure service income will be basically INR40 crore minus INR107 if we had to compare it with the volumes.
Vinod Kumar Mishra
Yes, yes, yes, you can.
Sabri Hazarika
Okay. And thirdly, this once — I mean you have mentioned that INR315 crore of provisions you have made. So as soon as the bank guarantee gets cashed, in the books of accounts also, we will see INR315 crore basically as a provision reversal in other expenditure for the particular quarter. So that is how the earnings will show, right?
Vinod Kumar Mishra
Yes.
Sabri Hazarika
Okay. Okay, fair enough. And lastly, the bookkeeping questions. I think work on volumes in Dahej and and India’s numbers actually.
Rakesh Chawla
In volumes, YTD is 13 TBTU. You can derive the quarter — quarterly number right. And numbers is INR160 crores positive at gross margin level. This is a quarter, right? Yeah. Yeah, okay. And INR53 crores of ForEx loss, INR7 crores positive at the other expenses level, then depreciation INR82 crores and the finance cost INR64 crores.
Sabri Hazarika
Okay. So okay, got it. So INR32 crores. And this other expense, does it have anything further other than forex loss? It’s INR500
Rakesh Chawla
No, some small leases are also there, which are affected and the impact of that is taken in the other expenses. And the lease for the charters, time-charters which mean the LNG that is coming on the gross margin line.
Sabri Hazarika
Okay. Okay, sir. Thank you so much and all the best, sir.
Operator
We’ll take the next question from Mayank Maheshwari. Mayank, please go-ahead.
Mayank Maheshwari
Thank you for the call, sir. Sir, first question was on chemicals. In terms of the progress, can you just talk to us about where we are on the progress, what has been done, what’s kind of going through in fiscal ’26 for you? And the second question was related to Dahej, you talked about 40%, 50% utilization rate. So in your time-frame over the next three to four years, how do you see the capacity mix between spot versus contracted for Dahej eventually panning out?
Vinod Kumar Mishra
My question is regarding petrochemical. So as you know that we are already going-in May and most of the things have been finalized in terms of long-lead items. And we are in the process of placing orders for petrochemical. Maybe to large extent big items will be ordered right now, but it takes time to get those items because it takes some time, but we shall be ordering this. We have already finalized and given it to our PMC India Limited. We are now doing the for placing of the orders. So as far as the capex is concerned, as I said, we expect INR3,000 crores to INR3,500 crore of capex next year for capital programs. And as you know that we are also tying up with the vendors and we are in the process already, we have invited a consultant who is doing this job and we shall be doing the financial close-up for financing of this project, as we have already told you earlier that it will be 70 30 debt. So probably this will be finalized within next three, four months. And thereafter, we shall be ready for any kind of capex. But initially, as you know that capex will be hardly 15% to 20% for first year, 25% 26% and then it may ramp-up to 30% and gain next year to 35% like that it will be there. So we expect that this year there should be capex of around INR3,000 crores to INR3,500 crore for this project and we shall be going-in a big way very shortly because we have already made the preparations and as soon as the orders are placed and we shall be going to get the and thereafter US shall be buying the contractors to start this work.
Mayank Maheshwari
Sir, and sir on the imports, especially on ethane and propane, is there any more progress that you have been able to make in terms of long-term contractual terms there? Has any progress been made-for that?
Vinod Kumar Mishra
Yeah, I think the process and very shortly will come to know that what we are doing. We are vigorously following-up with the buyers for contracting. All the issue is that for as you know that we have to get some kind of tie-up because right now there is no written agreement with the optakers, unless there is a tie-up, we cannot do long-term agreement for ethane because another model which has been discussed, maybe that offtakers may bring their own ethane volume, we shall be doing only handling of this ethane. So this will happen like LNG. This must happen, but otherwise we are also ready for the kind of sourcing of ethane and then supplying it to the uptakers. As you know that one of the customer is there for ethane and right now because we have a contract with RasGas where we are getting rich gas and starting C2, C3 and giving it to and ONGC supplying to a par. But going-forward after 2028, has not committed any rich gas. So there is a difficulty for Opal because it will not get the rich gas, we cannot extract C2, C3. So that’s why we are pursuing ONGC that they should tie-up with us after 2028. We can import the ethane also and supply to them because it’s in proximity to our Dahej plant. It is possible to supply from our plant and it’s easier to get it because we have our own jetty, third jetties being constructed has already started for third Jetty which can import pre-liquid hydrocarbons, ethane, propane as well as LNG. So I think as soon as the agreement is signed between PLL, we shall source ethane. But as far as propane is concerned, we are looking-forward to tie-up for sourcing of the prepared either on short-term or mid-term or maybe long-term basis. This we have to see which is more beneficial.
Mayank Maheshwari
Got it, sir. So I think on the ethane front, I think there has been quite a few petrochemical companies in the region who have been telling us ethane carriers has been a bit of a bottleneck. Do you see that as an issue when you’re kind of trying to kind of contract whether you’re for your own purpose or for third-party as a logistical challenge?
Vinod Kumar Mishra
Well, ethane carrier is of course a challenge because there is no ethane carrier available readily in the market. So we will have to order that ethane carrier. But only thing is that if some offtaker is bringing its own ethane, then we need not order for that ethane carrier also. But in case we agree to sign an agreement with us to supply ethane as well as handling of the ethane, yes, at Delhi, we will also order the ethane carriers and that will be possible only after there is a type with the customer. Otherwise, we will not do that because there is no need if we are not importing it there.
Mayank Maheshwari
Got it. And sir, just last question on the
Operator
Sorry to interrupt you. Request you to please join back-in the queue. Sure. Interest of time. Thank you. We’ll take the next question from Ambar Taneja. Amber, please go-ahead.
Ambar Taneja
Hi, can you hear me?
Operator
Yes. Yes, we are audible.
Ambar Taneja
Yeah, sir, please talk a little bit about two things. One is, what kind of pricing environment do you see for short-term cargoes, let’s say, in the next six months, 12 months, 18 months, whatever you think is worth sharing with investors. And number two, can you talk a little bit about FX impact because we’ve seen some other companies that are into imported products. They have — some of them have been able to pass-on, some of them have not been able to pass-on 3%, 4% depreciation and I think widely expected that 4%, 5% next year as well. So anything in your contracts to protect? So appreciate if you can talk about these two things. The spot prices, any term prices and FX.
Vinod Kumar Mishra
So as far as the spot price is concerned, it is likely to remain in the range of $12 to $14 in the next six months. This is our anticipation. But as I said that future going-forward, if you look at the capsidies which will be available to the international market after 2026, we are hoping that these values should be in the range of $7 to $8 because the capsidies which is coming more than that more than 200 million tons of capsidies are coming after ’26 ’27. I hope that there will be glut of LNG in the market. And when there will be glut, certainly its benefit will be to the consumers and the countries who are consuming the LNG.
Ambar Taneja
So when there was a previous clutch when gas went to $3 before COVID, then why did it — why did we not either buy some stakes in upstream or sign some new term contracts. I mean that time went without us taking advantage, right? So I mean, is there a real benefit to having a glut without us taking action?
Vinod Kumar Mishra
Not like that. That glut was there because of COVID. And that time, at $3, many plants are liquefaction plants are not sustainable. It’s — if had there been a pricing of $3, many plants would have shut-down. It’s not that it’s a very viable price for LNG terminal also, but $6, $7, $8 is still a viable price for the LNG liquefication. Compare that situation, which is very abnormal. But going-forward, lot of our PIDs have been made. So I think these glast will be coming up in next four, five years, you will see the glut in the sense that the demand. I’m not saying this glut will always remain glut. Because there is availability of more gas in the market. Certainly more consumers will be there. And as you know, the energy growth is already there. Consumption will always be there. So in-going up, energy consumption will be going up. So it will also match with the supply. But only thing pricing will be moderate. I don’t worried about pricing only. Indian market is price-sensitive and whenever the prices are lower, consumption suddenly rises. We have seen our case also our terminal utilizes maximum capacity when the prices have moderate, had it been around $10, $9, our terminal would have been utilized more than 100%. Pricing impact which is there on our utilization, it’s a true for the Indian consumers that they tend to utilize alternate fuels if the prices of LNG is — as I said, $12 to $14 is still sustainable price, but it should be in the range of $7, $8, certainly the consumption of LNG will be much, much more in India and LNG consumers will be higher in India. So looking at the kind of absidies which are coming in future, I hope that it should be in the range of $7, $8 in future. And right now, it is likely the next one, two years you see it may range from 10 to INR14.
Ambar Taneja
Okay. And anything about FX?
Vinod Kumar Mishra
FX, as you know that our long-term contract, whatever foreign-exchange exposure is there, we are passing it to the offtakers. So there is no foreign-exchange risk for us. So I don’t foresee any FX impact on us. But for India’s purpose, we normally assess this impact. That certainly we are doing because NDS 116 is there where we are doing the lease accounting. So for that purpose, we are accounting this foreign-exchange impact. But not in case of LNG where we are passing on the foreign-exchange variation to the offtakers.
Ambar Taneja
Okay. Thank you.
Operator
Thank you. We’ll take the next question from Rishab Singh. Rishab, please go-ahead request you to please go-ahead with your question hello, can’t hear you, Rishab. We’ll take the next question from Somaya V. Please go-ahead with your question.
Somaya V
Hello.
Operator
Yes, please go-ahead.
Somaya V
Yeah, thanks. Thanks for the opportunity, sir. Sir, first question, the annual price hike that we take-in Dahej. For this year, have we taken it? What are the current tariffs in both Dahej and Kochi. And if you could share any timeline that we are looking for this 2028 long-term contract tariffs?
Vinod Kumar Mishra
The hike is there in Dahej and we have taken from 1st of January, we have hike our price of regasification by 5%.
Somaya V
What are the currents both in Dahej and
Vinod Kumar Mishra
Normally we are not disclosing mean not good thing, but only question which has been answer is that there is a hike of 5% from this year. And okay, sir, got it. In the market, you can add it. We cannot disclose it.
Somaya V
Got it, sir. So also in those 2028 long-term 7.5 contract,
Vinod Kumar Mishra
We are in fact in discussion and shortly after maybe sometime, maybe it may take six months or maybe one year time. And I think, but still there is enough time left for finalizing the contract. But they have committed that they will take entire volume on back-to-back basis as has been done in the existing contract when we first signed gas and similar offtake arrangement will be there. Only thing we have to finalize in terms of the contract will be very shortly, maybe six to six months-to one year it will be finalized and then we shall sign the contract and it will go-ahead and
Somaya V
Got it, sir. Sir, second question is on Kochi terminal. So how do we see utilization? I mean the Kochi-Mangalore pipeline progress and how do we see it for next couple of years? So from 20% 25%, do we see it going to 40% 45% in the next couple of years?
Vinod Kumar Mishra
Yes. As far as the Pochi is concerned, as I have earlier conferences also, I have told that this kochi Bangalore section is yet to be connected and as of now, the connectivity from 40 to Badu is there, but from Badu to Bangalore connectivity is still complete. So maybe by June or June ’25, it should be ready. Once it is connected to Bangalore section, there is a likelihood that utilization level will further increase because then it will be connected to natural gas grid. And as you know that once it is connected to natural gas grid, we can swap the volumes and can sell our Pochi gas anywhere in India or any other customer also can take our gas and supply to the nearby customers. So that benefit will be there because as you know that there is a unified tariff regime already there. So in Zone 1, the tariff is around INR40 rupees. So if any customer like Gale has any customer in this country near Kerala or near the, they will prefer to take volume from us by swapping this gas and then supply to the customer because their customer will be benefited as they will be charged a one tariff of INR40 rupees because they bring it from and supply to a customer in Karnataka or in Kerala and the Zone 3 tariff will be there, which is around INR140%. So it will be in the interest of the consumer that they should get the gas of the nearest source available. So it’s not only me that I will supply the gas. It is also possible that any other offtaker, whether it be or or BPCL, they can take their volumes to be supplied in this region Karnataka and Kerala from Kochi instead of bringing it from so that they can give the competitive price of the gas. So then it will be utilized, I think 40% to 50% this is connected to natural gas grid.
Somaya V
Got sir, one clarification on the pitchem. You mentioned INR3,500 odd crores of capex per annum. So what would be the spend in FY ’25-’26? That is one. And I mean the timelines for the PITChem startup, if you can just confirm on that. Thank you
Vinod Kumar Mishra
As you know that this time, ’24 ’25, we are likely to spend INR400. We have already spent around INR40 crores. Next year, we shall be — we are planning to spend around INR3,000 crores to INR3,500 crores of capex for petrochemicals. And as you said, when it is likely to come up, our scheduled date is November 2027. So that is a time when it should be commissioned and maybe by ’28, it should be ready for. So I think this is the timelines for completion of project.
Somaya V
Capex.
Vinod Kumar Mishra
Capex is around till nine months crore
Somaya V
Looking for FY ’25-26.
Vinod Kumar Mishra
FY ’24 ’25-26. I need two weeks other than PATChem it should be around 1,000 from maximum. These are project which is going on is third Jetty all these contracts have been awarded and total contract value around INR1,904 crores. That is a major capex item going on. Apart from that capex is only chem. So Palpur will start as and when the approvals are there. So I think this is I think INR1,000 crores more, maybe INR4,000 crores total capex may be there, 10,000 to INR4,500 crores, including PATCAM.
Somaya V
Got it. Helpful. Thank you.
Operator
Thank you. We’ll take the next question from Nirmal Gore. Nimal, please go-ahead with your question.
Nirmal Gore
Hello. Hi, thank you for the opportunity. My question is a follow-up to the global LNG gas capacity that you put up for the global. So my question is just a clarification, how do you see this gas happening? Is it second-half of 2026 or 2027.
Vinod Kumar Mishra
Well, just repeat your question. Your voice is not audible.
Nirmal Gore
Hello. Am I audible now?
Vinod Kumar Mishra
Now it’s audible. M
Nirmal Gore
My question is a follow-up to a previous question that you answered. Wanted to understand when do you see the gas happening due to increased global LNG capacity? Is it 2026 second-half or 2027 for
Vinod Kumar Mishra
It should be ’27 onward, I think because most of the plants are under-construction. And next two to three years, they should be ready for production. So we make it ’27 onward because even Gas this other energy projects are also likely to be done by ’27. So after that only this — and ramp-up also takes some time. So maybe, 27 28 maybe the year then there will be likely glut, but real glut will be 2035. Around 30 it will be there, 150 million to 200 million tons of capsidies will be there by 2030. So that means that 150 million to 200 million tons capsidies in addition to whatever is there right now. So I think that is what I was talking about as most of the projects are under-construction and after assuming the office by President Donald Trump, it’s likely that very baby drill kind of concept that has a production of gas and in US that will further promoting the production of gas international market.
Nirmal Gore
So this $7 to $8 price that you were mentioning about that should — we should see that in 2030
Vinod Kumar Mishra
We are expecting only. I’m not saying it will be $7, $8 in two, three years, but maybe after ’27, ’28, it should be there because this Qatar energy capacity itself will be ramping-up to almost 143 MMTP from 77 MMP. We are doubling their capacity almost. So that means that there will be enough gas available in the market. So I’m talking about Ting US capacities are coming up in a big way. That’s why I’m saying 150 to 200 MMTPA will be there.
Nirmal Gore
Understood, sir. Thank you.
Operator
Thank you. In the interest of time, we’ll take the last question from Nitin Tiwari. Nitin, please go-ahead with your question.
Nitin Tiwari
Hello. Hi, thanks for the opportunity. I hope I’m audible. Just like some clarification I was seeking. So in terms of user pay, right, given the provisioning we have made and the kind of user pay charges that stand as of date. So now we are clear that like no more cargoes can be brought in to make-up for those charges. I mean, the timeline for that was December last year that understanding is correct?
Vinod Kumar Mishra
Yes, yes. It is correct for ’21 calendar year, this is over now. Whatever cargos they are paying they have, there is no time left now.
Nitin Tiwari
Right. So whatever the charges are there for ’22 and ’23, they are still open for cargoes to be brought in against them. That’s the right understanding.
Vinod Kumar Mishra
Until December ’25 or calendar year ’23.
Nitin Tiwari
So sir, if you can just summarize for us in terms of what are the current user pay charges that are outstanding, what is the provision that we have made against them, which are now non-recoverable, I mean, sort of provision that we have done and what is the recovery that we have done against the user pay charges by the cargoes which have brought in? I suppose there is a figure which is given in the results release as well of INR184 crores roughly. So is that we have?
Vinod Kumar Mishra
That is the kind of waiver we have done, 184 crores. This quarter we have done INR49 crores.
Nitin Tiwari
Correct, sir. So just like for keeping all of us on the same page, so what are the current user pay charges which are outstanding and what is the provisioning that we have made? And against what are we expecting like now the cargoes can be brought in for recovery? What amounts.
Vinod Kumar Mishra
So if you look at the total use of the charges as of now are INR1,66 crores and we have made a provision of INR702 crores. So around INR963 crores INR964 crores is that other than provision, net of provision. Right. So if you look at this ’21 calendar year, I’ve told you clearly that there is no time left. So whatever charges are there, these INR60 crores, they are due for payment. They cannot be any waiver of the charges now. And as far as calendar year 2022 is concerned, since INR95 crore is there, out of which provisioning is already made instead of INR295 crores. So this is the of 22. But there is still time left for utilization of this we can still get this benefit. We bring more cargoes this year in December ’25. And as far as calendar year 2023 is concerned, total movement charges are INR610 crores, of which we have extended similar scheme that has been done for ’21, ’22 and they will give the and demnity bond and they can bring this volume till December 2026.
Nitin Tiwari
Understood. So the INR184 crores that has been recovered, it has been recovered against the INR360 crore user pay charges of 2021, right?
Vinod Kumar Mishra
No exactly maybe ’22 also. This is combined impact because we are giving impact for both the years. Some of the have defaulted in ’22 only. So we have brought the cargo. So ’22 charges have been reversed. So combined ’21 and ’22, 184.
Nitin Tiwari
Understood. So basically, Joe, net INR963 crores, which are now outstanding, cargoes can be brought in against these — this amount because INR700 crores is already provisioned for.
Vinod Kumar Mishra
Yes, yes. INR700 crore has already been provided.
Nitin Tiwari
Right. And sir, I missed out on the inventory gain number that you mentioned for the quarter.
Vinod Kumar Mishra
And as I said INR83 crore is the inventory gain, INR26 crore is trading gain, total INR109 crore.
Nitin Tiwari
Right. And lastly, sir, if I may. So if everything remains the same as far as pricing environment is concerned for LNG, so what is the kind of utilization we are looking at in FY ’26, I mean, in terms of throughput, what are we looking at?
Vinod Kumar Mishra
Additional level, as you know that this quarter it has been 93%. But we expect this to remain in the range of 95% to 100% on the expanded capacity. That’s what we are talking about.
Nitin Tiwari
So I’m looking for some guidance for the throughput, right?
Vinod Kumar Mishra
Is already highest-ever in nine months. So I think this will continue. We are always optimistic about our specific guidance that you can provide in terms of say, 4 million. It’s not my guidance, it’s market which has to impact decided. But we can only expect it that it should be in this range. And accordingly, if you look at nine months, it has been wonderful. As I said, highest-ever volume throughput. So there should not be any challenge as such as far as the throughput is concerned, and I said that 95% to 100% means already B2B utilized.
Nitin Tiwari
Okay, sir, great. Thanks for answering my questions, sir. Thanks for the opportunity again.
Operator
Thank you, everyone. And that was the last question. And before we end, on behalf of, I would like to thank the management for the opportunity to host this earnings call over to the management team for any closing remarks.
Vinod Kumar Mishra
Thank you very much to all of you. And as I said that which we have been able to give a better performance this time as compared to previous quarter, this quarter. But still a lot we expected could not be, but hopefully in future, we will try to bring in more volume, utilize the terminals more-and-more to the extent of at least 100%. And our effort is whatever is the expansion going to take place in next year, it should also be utilized to great extent. So now your capacity utilization next year will be in terms of the expanded capacity. So we have to look at that how much we can utilize in futures. But as I said that we are committed to do — to give the best performance and thank you very much to all of you.
Operator
Thank you, sir