Ladies and gentlemen, good day and welcome to the GAIL Limited Q1 FY 2022 earnings conference call hosted by Yes Securities. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and zero on your touch-tone telephone. Please note that this conference is being recorded. I now hand the conference over to Mr. Nitin Tiwari from Yes Securities. Thank you, over to you, sir..
Thank you, Karuna. Good evening, ladies and gentlemen. On behalf of Yes Securities, I welcome everyone to GAIL Limited's first quarter FY 2022 earnings call. Today we have the pleasure of having with us the senior management team from GAIL Limited, led by Director Finance, Shri A.K. Tiwari. I will now hand over the call to the management for their opening comments, which shall be followed by a question and answer session. Over to you, sir.
Good afternoon, my dear friends from investors and analyst community connected through Webex. A very good afternoon. Welcome to the GAIL earnings call Q1 FY 2022. Thank you all for taking your precious time and showing keen interest in the results and performance outlook of GAIL. We have declared the results of the first quarter and the year 2021/2022 earlier today, and I'm sure that you must have got the opportunity to go through it. I will give you a very brief insight of the company's performance for the quarter ending 30th June 2021. Due to localized restrictions and lockdowns imposed by the various state governments to curb the impact of second wave of COVID-19, the demand in certain pockets were slightly impacted in the quarter as compared to the March quarter.
The performance is much better as compared to Q1 of the last financial year when we witnessed a nationwide lockdown. I will share about the physical performance for the Q1 FY 2022 versus Q4 FY 2021. Gas marketing stood at 95.95 MMSCMD in Q1 FY 2022, as against 91.37 MMSCMD in Q4 FY 2021, increase of 5%. The natural gas transmission stood at 107.66 MMSCMD in Q1 FY 2022, as against 109.75 MMSCMD in Q4 FY 2021, decrease of 2%.
The capacity utilization decreased to 52% in Q1 FY 2022 as against 53% in Q4 FY 2021. Polymer production stood at 133 TMT in Q1 FY 2022 as against 224 TMT in Q4 FY 2021, which is decline of 41%. The decline was mainly attributable to the maintenance activities during the quarter. The plant is now running at full capacity. We are confident to achieve 100% production capacity on a full year basis.
The polymer sales stood at 138 TMT in Q1 FY2022. Similarly, the LPG sales stood at 250 TMT in Q1 FY2022, and LPG transmission stood at 1,023 TMT in Q1 FY2022. Now I would like to give the financial highlights. GAIL achieved gross turnover of INR 17,352 crore in the current quarter as against INR 15,472 crore in Q4 FY2021. Increase of 12%, mainly due to increase in the natural gas marketing volume, higher natural gas prices, higher LHC prices, which is around INR 2,500 per metric ton, and higher petrochemical prices, which is around INR 4,500 per metric ton. However, this was partly set off due to the lower sales quantity and polymer and marginal reduction in the natural gas transmission volume, which I have already explained. The profit reported stood at INR 2,054 crore in Q1 FY2022, and as against INR 2,612 crore in Q4 FY2021.
The gas marketing segment has shown a robust performance, which increased to 33%. PBT was INR 1,530 crore in Q1 FY22 as against INR 1,908 crore in Q4 FY21. I will talk about the consolidated financial results, Q1 versus Q4 FY21. The turnover in Q1 FY22 is INR 17,551 crore as against INR 15,677 crore in Q4 FY22. The PBT was INR 2,540 crore. Against INR 3,219 crore, and the PAT INR 2,138 crore as against INR 2,407 crore. During the quarter, GAIL received 23 LNG cargo from U.S., 14 from Sabine Pass, and nine from DCP, as per the cargo plan. The total 15 cargos were sold in the overseas market, and the remaining were brought to India, either directly or through destination swap.
On CGD front, GAIL is supplying gas to all six CGDs with infrastructure of eight CNG stations and more than 136,000 PNG connections with a cumulative CapEx of INR 832 crores. GAIL Gas, which is 100% subsidiary of GAIL, during Q1 FY 2022, the gross turnover stood at INR 1,212 crores. If you talk about the CapEx plan, as I have already informed number of times that in the coming four to five years, we have around 8,000 km of pipelines which are there, including the JVs and subsidiaries which are associated with GAIL, and around INR 40,000 crores of the CapEx which are there. These CapEx plans are being achieved mainly on the various pipeline projects. Srikakulam-Angul pipeline, 744 km with an investment of INR 2,700 crores, and the completion is July 2022.
Dhamra-Haldia pipeline, 240 km, investment of INR 1,200 crores, completion in November 2022. Mumbai-Jharsuguda pipeline, 1,755 km, investment is INR 7,800 crores. Gas pipeline infrastructure in the northeast states, 1,650 km, investment INR 9,300 crores. Vijaipur-Auraiya, 174 km, is already commissioned. Dhamra-Angul, Bokaro-Angul, Durgapur-Haldia, Barauni-Guwahati, all these pipelines which are there are under active execution plan, and we are doing. Far as Pradhan Mantri Urja Ganga Yojana pipelines are concerned, our total commitment is INR 14,916 crores, and our actual CapEx is around INR 11,600 crores. We have been receiving the capital grant from the government on regular basis, and till that, we have received the capital grant of INR 4,487 crores.
I have already told that GAIL, along with the JVs, is executing various pipeline projects of 8,000 kilometers, incurring around INR 38,000 crore-INR 40,000 crore. Far as the CSR plans are concerned, various programs on health and sanitization, education, skill development. We are doing more than 2% of our profit on the CSR projects. Our plants have run safe, and we have ensured that the safe operation is there. We have 0 major reportable incident during the last four years, and we are monitoring our HSE performance regularly, and all our efforts are being taken. We are also taking various initiatives on the digitization, which adds satisfaction to the employees as well as the vendors, customers, contractors, suppliers, and all, including our retired employees. We are having various initiatives for satisfaction or for taking care of the stakeholders through our various initiatives.
We have also taken various measures during this pandemic situation and taken various welfare measures to our employees as well as to our retired employees. That way, 360 degree stakeholder management we are trying to have. This was a brief introduction on the financial results and major highlights of the company. My team is here. I would be happy for your questions, and we'll be happy to reply for that. Over to you.
We can take the Q&A now, the question and answer session.
Sure.
Yeah. Thank you. Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Thank you. The first question is from the line of Probal Sen from Centrum Broking. Please go ahead.
Thank you very much, sir, for your time. Am I audible, sir?
Yes, yes, please go ahead.
Yeah. Sir, on the Petchem, you mentioned that despite the, obviously the decline that has happened in this quarter, you are confident of achieving full capacity utilization for the full year. Just wanted to understand, does that imply that for the full year, we should still assume overall volumes to touch close to 800,000 tons despite the shortage in this quarter, sir?
Yes. See, every year there is an annual maintenance.
Okay
which we normally take after close of the account year.
April, May or June.
Right.
In the month of April, we took the opportunity of this pandemic situation, and we also closed our, means we had our maintenance also, regular maintenance also. That way, we completed our maintenance. That's why the production was less. We are more than 100%, means confident to achieve more than 100% of the plant production. Be assured.
Got it, sir. That's very useful. The second question was with respect to transmission volumes. Obviously, we have seen, as you mentioned in the first comment, that the lockdown did impact demand in certain pockets, and there was a small QoQ decline that we saw in volumes for this quarter. Earlier, if I remember, sir, you had given guidance of around I think 5, 6 MMSCMD improvement in overall numbers for FY 2022. Do you think there is a need to revise that guidance, sir, as of now?
No. Actually, what happened, our own volume was up, but shippers' volume, the volume which are being transported by other entities was less.
Sure. Right.
That was the reason of the volume. Otherwise, the performance, that way, the transmission segment was good.
Against 104 odd MMSCMD that we, sir, did in FY 2021, we still maintain our broad guidance of around 110, 111 average levels for FY 2022.
It will be more than that because our own volumes are getting increased with the upcoming fertilizer plants, which are already there and which may consume gradually the volume of around 8 to 12 MMSCMD. That is going to add the volume, not only in the transmission segment, but also in the trading segment. That way, we are confident to achieve more than 110.
Great. Sir, one last question if I may. On the trading front, obviously the numbers continue to do better given what we have seen of spot LNG prices versus U.S. prices. In this quarter, that is Q2, I'm saying, that trend has improved even more. Is that a fair way to look that profitability should continue to expand even more from the current quarter levels for the trading segment?
It will be much better. Yes. Hello?
Sir, the current participant is moved out of the queue. We will move to the next question.
Yeah.
That's from the line of Amit Rastogi from UBS. Please go ahead.
Sir, congratulations for such a strong performance despite a very tough operating environment. My question pertains to any update on the fertilizer plants, if you have taken, and what is the volume we will do in the Urja Ganga project in this year and next year?
See, in the Urja Ganga pipeline projects, our Sindri, Gorakhpur, these fertilizer plants which are coming up, the volume growth will be around 8- 10 MMSCMD in a gradual manner. Commissioning of these Gorakhpur plants and Sindri plants and other plants are actively being planned. In this financial year, it will be 8-1 0 MMSCMD growth will be there.
Okay. Sir, when spot LNG prices are touching $14, you think that it hurts our Petchem profitability as well because we import lot of natural gas as a feedstock for the petrochemical business. Do we get any benefit of higher LNG prices in our trading business right now? Are we booking more volumes for the next year, or do we have any cargoes to be sold for this year?
Number one question is your petrochemical pricing are concerned. We are not dependent on the spot, means cargoes or spot prices. We have mixed portfolio and which are better for the petrochemical plants. We supply the gas of that portfolio only. That way, as you know, we have U.S. volume, we have Gazprom, we have the spot also. We have so many sources. That way we optimize and we also have that portfolio being used for the petrochemical. That, I think with the current prices of petrochemical and with the market condition, we are going to have better realization in the petrochemical.
Okay. Sir, what about the impact of higher LNG prices on our trading portfolio? Do we get any substantial profitability in this year or next year because of higher JKM prices?
Sure. Whatever the portfolio is there on the indexation differences as well as the prices which are there, the volume which are there, the strategy we have, including our destination swap as well as the hedging, certainly it is going to increase.
Okay, Sir. Thank you, Sir. Sir, wish you all the best. I wish everyone stay safe. Thank you, Sir.
Thank you very much.
Thank you. The next question is from the line of Siddharth Gundecha from ICICI Securities. Please go ahead.
Yeah. Thank you. Good afternoon to all. My first question is regarding the first quarter gas trading. Just wanted to ask that in first quarter, you had stated on your last earnings call that some volumes were tied up when oil prices were lower. Was a higher proportion of trading volume in first quarter tied up when oil prices were lower? Will that proportion reduce as we go from Q2, Q3, Q4?
See, that way I can't answer your point because each cargo, its own strategy.
Which are tied up, which are being sold in the international market or which are having destination swap as well as so many other things are there. That way an answer can't be.
No, sir, where I'm coming from is-
No, let me finish.
Yeah. Please.
I would like to just inform to the all investors including you, that we'll be doing better as we have done prior to, means previous years also. We'll be doing better in the gas marketing segment.
Previous years means, sir, when you are saying previous, you are saying you are better than your best year, which is FY 2019?
FY 2019, FY 2018, FY 2019.
Yeah. You will do better than that also, you are saying?
Yes.
Okay.
See my confidence speaks for itself.
Sir, what I was trying to understand is that as oil prices were moving up, you must have been more keen to first tie up volumes even when oil prices were somewhat lower for first quarter. You may not have been in so much hurry to tie up volumes for Q2, Q3, Q4, and that is where my question was that, was larger proportion of it tied up when oil prices were, let's say, 54, 55 or something, the futures? Are smaller proportion of volumes in Q2, Q3 tied up when oil prices were low? That was my question, but if you don't want to answer that's fine.
No, I will answer that. For four years I have been giving you answers. You listen to me, your fear has always been there, and I have always tried to tell you that we are doing better, and the results are also coming better. What more can I tell you?
Sir, I am probably one of the most bullish guys for this year and next year, if you see my reports. That is where I'm coming from. That is where I'm coming from, that the first quarter performance was lower than my expectation. Which is where I was trying to understand.
No, that was a little pandemic or other things might have infected, our strategy could have been, hedging could have been. There is a mix, a little volume is there, but this quarter, Q2 onwards will be better.
The spot LNG spread for Q2, Q3, Q4 is much better. Will that be one of the key factors which will help you do much better going forward?
Yes.
Lastly, basically in your numbers, if you see, you have a gas marketing number, one in standalone and one on consol, which in the last two quarters, the consol number is higher. Is that what you capture incrementally in conso? Is it your Singapore or other entity, marketing entities outside India?
Yeah. That consol includes that also.
That is the number one should look at?
Yeah.
Okay.
Thank you.
Thank you.
Thank you. The next question is from the line of Pinakin Parekh from JP Morgan. Please go ahead.
Yeah. Thank you. My first question is, can you give us a sense of what was the blended gas cost in the petchem business, and how it will trend over the next two to three quarters? We have a situation where spot LNG prices are surging and could even move higher, and crude is also surging. Just to understand the petchem business profitability.
See, with the current prices and with the portfolio we have, we'll optimize the profitability of petchem.
Sir, the profitability of petchem should stay at these levels or come up because gas prices are increasing and headline PE prices are flat. Volumes will increase, but will the profitability per ton improve?
We have a mixed portfolio of different gases, different portfolio of sourcing also. That way we'll optimize the sourcing of gas for the petrochemical.
Understood, sir. Fair enough.
Our profitability will be of the last year level or more better than that.
Understood, sir. My second question is.
With the prices trend as we have seen this INR 95,000 or so per metric ton, expected to go up.
Understood. My second question is basically on gas demand in India. After two to three years, spot gas prices are surging, and we are still not yet in the peak season of tightness. Food prices are high. A substantial part of India's gas demand is met via spot LNG imports. In that context, sir, should we see some kind of softness in India's overall gas demand? Related to that, sir, when you are talking about the fertilizer plants starting up, what is the gas source for the fertilizer plants? Will they be buying spot LNG, or have they already tied up for crude link contracts?
So far as the GAIL is concerned, we have long-term contracts. We will be giving the gases or the supplies to the fertilizer plants through our long-term contracts, which is already there as per the agreement. So far as the spot prices are concerned, the spot market is concerned, that we'll see wherever the optimization is there, wherever the requirement is there, we will do. We have substantial volume, which has been tied up on the long-term basis. We are not dependent on the spot market. Certainly, we take advantage of the spot prices, better spot prices, for optimization of the profitability or selling in the international market or whatever the situation comes.
Understood. Sir, overall, do you think that gas demand in India could be softer over the next couple of quarters, given where spot energy prices are?
Because these fertilizer plants are coming, CGDs are coming, naturally, the demand is there. Demand for the gas sector is going to increase. That is obvious.
Understood. Thank you very much, sir.
Thank you.
Thank you. The next question is from the line of Sabari Hajra from Emkay Global. Please go ahead.
Yeah, good afternoon, sir. Sir, basically, what we understand is that your U.S. LNG is actually a part of your portfolio, which is blended in to various kinds of gas, and it is sold in India based on certain formula, so under certain long-term contracts. This formula is largely oil-linked. In a way, the large portion of your marketing margin is dependent on the difference between oil-linked LNG and Henry Hub-linked LNG. Is that the right assessment?
No, not fully, because then we have also the portfolio which has contracted volume with the consumers also. That way it has also. It's not only the indexation difference between the Henry Hub and the Brent link. There are other factors also.
Okay. The formula, you are saying, will be different for different customers. You are saying it may not be like a vanilla indexation.
Yeah.
Is that right?
Yeah.
And-
We are optimizing in all the, wherever is there, we have margins, and then we tie up with that.
Right. Considering that Henry Hub prices have gone up significantly in the last three, four months, I think it is at $4.1, $4.2 now. Is it having any impact on your gas volumes in gas margins in particular because of this increase? Or you are still protected, depending on what kind of contracts you have?
Indexation difference is favorable to us.
You consider the current increase in global gas prices not to have any adverse impact on your gas marketing portfolio?
No.
Okay, sir. No, that's all. That's all from my side. Thank you.
Thank you.
Thank you. The next question is from the line of Varatharajan Sivasankaran from Antique Limited. Please go ahead.
Thank you for the opportunity. One on GAIL Gas, what you mentioned in terms of the number of CNG stations, can you repeat it, sir? What is the volumes you are doing currently?
GAIL Gas. You are talking about the GAIL Gas or our own CGD?
GAIL Gas as well as your CGDs, what is the number of stations you have currently, and what kind of volumes are you doing?
GAIL Gas volumes. Just one minute. You tell him. Just one minute. Yeah. In the GAIL Gas, we have more than 6 lakh 75,000 DPNG connections and 253 CNG stations. At present, we are having the total sale more than 5.5 MMSCMD . It is not only the CNG and PNG. There are other bulk customers also.
Thank you, sir. Your own CGD, you mentioned some numbers.
Yeah, please.
You have mentioned something about your own CGDs. 6 CGDs.
Six CGDs. Yeah, six CGDs. We have around 80 CNG stations, 1 lakh 36,000 DPNG connections. We have invested around INR 832 crores. Since some of the cities are to be connected through our grid, our JHBDPL grid, once that is connected, more and more volume will increase. It will take some time.
Yes. This 80 stations is what you mentioned, sir. 80?
80. CNG station.
Okay. Very nice, sir. My second question is on your LNG offtake contracts with various terminals, if you can share some details as to what is the existing contracts you have?
LNG contracts with the various suppliers, you want to say?
With terminals in India. Regas terminals in offtake arrangements.
Regas terminal.
Dahej has got 4.5, Kochi is 0.43, and we have one more agreement with Dhamra, and Dhamra is 1.5 MMTPA. Dabhol is going to be the 5 MMTPA terminal that is fully operated by us. Kattupalli is 2 MMTPA.
Very much. Thank you. Okay, thank you.
Thank you. The next question is from the line of Mayank Maheshwari from Morgan Stanley. Please go ahead.
Thank you for the call, sir. Just two questions from my end. One was in terms of your LPG volumes. They have recovered very well now. Is it fair to say that most of the gas supply issues of ONGC are largely behind us now?
Sir, over to you, and we have Mayank Maheshwari in the question queue from Morgan Stanley.
Should I just repeat my question?
Yeah. Please do.
Yeah. Sir, I was just checking on the LPG volumes. They have recovered very well for you this quarter. Are we kind of thinking that most of the issues that we had from supply from ONGC, that's largely behind us now?
Yeah. There's no such, you are talking about the LPG or what?
Yes. LPG, liquid, and hydrocarbon sales have kind of recovered very well in the first quarter.
Yeah. That is sorted out. Okay.
That should now kind of come up at the current run rates now going forward, correct?
Yeah. Almost there. Near to that.
Okay. The second question was more related to your cost on the petchem side because of the maintenance. Can you just kind of help us understand what would be the potential cost that you have booked in for this quarter on petchem?
Potential cost related to maintenance?
Yeah, any cost that you've booked in this quarter, which is extraordinary?
No. That is routine type of maintenance is there. Annual maintenance, always plant maintenance are there. That is always there.
No significant one-off cost.
Any major cost is not there. It is routine type of maintenance, oil and other things which are there, and many equipment are to be repaired, something like that is there.
Okay.
There is no major one-off.
Okay.
Mr. Maheshwari, you done with your question?
Yeah, I'm done.
Thank you, sir. The next question is from the line of Puneet from HSBC. Please go ahead.
Yeah, thanks for the opportunity. Sir, can you give some color on what is the status of the four fertilizer plants which are likely to commission and to draw cash from you?
So far as the four fertilizer plants are there, about the Ramagundam Fertilizer, which is already commissioned. HURL Gorakhpur plant is ready, and the volume is 1.87 MMSCMD, and they will take full volume by end of this year. HURL plant is ready. Pre-commissioning activity is under progress, and the volume is 1.87 MMSCMD. HURL Sindri, again, the plant is ready. They will take full by May 2022, and the pre-commissioning supply will come in this month only. These are the status of these four fertilizer plants.
Cumulatively, how much are they taking right now, and what will they take at peak?
Peak will be 10-12 MMSCMD. Gradually it will increase, but by May 2022, I think full volume will come.
Currently, how much should we add up to all these four?
Currently around 2.5.
Currently, taken together, 2.5. Around 2.5.
Okay. This is it. Thank you.
Yeah. My second question is, if you look at the total gas demand for the country, X of these new fertilizer plants and the new CGDs, do you foresee a risk of demand going down, or do you think the demand for gas will tell us that it's right to take additional gas even with higher prices?
Demand will be up. Certainly, 6%-8% or 8%-10% growth will be there, I expect, the coming CGDs which are there, with the coming fertilizer I have already told.
Yeah. Excluding these. Excluding the new sources of demand.
What you are telling is that because LNG prices have gone up, would the demand still grow?
Yeah. Are you seeing any discussion with your customers?
From the supply side, we've got different type of gases. Some of them are not LNG, and they are still at reasonable prices, and that is why Director Finance is telling that the demand will still grow.
Okay.
5%-7% is our estimate. The national figure, the macro level figure that we are talking about.
Understood. Okay. My last question is, if you can comment a bit on the other income. The other income was slightly softer. What elements were missing this time?
Interest income.
Other income comprised mainly of.
Vivad Se Vishwas provision .
In Q1?
Q1. Come Q1.
We have received the refund from our tax department.
In Q4.
In Q4, on account of our interest and other things. We have settled Vivad Se Vishwas . Therefore, in Q4, tax has come down.
Okay.
Yeah, even compared to Q1 FY 2021, it's lower.
Q1 FY 2021.
Yeah, it was INR 241 crore, now it's about INR 197 crores.
It was Q1 almost same, INR 212 crores versus INR 195 crores. Maybe INR 20 crores difference is there. Q1 FY 2021 versus Q1 FY 2021, not much of the difference is there.
Yeah, again, it's down compared to Q2, Q3, Q4. All three quarters were exceedingly good. From INR 720 crore.
We have received the dividend and other things also.
Okay. That didn't come through.
Dividend and the income tax refund.
These are there, yeah. Dividend as well as the refund from the income tax department. If you like, I will share the details also. There is no problem.
Understood. Thank you so much. All the best.
Thank you. The next question is from the line of Nafeesa Gupta from Bank of America. Please go ahead.
Good afternoon, sir. Sir, my question is on the LPG segment. We see substantially higher revenues than EBITDA. Is that only on account of higher LPG prices in this quarter despite lower sales, or is there anything else?
Prices are good. Hello?
Yes, sir.
Prices were better.
That is the only reason?
Prices were there, some volume also.
Sir, the volumes are down Q-over-Q.
Price. Only prices. For the LPG, prices have gone around 51%, if you compare with the Q1 FY 2021. Which was around INR 28,987, and INR 29,000. It has jumped to INR 43,000 or so. That has impacted.
Right. Sir, if my understanding is correct, for the LPG prices, we do maintain a lag of one month to the international prices, right?
Almost. Can you repeat? Almost?
Sir, for the LPG prices.
Yeah.
We maintain a lag of one month to the international prices.
No. It's a lag by one month as compared to the international prices.
Got it. Sir, could you, I mean, help us with the current transmission volumes in the pipelines? What would be the current rate if we compare with the Q1 levels?
Hundred and-
110.
The present gas transportation volume is about 115 million per day.
Around 115, yeah. 115.
Got it, sir. Thank you.
Thank you.
Thank you. The next question is from the line of Maulik Patel from Equirus Securities. Please go ahead.
Thanks for the opportunity, sir. Just one question. When is Dabhol getting completed for 5 million ton? What is the timeline there, sir?
Is December 2022. Next year we are planning, but I think December 2022, mechanically it will be completed, and we are expecting that March 2023, full operation will be there.
Okay. Sir, in Dhamra, you mentioned that you have booked what, one and half million tons, right?
Yes.
Okay. When is that is likely to be commissioned?
Next year, Q3.
That will be by September, December of 2022, right?
Yeah.
Thank you, sir.
Thank you very much.
Thank you. The next question is from the line of Yogesh Patil from Reliance Securities. Please go ahead.
Thanks for an opportunity, sir. Sir, I have a couple of questions. As we know, the Kochi-Mangalore Pipeline is commissioned and stabilized. How much volume we transmitted through this pipeline in this quarter, and how much ramp up do you expect in next one to two quarter?
For Kochi-Mangalore, I think around 2 MMSCMD, 3 million. 3 MMSCMD has been transmitted.
Okay, any outlook for next one to two quarters or one year?
We expect to maintain this or grow by about INR 0.5 million-INR 1 million in next two to three quarters.
Okay.
The other section, the section connecting Kerala to Bangalore through Tamil Nadu, that is under construction. That is the reason for this.
Okay, thanks. Second question is related to unified gas pipeline tariffs. Is there any development from the side of PNGRB, and have you heard anything, any updates from your side?
No. What was done, it is still with the PNGRB, and there is no movement for that.
Okay. The last question from my side, sir. Reliance is now producing close to 18 MMSCMD on a kind of a gas from KG Basin. How much gas is flowing through the GAIL pipeline? Can you give us a detail if you have? Sir, we are trying to figure out if Indian gas consumer switch from the costly LNG to a domestic growing cheap gas, then will you be able to maintain the same kind of a gas transmission volume or that share can be given to someone else like that? Just wanted to figure out how that 18 MMSCMD and how much share is flowing through your gas pipeline.
Thank you. Presently, 4.5 MMSCMD is flowing through our pipeline, of which about more than about 1.25 MMSCMD is our volume, remaining is shipper's volume.
Okay. Thanks a lot, sir.
Thank you. The next question is from the line of Vidyadhar Ginde from ICICI Securities. Please go ahead.
Yeah, thank you. In the last earnings call, you had mentioned that for FY 2023, 50% of your trading volumes were tied up, 30% was tied up, but the positions had been kept open, and 20% was not tied up. Is the situation still the same or it has changed?
For this financial year, we are fully tied up now.
Yeah, 2023, that is why I'm asking. Yeah.
For FY 2023, you are asking?
Yeah. You at last call said 60% tied up, 30% tied up.
Even for 2023, we have tied up all cargoes. I mean, they are allocated, which means.
Yeah, as of now.
We know where these cargoes will go, yeah.
Which was not the case when we did the last call. Is that correct?
Now, you yourself have told the market is looking up, so things have changed.
You have between the last call and this call, tied up the balance also.
Yes.
Okay. Thank you.
Thank you. Participants, to ask a question, you may please press star and one on your touchtone telephone.
Yeah.
We have the next question from the line of S. Ramesh from Nirmal Bang. Please go ahead.
Good evening, and thank you very much. We would like to get some update on the Konkan LNG in terms of any further investments required, and what is the kind of expectation on the revenue and profit after tax for this year on the current volumes, and what is the kind of growth you can expect in that business once it is fully operational, say, over the next two years?
Excuse me.
Can you repeat what is it about?
We could not get your question.
Yeah. basically, I'm asking you about the Konkan LNG investment you have. It's pretty much a subsidiary now for the Dabhol LNG terminal. last year you have turned the corner there and made a profit. what is the kind of outlook for the revenue and profit this year given the kind of pricing you're enjoying LNG? secondly, once the breakwater is commissioned and you are able to do the full volume, what is the kind of growth you can expect in the Konkan LNG business?
Yeah. For 5 MMTPA, this Dabhol terminal is there. 25%-30% is being utilized. Last year, we had done around 30 cargos, 32 cargos.
32.
32 cargos. When the breakwater will be operational as we are expecting December 2022 or maybe March 2023 also, total 80 cargos can come up. On an average, I can say around INR 2,400 crore of this revenue will be there.
No further investment required for funding the CapEx?
No, whatever is committed, that is there, INR 700 crores to INR 800 crores. That for breakwater only.
Okay. Secondly, what is your take on your propane dehydrogenation project for polypropylene? Where are you and what is the kind of timeline you're looking at right now in the investment?
This Usar plant
Yeah.
That around INR 9,800 crores or maybe INR 10,000 crores of the investment is there. We are expecting it will take 36 months, maybe three years from now, we can say.
In terms of the project timeline, where are you? Have you done the feasibility study? Are you going to appoint a
That is done. Licensor we have done. We are in the process of awarding major equipment, suppliers and everything, even the propane sourcing, is under process.
If I may ask a couple of questions there. One is on propane sourcing, what is the kind of contract or arrangement you have in terms of volumes and pricing? Secondly, who is the licensor for that process?
I think we'll give update when it is concluded. licensor.
Okay, sir. Thank you. I'm done.
U-A-U-W-I-C.
Thank you. The next question is from the line of Manikanta Garre from Axis Capital. Please go ahead.
Hi, sir. Good evening. Just a couple of questions from my side. The first one is, you said the fertilizer plants are currently taking 2.5 MMSCMD. When did this start, sir? Is it from the middle of Q1 or in Q2?
This 2.2-2.5 is the consumption of Ramagundam plant, which is online. 0.1 is the consumption of Gorakhpur. What Director Finance had informed is that Gorakhpur will go to full load, which is about 2.1-2.2 MMSCMD by December. Sindri and Barauni will go to full load by mid-next year, though their commissioning will start this month. That is what Director Finance had told. Matix is likely to start offtake by next month. They will start actually this month, but that will be commissioning period since it is already a plant which had run in the past. That is how we are expecting the full buildup of fertilizer volumes in coming months.
I understand, sir. What I'm asking is when is the first set of volumes started being taken by the Ramagundam plant actually in Q2?
Ramagundam plant started consumption in July 2020. That is the commissioning phase, and because of COVID, they had some labor problem and all that. Now they have come to full load. This is what I want to inform you.
I understand.
At Ramagundam.
March.
Now it is full load.
It is full load. They have commissioned, they have declared commercial operation in March, 23rd March, in fact. After that, they are now consuming more than 2 million cubic meter per day.
Right, sir. My last question is, when do we expect your next set of pipeline tariff revisions? I'm asking in the context of new public consultation documents being web-hosted by PNGRB. I understand that quorum is not there. If you can provide some guidance there.
Which pipeline you're talking about?
I think Dabhol-Bangalore and-
Tariff
Vijayawada Dabhol.
No. Dabhol Bangalore KKNPL tariff was revised sometime in 2018, 2019. In terms of tariff order, the tariff will again be revised in 2022 or 2023.
The new public consultation documents which are being web hosted now, we are expecting that to come up only in 2022?
I don't think any public consultation document has been web hosted.
They are not for GAIL tariff, GAIL pipeline tariff.
No pipeline tariff. There is no public consultation at present for any of the pipeline tariff.
No, you may be referring to the pipeline EOI that we have listing for Swan LNG connectivity to Dahej. That is one proposal being considered as of now.
Sure, sir. I'll check and come back. Thank you.
Thank you. The next question is from the line of S. Ramesh from Nirmal Bang. Please go ahead.
Thank you very much. In the GAIL Gas business, you reported a volume of 5.5 MMSCMD. When do you think these volumes will reflect in the margin and profit we see in other city gas companies like, say, Mahanagar Gas or Indraprastha Gas? What is the timeline and what is the kind of growth you expect in these volumes, say, over the next two to three years?
For GAIL Gas you are talking?
Yeah.
As number of PNG, CNG connections are there, number of GAs they have. We expect that around 10% growth will be there.
It's not reflecting in your profit numbers. The question I'm asking is, if you compare with other CNG companies, when do you think you'll be able to increase the margins and returns? Given the kind of scale you've already built up at 5 MMSCMD, do you think it will make a difference in terms of the profitability of the business over scale?
There are two types of sales they are doing. One is a bulk sale also. That is not for the CNG and PNG connections. Total volume of 5.5 MMSCMD is there. So far as the PNG and CNG connections are there, that is in the growing stage, and we expect that it will grow in the coming years.
Okay. Thank you very much.
Thank you.
Look for the generation-
Ladies and gentlemen, due to paucity of time, that was the last question. I now hand the conference over to the management for their closing comments. Over to you, sir.
Hello.
Yeah. Over to you for closing comments, sir.
Thank you very much. Thank you, and thank you, Nitin and team. I think we have tried to give all the answers which has been asked. I request if some of the questions might not have been answered, as well as some of the investors want more detailed answer of any of the queries which they have, they can contact me as well as my team, and we'll be happy to provide the answer to any of the queries which are there. Thank you once again. Thank you very much to the entire team. Thank you.
Thank you. Thank you, members of the management. Ladies and gentlemen, on behalf of Yes Securities, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.