LNG

India’s Reliance Industries, the group with growing natural gas and oil and chemicals businesses, reported increased overall fiscal first-quarter revenues while net income slipped amid moves to boost the nation’s domestic output with more exploration and production to offset LNG and oil imports.

LNG importer India said plans were advancing for more exploration and production of domestic energy resources as the nation was preparing to launch a 10th bidding round for oil and gas blocks in August or September.

Indian liquefied natural gas imports increased by 15 percent for the first 10 months of the fiscal year so far and  by 26 percent in January as an additional terminal was available and as prices declined by 27 percent since last year while demand continued to grow.

Indian liquefied natural gas imports surged for another month by just over 12 percent and by more than 14 percent for the fiscal year so far, helped by lower prices and higher demand and despite more competition from increased output from Bay of Bengal domestic gas resources.

GAIL (India) Ltd, the shareholder in Petronet LNG and the operator of the Dabhol import terminal in the West Coast state of Maharashtra, signed a long-term supply deal with global commodities firm Vitol.

Petronet LNG, the owner of the largest Indian import terminal at Dahej in the West Coast state of Gujarat and a smaller facility at Kochi in the southwest state of Kerala, reported 10 percent higher fiscal second-quarter net profits, though revenues dropped by over 22 percent from the same quarter last year because of much lower prices.

The company reported consolidated net profits of 818.10 crore Indian rupees ($98.24 million) for the second quarter of the fiscal year compared with 744.25 crore rupees ($89.37M) in the second quarter of 2022 and 789.85 crore rupees ($94.85M) in the previous 2023 quarter to the end of June.

The company’s consolidated revenues from operations were much lower this year than last because of higher prices that prevailed in 2022.

The fiscal second-quarter revenues dropped by over 22 percent to 12,532.57 crore rupees ($1.30 billion) from 16,079.97 crore rupees ($1.93Bln) reported in the same quarter of last year.

However, the fiscal second-quarter income was higher than the 11,656.38 crore rupees ($1.39Bln) logged in the April-June quarter of 2023.

Dahej efficiency

“The robust financial performance of the current quarter and half year was achieved due to efficiency in operations and higher capacity utilization of the Dahej Terminal, that remained consistently above 90 percent in the current quarter and half year, taking a huge leap from the utilization level in fiscal 2022-23 that was below 80 percent,” Petronet explained.

The Petronet board of directors also approved investment of around 20,685 crore rupees ($2.48Bln) for the development of a petrochemicals project including a propane and ethane handling facility near the Dahej terminal site, located north of Mumbai.

Earnings per share increased to 5.45 rupees ($0.065) versus 4.96 rupees in the prior-year quarter.

The earnings statement showed that during the quarter to the end of September 2023, the Dahej terminal processed 210 trillion British thermal units (TBTU) of LNG compared with 182 TBTU during the corresponding quarter of 2022 and 217 TBTU during the previous quarter from April-to-June 2023.

Overall LNG volumes processed by the company during the three months, including the Kochi terminal, came to 223 TBTU, as against the LNG volume processed in the corresponding and previous quarters, which stood at 192 TBTU and 230 TBTU respectively.

The company receives about 8.5 million tonnes per annum under three principal long-term supply contracts, two with Qatar and one with the Chevron-operated Gorgon LNG plant in Western Australia.

Petronet is also planning a third import facility and its first on the East Coast at the Port of Gopalpur in the state of Odisha.

Petronet was formed by the Government of India in 1998 specifically to import LNG.

Shareholders in Petronet, which began operations in 2004, include the other big Indian energy players, GAIL India, Indian Oil, Bharat Petroleum Corp. and Oil and Natural Gas Corp.

Indian liquefied natural gas imports rebounded by 6.5 percent and offset a monthly decline in domestic gas production at a time when gas demand is rising and prices steadily falling from last year’s record levels.

Petronet LNG, the owner of the largest Indian import terminal at Dahej north of Mumbai, reported a record 39 percent surge in fiscal-year revenues, though posted a decline in net profits as regasification volumes rose during the fiscal fourth quarter compared with the previous three months while falling on an annual basis.

LNG importer India is expected to encourage increased domestic natural gas demand in the months ahead after the Government introduced a gas prices cap for two years to help boost the economy in sectors such as the fertilizer industry, refining and petrochemicals.

Swan Energy Ltd, part of the Indian conglomerate the Swan Group with interests in oil and gas, textiles and infrastructure has given details of its lease-out deal to Turkey’s state-owned Petroleum Pipeline Corp. (BOTAS) of a floating storage and regasification unit.

The charter for the “Vasant 1” floating storage and regasification unit (FSRU), which is controlled by Japan’s Mitsui OSK Lines, is held by Swan Energy subsidiary Triumph Offshore Private Limited (TOPL) and has now moved to Saros Bay offshore northern Turkey.

The FSRU “Vasant 1” has capacity of 180,000 cubic metres and was completed by Hyundai Heavy Industries of South Korea at the end of 2020 for Swan‘s planned LNG import terminal at Jafrabad in India’s Gujarat state.

Swan was the lead promoter of the delayed Jafrabad LNG import terminal with a 63 percent equity stake.

The other shareholders are the Government of Gujarat with a 26 percent interest and the remaining 11 percent is owned by FSRU Venture India One Ltd, the Indian subsidiary of Japanese shipping line Mitsui OSK Lines.

MOL acted as technical partner for the Jafrabad project by supervising the construction of the FSRU.

Charter rates

“The lease arrangement is generating daily rental of $250,000, or about 2 crore Indian rupees (as per the present exchange rate), for Swan Energy,” said the Indian firm of the BOTAS deal.

“The duration of the lease agreement is for 12 months and is extendable on this basis of mutual agreement,” Swan added.

Based on the bare boat charter, TOPL has leased out only the bare FSRU vessel to BOTAS and BOTAS will manage the operational expenses including fuel, crew, insurance, maintenance, and repair.

“As a result, TOPL does not incur any operational expenses during the lease tenure,” Swan said.

BOTAS also runs the Marmara Eregesli LNG import terminal and cargoes have been received there since 1994, first from Algeria and later from countries like Qatar and Nigeria and then over the last five years from the US as well.

Commenting on the lease arrangement with BOTAS, Rishi Chopra, an executive of Swan, said the lease agreement based on bare-boat charter would enhance the rental earning capabilities of the FSRU.

“The net revenue from the annual rental will strengthen the profitability position of the company,” explained Chopra.

“By renting out the FSRU to BOTAS, we aim to play an enabling role to boost the LNG initiatives of the Turkish government to build clean energy preparedness amid a growing demand for FSRUs in that market,” he added.