Petronet LNG plans to raise Rs 600 crore via non-convertible debentures

Petronet LNG Ltd, India's biggest liquefied natural gas importer, plans to raise Rs 600 crore in debt to fund expansion of its Dahej LNG terminal in Gujarat.

"We will raise Rs 600 crore through non-convertible debenture (NCD) to fund the capex towards construction of a second jetty and additional storage/regasification facilities at the Dahej terminal," Petronet director of finance, R K Garg, told PTI here.

Petronet plans to raise capacity of its Dahej import terminal to 15 million tonnes by putting up additional storage and regasification facility and a third jetty by next year.

The company has leased out most of the new capacity being built to state-owned GAIL India Ltd and Gujarat State Petroleum Corp (GSPC) on 'use-or-pay' basis.

"We have entered into long-term tolling arrangements for 2.5 million tonnes of capacity with GAIL and 2.25 million tonnes with GSPC," he said.

As per this arrangement, Petronet would provide GAIL and GSPC facilities for receipt, storage and re-gasification of LNG for contracted quantities without assuming responsibility for gas procurement.

The firm would receive long-term advances under these tolling arrangements, which would help partly fund the equity part of the capex.

These contracts, along with its existing long-term sale and purchase agreements with LNG suppliers and customers, would provide stable cash flows over the contractual period and insulate the company from volatility in LNG prices or demand.

Petronet has a 7.5 million tonnes per annum supply contract for LNG with RasGas of Qatar for its Dahej terminal and a 1.44 million tonnes supply contract with Australia's Gorgon project for its completed, and soon to be commissioned 5 million tonnes Kochi terminal.

Besides dahej terminal expansion, Petronet is also setting up a new 5 million tonnes terminal at Gangavaram in Andhra Pradesh.