<div>Petronet LNG aims to lease out about two-thirds of the capacity at its Dahej import terminal in Gujarat over the next four years to boost revenue and prevent the facility falling into disuse.</div><div> </div><div>The company, which handles large volumes of liquefied natural gas (LNG) imported from Qatar for Indian companies, wants to lease space to other firms as domestic demand for its costly Qatari cargoes recedes.</div><div> </div><div>In April-June, Petronet operated its 10 million tonnes per annum (mtpa) Dahej terminal at 98.4 percent capacity despite lower demand for its oil-indexed, costly LNG sourced under a 25-year deal with Qatar's RasGas.</div><div> </div><div>Spot prices of LNG have collapsed by more than 60 percent over the past year, whereas oil-indexed LNG prices have remained more steady, reducing appetite for the expensive supply.</div><div> </div><div>Currently it buys 7.5 mtpa of LNG from RasGas under the long-term deal, and has leased 1.25 mtpa of capacity to state-run GSPC Group in Gujarat.</div><div> </div><div>It has also signed deals to lease out 6 mtpa of capacity to state-run firms by 2017, when the capacity of the plant will be raised to 15 mtpa.</div><div> </div><div>Petronet LNG is in talks with various companies to lease out 2.5 mtpa of capacity to be added in the next phase by 2019, its technical director Rajender Singh said, which if worked out will be about 63 percent of the expanded capacity.</div><div> </div><div>"Our risk is reduced through leasing ... we will get revenue through regasification charges and that's our strength," Singh said.</div><div> </div><div>Due to cheaper prices of Asian spot LNG, Petronet has been forced to import 68 percent less fuel than it is supposed to under the long-term deal with Qatar.</div><div> </div><div>Pricing of LNG under the long-term deal is linked to the 12-month rolling average of the Japan Crude Cocktail (JCC) price.</div><div> </div><div>While this formula reduces volatility, it does not reflect price falls as much as spot pricing.</div><div> </div><div>Petronet's head of finance, R.K. Garg, said the trend of lower offtake of gas under the long-term deal was continuing.</div><div> </div><div>Reuters on Thursday reported that Petronet has been forced to cut purchases under the long-term Qatar deal by 30 percent due to low domestic demand.</div><div> </div><div>Higher imports of spot cargoes helped Petronet improve operations at its Dahej plant, Garg said.</div><div> </div><div>(Reuters)</div>
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