Petronet LNG is in focus today after CLSA opted the stock of the company as one of its top midcap pick on expectations of its profit trebling in next four years due to rise in gas imports in FY15. The stock of the company is currently trading at around Rs 136. Speaking to CNBC-TV18, RK Garg, director finance, Petronet LNG says the demand for natural gas will continue rising in India and the company therefore will continue importing more LNG in future given India is short of natural gas, which is imported in country via LNG route. Meanwhile, Garg expects LNG prices to drop to USD 15/mmbtu in near-term from the current USD 17-18/mmbtu. Below is the verbatim transcript of RK Garg’s interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18 Sonia: By how much could rising gas imports actually benefit a company like Petronet LNG? Through the course of the next couple of years or even in FY15, what could the trajectory look like both for revenues and profits? A: India is short of natural gas and we are importing natural gas in the country through LNG route. We believe that demand of natural gas would continue to rise and we will continue to import more and more LNG in future. Based on that as Petronet LNG, we have one operating terminal of 10 million tonnes and are operating close to that level. However, there have been some issues with respect to our newly built Kochi terminal which was commissioned a few months back because of its connectivity with the pipeline which has been delayed. However, Dahej is operating well and we are looking for more LNG to come from Dahej terminal, which we are expanding to 15 million tonnes and going forward we would seek more and more LNG in future at our terminals. Sonia: When will this entire 15 million tonne be operational? A: Around 15 million tonnes is likely to be fully operational by November 2016, all contracts have been awarded, contractors are mobilising the site, all approvals are in place and the commercial structure is also in place. Latha: When do you expect the restart of Kochi? A: Kochi currently is operating, but at very low capacity because it is only connected with a small section of pipeline where there are only few customers and the other major pipeline which is going upto Mangalore and Bangalore, has issues that have been raised with respect to its ROUs. When these pipelines get connected, we expect Kochi output to increase. Sonia: In the last quarter, higher LNG prices affected demand quite a bit, there was lower utilisation at the Dahej terminal, what can we see in the next couple of quarters? A: Severe winter this year has led to an increase in the LNG prices all around especially severe winter in east of Asia as well as in Europe and US. The prices have reached to a level which is beyond the oil parity and has affected the import of LNG. Sonia: What is the spot LNG price currently? How much have they gone up in the last couple of months and by how much do you expect it to go up further? A: In India the import prices have reached to USD 17-18/mmbtu but now we are seeing a downward trend and during this supply would be coming in April and May, we expect the prices will be in the range of around USD 14-15. Petronet LNG stock price On March 21, 2014, Petronet LNG closed at Rs 134.05, up Rs 0.50, or 0.37 percent. The 52-week high of the share was Rs 146.00 and the 52-week low was Rs 102.50. The company’s trailing 12-month (TTM) EPS was at Rs 10.50 per share as per the quarter ended December 2013. The stock’s price-to-earnings (P/E) ratio was 12.77. The latest book value of the company is Rs 59.33 per share. At current value, the price-to-book value of the company is 2.26.

Source: http://www.moneycontrol.com/news/business/demand-for-natural-gas-will-continue-to-rise-petronet-lng_1056041.html