Page 8 - AsianOil Week 06

AsianOil SOUTH ASIA AsianOil
GAIL’s quarterly profit jumps 18%
PERFORMANCE
STATE-RUN natural gas utility GAIL (India) has posted an 18% quarter-on-quarter increase in its net profit for the October-De- cember period.
The company said improved margins at its gas marketing and liquid hydrocarbons divi- sions had delivered the improved figure of INR12.51bn ($175.5mn). Revenue was down marginally at INR177.35bn ($2.49bn) compared with INR180.1bn ($2.53bn) in the preceding quarter.
The company said growth in its gas transmis- sion and trading, liquid petroleum gas (LPG) transmission and liquid hydrocarbons divisions had help to offset a decline in petrochemical and gas prices. The company owns and operates more than 70% of the country’s 16,981-km pipe- line network.
For the first nine-months of financial year 2019-2020, the company’s revenue declined slightly to INR540.21bn ($7.58bn) from INR561.01bn ($7.87bn) in the year earlier period.
Net profit slipped 27% to INR36.02bn ($505.2mn) compared with INR49.03 ($687.7mn) in the same period of 2018-2019. The company attributed the decline to a 22% reduction in petrochemical prices and a 17% slide in liquid hydrocarbon prices.
Commenting on the company’s performance, chairman and managing director Ashutosh Kar- natak said profits had grown in the third quarter
because of improved operational efficiencies, coupled with it managing to raise capacity utili- sation at its Pata petrochemical complex in Uttar Pradesh beyond 100%.
Financial daily Business Standard quoted KRChoksey Shares and Securities as saying: “We expect volumes from both transmission and trading to pick up from increasing pipeline connectivity along with commencement of fer- tilizers plants on the Jagdishpur-Haldia-Boka- ro-Dhamra (JHBD) pipeline. However, revision in tariffs by the Petroleum and Natural Gas Reg- ulatory Board (PNGRB) for pipelines including Hazira-Vijaypur-Jagdishpur (HVJ) could dent margins to an extent. Earnings from LPG/LHC are likely improving from recovery in the LPG prices.”
HDFC Securities said: “We remain construc- tive on GAIL as the risk/reward is favourable. India will derive higher benefit from the low LNG prices as the domestic natural gas ecosys- tem develops. New US liquefaction terminals will boost LNG exports and also keep Henry Hub (HH) prices subdued, enabling GAIL to swap cargoes. Thus US LNG is not a concern.”
Reuters cited unnamed sources on February 11 as saying that GAIL had issued a swap ten- der offering two LNG cargoes for loading from Dominion Energy’s Cove Point terminal in the US and seeking a single cargo for delivery to India. The sources said the tender would close on February 12.™
ONGC to invest $11bn in Andhra Pradesh’s upstream
FINANCE & INVESTMENT
INDIA’S state-run Oil and Natural Gas Corp. (ONGC) is preparing to invest INR780bn ($10.95bn) in upstream projects in Andhra Pradesh State.
The investment includes INR680bn ($9.55bn) dedicated toward offshore projects with another INR100bn ($1.4bn) earmarked for onshore devel- opments, senior government and company offi- cials told Indian Vice-President M Venkaiah Naidu during an investment briefing on February 11.
Minister of Petroleum and Natural Gas Dhar- mendra Pradhan, who was also in attendance, tweeted after the meeting that the projects would usher in a “new dawn of socio-economic pros- perity” for the state and said that they would be fast-tracked to completion.
While details of the projects were not revealed, the state major’s biggest offshore project
lies in the state’s deep waters – KG-DWN-98/2 (KG-D5). The company is developing a cluster of oil and gas discoveries there at a cost of more than $5bn.
In addition to the briefing to Naidu on the company’s upstream investment plans for the state, company executives outlined ONGC sub- sidiary Hindustan Petroleum Corporation Ltd’s (HPCL) plans to develop a INR320bn ($4.49bn) petrochemical plant in the state. HPCL is part- nering with GAIL (India) and local government to develop the 1.7mn tonne per year (tpy) green- field complex at Kakinada.
While the central government has thrown its support behind the petrochemical project, com- pany officials said New Delhi was still waiting for Andhra Pradesh authorities to submit their financing plans.
P8
w w w. N E W S B A S E . c o m Week 06 12•February•2020