Petronet to spend Rs40,000 crore over the next 5 years

5 Sep 2022 , 09:33 AM

In order to increase profitability to Rs 10,000 crore, Petronet LNG Ltd, India’s largest gas importer, would invest Rs 40,000 crore over the next five years in both increasing import infrastructure and entering a new industry.

According to the most recent annual report from the company, Petronet, which manages two liquefied natural gas (LNG) import facilities in Kochi, Kerala, and Dahej, Gujarat, is considering entering the petrochemicals industry. For exponential expansion and diversification, the organisation has developed a “1-5-10-40” plan.

“Over the next five years, the Company expects to achieve an annual sales of Rs 1 lakh crore and an annual profit after tax of Rs 10,000 crore with investments of Rs 40,000 crore,” it stated. On a revenue of Rs 43,169 crore, it generated a net profit of Rs 3,352 crore, or profit after taxes (April 2021 to March 2022). LNG stands for natural gas that has been cooled down to a liquid state for simpler ship transport.

Before being piped to end users like power plants to produce electricity and fertiliser units to create urea and other agricultural nutrients, LNG is regasified at the import terminal into its gaseous condition. At an anticipated cost of Rs 600 crore, Petronet said it is increasing the Dahej terminal’s import capacity from 17.5 million tonnes annually to 22.5 million tonnes.

5 million tonnes of LNG may be imported and reclassified annually at Petronet’s Kochi terminal. At the Dahej LNG terminal, the business stated that it also intends to build a petrochemical plant based on imported propane. Additionally, it is “looking at the possibility of building up a propylene derivative complex soon.” However, it didn’t provide project cost estimates or timetables. According to Petronet, it has been selected as one of the possible bidders for an LNG terminal in Matarbari, Cox’s Bazar in Bangladesh, and it is also considering projects abroad.

Additionally, according to the annual report, it is “investigating the commercial prospects in the LNG value chain in Sri Lanka and in the process of engaging with possible counterparts, including the government of Sri Lanka.” On March 7, 2022, the business “formed Petronet LNG Singapore Pte Ltd, a wholly-owned subsidiary company, with the intention of becoming a worldwide LNG player.”

It continued, “Petronet LNG Singapore Pte Ltd has been incorporated to carry out business/activities, including but not limited to purchase of LNG on the long-, spot-, and short-term basis and sale of LNG, trading of LNG to Indian and foreign companies, optimization and diversion of LNG under its portfolio, carry out hedging, make investments in international ventures, etc. Currently, LNG is imported by Petronet via long-term agreements from Qatar and Australia.

For onward sale to real customers, the re-gasified LNG is provided to off-takers GAIL (India) Ltd, Indian Oil Corporation (IOC), and Bharat Petroleum Corporation Ltd (BPCL). Petronet is owned by GAIL, IOC, BPCL, and Oil and Natural Gas Corporation (ONGC), which each have a 12.5 percent share.

Your organisation also recognised a need for the decision-making process for its executives at various levels to be optimised in order to accomplish this difficult objective (of 1-5-10-40).

As a result, the organisation began a thorough exercise to review the current delegation of authority, wherein the executive powers were streamlined to meet its evolving business demands.

According to the annual report, Petronet also recognises that the company’s HR policies and procedures must be in harmony with and aligned with its strategic goals. As a result, it was crucial to review the whole range of HR policies and align them with industry best practises.

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