Petronet plans Rs.12,685cr propane dehydrogenation plant
Petronet LNG Ltd is making a hefty Rs.40,000 crore investments on expanding LNG import capacity and setting up processing plants for petrochemicals with a target to treble net profit by 2028, its CEO A K Singh said at the Indian Energy Week in Goa.
Petronet has also executed an LNG Sale & Purchase Agreement (LNG SPA) for purchase of around 7.5 MMTPA LNG with QatarEnergy on long-term basis on 6 Feb.
This is pursuant to extension of an existing LNG SPA for LNG supply of around 7.5 MMTPA LNG Sale & Purchase Agreement on FOB basis, signed on 31 July 1999 for supplies till 2028. Under the new agreement, LNG supplies will be made on delivered basis commencing from 2028 till 2048.
Elaborating on ambitious plans, Singh said Petronet is investing Rs.12,685 crore on a propane dehydrogenation plant that will convert imported feedstock into propylene, as well as setting up a Rs.2,300 crore LNG import facility at Gopalpur in Odisha.
Petronet is also looking at setting up a 4 million tonne-a-year LNG import terminal at Gopalpur port. The land-based terminal replaces an earlier plan for a floating storage & regasification (FSRU) terminal.
Petronet now sees gas demand in the eastern region with a facility at Gopalpur, reviving an earlier plan of an LNG terminal at Gangavaram in Andhra Pradesh, which was suspended due to weak regional demand in 2015-16.
The group is also looking at investing in overseas projects such as a floating LNG terminal at Colombo in five years and start shipping LNG in containers to Sri Lanka in the next 18 months.
Singh said Petronet will invest Rs.600 crore in raising the capacity of the Dahej LNG import terminal to 22.5 million tonne, and Rs 1,245 crore in building an additional storage tank and bays for truck loading of LNG.
The Dahej import terminal is the largest in the world and the port will host a third jetty where propane, ethane and LNG can be imported, he said.
Petrochemicals, made using crude and natural gas as feedstock, form raw materials for plastics, packaging materials, and personal care products – demand for which is soaring in India.
India’s domestic natural gas production barely meets half the demand of the power, fertilizer and CNG sectors and the rest is LNG imported.
“We have charted a strategy increasing turnover to Rs.1 lakh crore in 5 years with a net profit of Rs.10,000 crore from investing Rs.40,000 crore in expansions,” he said at India’s mega energy event held 6-9 Feb.
The strategy started two years back and is for the period up to 2027-28.
Petronet operates a 17.5 million tonnes-a-year flagship import terminal at Dahej in Gujarat and another 5 million tonnes facility at Kochi, Kerala.
The company of Indian energy heavyweights currently has a turnover of Rs.55,000-Rs.60,000 crore and an annual net profit of Rs3,200 crore.
Petronet is 50 per cent owned by state-owned refiners Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL), gas utility GAIL (India) Ltd and oil and gas producer ONGC. Fiinews.com
