<div>This January, then Prime Minister Manmohan Singh inaugurated a 5 million tonne per annum (mtpa) terminal at Kochi by Petronet LNG, India’s largest liquefied natural gas (LNG) regasification company. For the company, the new terminal was a step closer to achieving its targeted capacity of 30 mtpa by 2020. <br /><br />In a business where demand is huge and rising but supply is limited, Petronet sources 7.5 mt of gas from RasGas in Qatar and another 2.5 mt annually from across the world. “In the long run, domestic gas will not be able to meet the continuously rising demand in India. Imported gas is the solution. That’s where our business model, which is based on regasification charges, comes in handy,” says A.K. Balyan, CEO and MD, Petronet LNG. Besides its own imports, Petronet is open to regasifying LNG imported by others. <br /><br />It’s no surprise the company has achieved an average four-year sales growth of 38.57 per cent. <br /><br />However, for its model to work best, Petronet needs a network of pipelines to supply gas to customers. Its 10 mtpa Dahej terminal in Gujarat is connected to five pipelines that move gas across north and west India. The Kochi terminal is currently linked by a 44-km pipeline to Cochin Refinery. In the second phase, two pipelines are planned for Kochi— Tamil Nadu to Bangalore and from Kerala to Mangalore. Petronet is also working to set up another 5 mtpa terminal on the east coast at Gangavaram in Andhra Pradesh.“We need to multiply the length of pipelines so that the current grid in north-west India is connected to the southern grid.”<br /><br />Petronet, which sources the bulk of LNG from Qatar, is looking to diversify its gas imports as more and more gas assets start production. For that, the government needs to first finalise the price of domestic gas. Once that happens, things should become clearer for Petronet.<br /><br />The company has already found buyers for its Kochi terminal for the next 20 years. Besides, a combination of low domestic natural gas output and ever-increasing demand from companies helped Petronet LNG maintain an over 100 per cent utilisation of its Dahej terminal. That’s huge considering LNG regasification plants the world over work at 50-55 per cent of their capacity. <br /><br />(This story was published in BW | Businessworld Issue Dated 11-08-2014) </div>
