State-run Gail (India) Ltd expects spot prices of liquefied natural gas (LNG) to remain firm over the next one-and-a-half years, a senior company executive said on Friday.
Prices are currently in the range of $20-24 per metric million British thermal unit (MMBtu) largely because of the prevailing geopolitical tensions caused by the Russia-Ukraine conflict, Manoj Jain, chairman and managing director of Gail said. “At least for one-and-a-half years, (LNG spot) prices (are likely) to remain firm,” Jain said.
Meanwhile, India’s largest gas distributor reported a 41% rise in net profit to ₹2,683 crore in the March quarter lifted by high gas prices and improved gas marketing spread.
The company had a net profit of ₹1,908 crore in the same period last year.
Revenue from operations for the quarter ended March surged 73% to ₹26,968 crore from ₹15,549 crore a year earlier.
For the financial year ended March, Gail recorded a 62% jump in revenue from operations to ₹91,646 crore. Its net profit more than doubled to ₹10,364 crore in FY22 from ₹4,890 crore in FY21.
The company attributed the robust growth in revenue to increased gas marketing and transmission volume, better gas marketing spread, and higher product prices.
High international oil and gas prices have boosted margins for energy companies.
Supply concerns following the outbreak of hostilities between Russia and Ukraine and the sanctions subsequently imposed on Russia have kept gas prices elevated.
The possibility of the European Union coming to a consensus on imposing an embargo on energy imports from Russia may further support the prevailing high prices.
Gail continues to scout for opportunities globally and would pursue projects abroad depending on the commercial viability, Jain said about the company’s international forays and prospects of taking over projects in Russia as several European companies are exiting the country following the Russian invasion of Ukraine.
Gail plans to monetize two of its pipelines with a total length of 2,100 km under the asset monetisation plan, Jain said.
The company plans to invest around ₹30,000 crore over the next three years in pipelines and city gas distribution plans.
The company also aims to partner with a manufacturing company to make electrolyzers to produce green hydrogen as part of its foray into the biofuels business, Jain said.
Gail is also tapping new gas sources to meet the emerging gas demand in the domestic market and to maintain its footprint in the international market.
Shares of Gail closed 5.43% lower at ₹142.80 on BSE, underperforming a 1.17% rise in the benchmark index.
