Good day and welcome to the Petronet LNG Limited Q2 FY2022 earnings conference call hosted by Yes Securities. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Nitin Tiwari from Yes Securities. Thank you, and over to you, sir. Thank you, Parizan. Good day, ladies and gentlemen. On behalf of YES Securities, I welcome everyone to Petronet LNG's second quarter earnings call. From Petronet LNG, we have the pleasure of having with us today: Sri V.K. Mishra, Director of Finance, Sri Rakesh Chhabra, CGM and President of Finance, Sri G.K. Sharma, CGM Marketing, Sri Jayaprakash Saraswat, GM Finance, Sri Vivek Mittal, GM Marketing, and Sri Ashwani Agarwal, Manager of Finance. I will now hand over the floor to Petronet LNG's management for their opening remarks, which shall be followed by a Q&A session. Over to you, sir. Good afternoon. I am V.K. Mishra, Director of Finance. Basically, during the quarter ended 30th September 2021, the Dahej Terminal has processed almost 225 TBTUs as against 194 TBTUs in the previous quarter and 243 TBTUs in the corresponding quarter. The overall performance has been 240 TBTUs, including the Dahej and Kochi Terminals, as against 209 in the previous quarter and 254 in the corresponding quarter. As far as the first half is concerned, if you look at the performance, it has been very good. We have been able to process 449 TBTUs in both the plants as against 444 TBTUs in the previous year's first half. This is how we have performed volume-wise. If you look at the financial performance, TBTU has been INR 1,105 crores as against INR 851 crores in the previous quarter and INR 1,243 crores in the corresponding quarter. PAT has been INR 823 crores in the current quarter as against INR 636 crores in the previous quarter and INR 927 crores in the corresponding quarter. If you look at the half-yearly financial performance also, so this first half, TBTU has been INR 1,957 crores as against INR 1,939 crores in the corresponding first half of previous year. PAT has been INR 1,459 crores in the current first half, and last year, it has been INR 1,448 crores. This is how we have performed. Apart from that, the board of directors has also declared a special interim dividend of INR 7 per share. If you look at the performance-wise, the profit for the first half, TBTU, has been highest ever in the current half as compared to H1 of 2021-2022. The growth in volume in the current quarter over the previous quarter is 15%. The TBTU in the current quarter over the previous quarter has been higher by 30% and PAT by 39%. This is all financial and physical highlights. Now, the floor is open for the questions? Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Reminder to the participants: anyone who wishes to ask a question may press star and one at this time. The first question is from the line of Probal Sen from Centrum Broking. Please go ahead. Thank you for the opportunity, sir. I have two questions. One was, given the kind of price movement one has seen in October and persisting in November, any outlook you can give for H2 volume outlook or capacity utilization? I understand that you have firm contracts for about a majority of the capacity. But do you see a situation where, at least for the third-party regas contracts, some of the off-takers might defer the volumes to the extent allowed by their take-or-pay limits, at least to the next financial year? That was my first question. Right. So the first question you have raised is regarding the market scenario where prices are exorbitantly high. Absolutely correct. I fully agree with you. This has, in fact, discouraged the people to bring export cargoes to India. But at the same time, if you look at our performance, we have been able to perform almost 99% at Dahej. So if you compare with the previous quarter, it was only 86% capacity utilization. Of course, it is less than the corresponding quarter, no doubt. But still, we are able to exhibit our performance on the strength of the long-term contract we are having. And perhaps that is a major reason that we are able to do this kind of performance in this quarter. But if you look at the future outlook, it's definitely not very good in the sense that prices are still very high. The winter has already set in. Now, perhaps demand will further increase in Europe, Japan, and China. They are also just trying to store their inventory, taking more cargoes. They are taking it for winter. After the winter season, I hope that price will further come down. It's not the normal level. It's a very unsustainable price because, at this price, LNG consumption cannot be enhanced. This is one of the factors, I think, which is more optimistic for me, is that it is not going to stay for a long time because this price is not sustainable. At least in India, then people will prefer to go for alternate fuels in place of LNG if this price scenario will continue. Perhaps the only solace we have is the long-term contract India has. So that part is good that that gas is costing at around $10-$10.50 per MMBTU. So that is a good part that we are not impacted by these export prices. But it is also true that more cargoes, which could have come, had the price been in the range of $5-$6, $8-$9, $10. Perhaps more cargoes would have come to India. But that is not possible. Only a very minimal number of cargoes are coming as far as export cargoes are concerned. But long-term contracts are definitely a great rescue, you can say, in this scenario. So I think it's a matter of this winter season only that it will continue. But after that, prices will definitely be tepid, and it will come down. And perhaps then, we can say that the market will be normalized. Because what I foresee is that there is plenty of LNG available in the market. But the only thing, there are certain factors which have contributed to this kind of price rise. So one of the factors is very clear that European countries have not been able to store more inventory for the winter season. And perhaps China and Japan are also trying to store more LNG for the winter season for heating purposes. So that is one of the factors. And another factor is the restrictive supply from Russia to the European region. So that is forcing the European nations to bring LNG in place of piped natural gas, which they were getting from Russia. So these are some of the factors which have contributed to this kind of price rise. But we hope that this all will normalize after the winter season. Perhaps then, price will be more stable in the range of maybe $6-$10. So then we will have more export cargoes in India. Broadly, if I can try and sum up my understanding, basically, we are looking at a slightly tougher Q3 given the winter season and the constraints. But hopefully, by the second half of Q4, things should start to look up. Is there a fair way to look at it? I think we will try to do our level best. We are trying to adopt all kinds of strategies to just enhance the profitability. And perhaps because of a very significant rise in this LNG price, if you look at it, this was never anticipated. We have always witnessed the price rise up to, say, $18-$20 in the last five to 10 years. But it was never even imagined that this kind of price rise, which will go up to $56 per MMBTU. And now, even today, it is around $28-$30 if you look at the West India market and JKM. So this is the kind of price which is not sustainable. If you look at the flow with this kind of crude, which normally gas is based on, you'll find that the $30 means that almost if $80 is the crude price, then it is almost, I think, 40%-45% of the slope, which is very high. Normally, the slope remains in the range of $10-$14. But if you look at the rise in the LNG prices, it's disproportionate as compared to the rise in crude prices. Absolutely. This is causing a major concern because the slope is going to 40%. Then it's better that others will switch over to different fuels. So this is why I am saying that this is not sustainable price. Normally, it should be priced less than 18% of the slope whenever you compare with crude. And it should be in that range only, not more than that. But it is going up to 40% of the current crude oil prices. So that's what is more worrying. But as I have already indicated, there are certain reasons, geopolitical issues, which are causing this kind of price rise in LNG prices. So I think this will be stabilized by the end of March. So by that time, I think we should hope that it will be more stable, and it will be affordable for India. Right, sir. Got it, sir. That's very helpful. And the second question I had was with respect to the CapEx plans. Obviously, for the last few quarters, you have been highlighting a couple of things: the Dahej expansion that is there on track, the LNG retail plants, as well as some of the other plants. So if you can just give us a small update, whatever you can share on the capital allocation plans for the next couple of years, sir. Right, right. So basically, first of all, I would like to inform you that we have already placed an order for construction of two LNG tanks at the Dahej. And the kickoff meeting has also been concluded. And now, it is almost about to start project work. So this INR 1,200 crore CapEx will be there. And perhaps the time period for completion of these tanks is 40 months from now. And another project which is coming up very quickly is the construction of jetty, whereby we expect total CapEx of around INR 1,700 crores. And that is also underway. It is in the process of approval. We have already got the consultant to just estimate the cost of that jetty. And we will be going very shortly to the board for approval. So these are two projects which are being expedited. Perhaps thereafter, we have plans to expand our Dahej terminal from 17.5-20 MMTPA. And the phase II from 20-22.5 MMTPA. The phase I will be costing very less because it will be only requiring some de-bottlenecking. And perhaps we'll be able to get 2.5 MMTPA additional by spending hardly INR 200-250 crore. And thereafter, if you look at the second expansion plan, that will be costing us around INR 700-800 crore. So that is how we are planning to do. And perhaps these all two expansions will be taking almost a three-year period from now. So these are the Dahej expansion plans. And then, if you look at our other projects, one, we have a very ambitious project at the East Coast terminal. So that part is also taking place. We are in ddiscussion with the authorities. Perhaps that is an ambitious plan that we want to have one terminal, initially a FSRU-based terminal of 3-4 MMTPA. Its CapEx will be almost INR 1,500 crore-INR 2,000 crore in between. I think INR 1,900 crore is the total CapEx on that. This is how we are doing for this terminal. Apart from that, we are also having a certain plan to have some LNG stations in association with various off-takers, which means ONGC as well as CGD companies. We plan to have that. Perhaps we have already placed an order for five LNG stations, which we are putting up with IOCL ONGC, one of the ONGC. More will come in the future. But it will be in phase-wise. It will be in phased manner. Perhaps it will not come in a single day. Of course, we have planned to have more stations. Perhaps it may go up to maybe 100, 200 also. It will be only in a phased manner as per the requirement and availability of the opportunity on the highways. This is how we are planning in that particular section. One LNG station costs us around INR 8 crores-INR 10 crores. It's not a very high-intensive capital expenditure project. Of course, it will come in a phased manner. Slowly, slowly, we'll be moving in this direction. This is how we are going in LNG stations plan. Apart from that, in the future, we have planned that Kochi terminal utilization should also increase. So perhaps for that, we are asking GAIL to expedite their pipeline up to Bangalore so that we can perhaps supply more gas and utilize our plant in a better manner, which is being utilized at present at 22% capacity. And perhaps we hope that it should reach to 30%-35% very shortly. But the only problem has been the prices of gas. So people are a little bit hesitant to take gas at this price, which is currently going in the spot market. So that's why capacity is a little bit at 22%. But of course, as the prices will be stabilizing in the future, perhaps this will go up to 30%-35% of the capacity utilization. So this is how our CapEx plan is there. Great, sir. Thank you so much for giving such a detailed answer. This is extremely useful. I'll come back if I have more questions. Thank you so much. Have a nice day. Thank you. The next question is from the line of Pinakin Parekh from JP Morgan. Please go ahead. Thank you very much, sir. Sir, I have two questions. First is just to probe more on the demand outlook, and especially just on Q3 and Q4 basis. Historically, 2Q seasonally is a strong volume quarter. In the second half, volumes fall from the 2Q level. So do you expect a similar trend in the second half that we see volumes falling sharply from 240 TBTUs? Or in your view, this is at least the base-level volume that Petronet should be able to do in the December and March quarters? See, it's like I have already told you that export cargoes will be very little. But one light of hope is there that we have requested RasGas to deliver us 46 cargoes additionally. But let us see what happens in that case. We will request RasGas to enhance the supply under long-term contract if possible so that we can have more cargoes under long-term contract. Sure, sir. So just to probe that further, is there any progress from RasGas in terms of them delivering those volumes, especially the deferred volumes of the previous years? Do you expect them to have committed to delivering in this financial year? It's not possible. I think marketing, Mr. Vivek, is there. He will explain it. Good afternoon, everyone. Vivek, please. So as Sir mentioned, we are in discussion with Petronet. But at this point of time, speaking contract sensitively, we will not be able to diverge too much. Let's see how the discussions progress. And also, one must acknowledge that given the Q2, which was from July to September, the whole terminal was closed. So that's the reason typically, every year, Q2 is higher compared to the rest of the quarter. So this may not be the case going forward. But in terms of capacity holders also, many of our capacity holders like GAIL and some quantity IOCL and GSPC have their long-term contracts. These volumes continue to flow in under the regas contracts. And of course, there are certain flexibilities in the regas contracts. So which, of course, if anybody is wishing to avail it, they can avail it. So we will remain within the contractual boundaries. Sir, lastly, just to understand, how much of your volumes the flexibility was availed in the September quarter, basically where they don't have to take or pay, and that can be deferred? What percentage of your contracts was the customers availed that in the September quarter? It's not quarter-over-quarter. It's an annual basis. So at the end of the year only, we will be able to give you those numbers. Understood. Thank you very much. Thank you. The next question is from the line of S. Ramesh from Nirmal Bang. Please go ahead. Hello. Can you hear me? Yes, sir. We can hear you. Yeah. Good afternoon. Thank you very much. So you have given some details on the spot cargoes you're handling, Dahej. That's six cargoes. So can you share with us what is the average price of the spot cargoes and which are the ONGC segments which use this spot cargo? Just see, couldn't understand what you are talking. 6 cargoes is what? You have handled six TBTUs of spot cargoes in Dahej, as per the volume details shared. Okay, okay. Fine. This is basically we are procuring some cargo for ONGC. And for that purpose, we have procured some cargo. So only that thing is there. So normally, ONGC is asking us to procure these cargoes. So of course, this number, I think, is hardly it is two cargoes are there. So two cargoes we have procured for ONGC. So it is on back-to-back basis. They require it for their petrochemical plant. So that's the only thing we have been able to procure. But at this kind of prices, it has been a very difficult decision to even buy these two cargoes. But there was a requirement, so we had to buy. But we have bought it, definitely. You are rightly saying. 6 TBTU means two cargo almost we have bought it. So the second thought is, can you share with us the number of cargoes or TBTU diverted from Kochi on the Gorgon contract, the diversion from Kochi to Dahej? That's the same TBTU. About almost 11 TBTUs. 11 TBTUs. And this trend will continue in the second half also, given that Kochi utilization is still about 22%? Targeting the same? This is for half year, right? Same TBTUs for half year. In the market, it's for half year. For the quarter, it is 2.90 or 5 TBTUs. That trend will likely be better. Okay. So can you share with us the contribution from regas margins included in the gross contribution for this quarter? The cooling and other services revenue is INR 619 crore. 619 crores? 619. Okay. So finally, a broader question now. If you're looking at the current constraints in LNG capacity and global demand, is there a reason to revisit the kind of discussions you are having with Tellurian to tie up equity LNG? And is there any discussion at the board level to look at additional tie-up of LNG through investing in a liquefaction plant? Any thoughts on that? No, no, no. There is no plan to go right now for this kind of investment. Perhaps nothing is on the cards. Tellurian part is already disclosed earlier. That MOU has already expired. So there is no further talks on that. You are talking about investment in liquefaction terminal. Nothing is there right now. So there is no commitment. Because LNG otherwise is available in a free market, there is no additional benefit after investment. This is not the right time to go for the investment in these terminals. So right now, there is no plan. But in the future, if there is any, we will certainly discuss it. Okay. Thank you very much. I'll join with you. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, we would request you to rejoin the question queue. The next question is from the line of Amit Rustagi from UBS. Please go ahead. Okay. Thank you. Thank you, sir. Sir, could you give us any update on the Kochi terminal tariff? I know you have mentioned in the notes for accounts. But any progress on that? Kochi terminal? Tariff. Tariff. Tariff, yeah. Renegotiation. Yeah, yeah, yeah. It is there because we have disclosed in accounts also that we are in talks with the off-takers to increase the utilization of Kochi terminal. So we have asked them to commit more volumes to that terminal. And based on that only, we will revise the tariff on the lower side. But this is under discussion. It has not been confirmed by them how much they will do. So if they do it, then certainly, in the long run, we shall be benefited. And then we can think of reducing the tariff also. So that is under discussion. So right now, we cannot disclose more about that. But that is true that we are in discussion with them to commit more volume in Kochi. Okay. Sir, my second question relates to could you explain its lease accounting impact in this quarter? There is a notes to accounts against point four. The company has invoiced INR 198 crore. Can you explain that? What is the real impact of this in the current quarter? Second part, I can explain. First part, my colleague will explain on that. So basically, there has been an agreement with one of the customers. And we have said that we'll adjust some INR 65 crore because they have committed volume in the Dahej terminal, Kochi terminal, in place of the Dahej. So we have considered that somehow we have got the revenue. So there is no loss as such because had those cargoes been brought to the Dahej terminal, we would not have levied any use or pay charges. So we have considered their cargoes at Kochi as it has come to the Dahej. So basically, this is over and above the committed volume for Gorgon because Gorgon commitment is already there. Apart from that, because they had brought some spot cargoes there, so we have considered that as part of utilization of the Dahej capacity because ultimately, our Kochi terminal is already underutilized. So somehow, we have got the revenues, whether at the Dahej or Kochi. So that part, we have considered. And that's why we have adjusted that part, INR 65 crore, from the total outstanding because they have given us the revenue at Kochi in place of the Dahej. Okay. So INR 65 crore has been booked additionally in this quarter? Pardon? 65 crore has been booked in this quarter as revenue. This quarter, we have booked, yeah. So this is additionally we have booked. Okay, sir. And the lease accounting impact? Yes, sir. As far as lease accounting is concerned, there is INR 137 crore gross margin level positive. Then there is INR 4 crore of foreign gain and INR 7 crore at the level of operational expenses gain. Then depreciation, INR 85 crore negative. And finance costs, INR 77 crore negative. So net impact is INR 14 crore negative at the profit before tax level. Okay, sir. Got it, sir. Thanks a lot. Thanks a lot for answering the question. Thank you. The next question is from the line of Varatharajan Sivasankaran from Antique Stock Broking Limited. Please go ahead. Sir, just want to understand if there was any inventory gain last quarter? Please repeat your question. We couldn't hear it. Any inventory gain last quarter, sir? Inventory gain. Inventory gain is INR 28 crore. 28. For the current quarter. INR 28 crore. Secondly, on the CapEx program, you were mentioning about the details. So you mentioned the phase I is going to cost only INR 200-250 crore and the second expansion of around INR 700 crore-INR 800 crore. On the other hand, you mentioned INR 1,200 crore of two tanks plus INR 1,700 crore of jetty. So I just wanted to understand how these numbers break down between phase I and phase II. See, it's not a phase I. A phase II means that still, we can process 20 MLPPs with only six tanks being in place. But still, we want two more tanks because we will require it when we do the expansion from 22-22.5. So that part, we need some flexibility. But otherwise, there are certain deep debottlenecking issues that are there which can be done. And that's why the CapEx is very low while expanding from 17.5-20 MLPPs. But for that part, then we will do for 20-20.5, 22.5, there we require some higher CapEx. Because even from expansion from 15-17.5 MLPPs, we have spent almost INR 420 crore. So that part is there. Of course, certain modifications are required. So we have estimated those prices. So that's what we are doing. The total CapEx will be in this expansion, INR 1,000 crore almost. You can say two and a half, INR 500 crore each. Okay. Thank you. Thank you. The next question is from the line of Kirtan Mehta from BOB Capital Markets. Please go ahead. Thank you, sir, for bringing this opportunity. Would you be able to give us some color on what is the mix of the long-term versus spot cargoes in the regas, the volumes that you book for the regas services? You want the ratio? Yeah. See, this quarter you want, then we have actually got it here. Perhaps it's 116 versus spot is only 7 TBTUs. But the long-term, these cargoes which have come and the service cargo which have come, almost 233 TBTUs as against 7 TBTUs of spot and short-term cargo. So ratio-wise, it is very less, not very significant. The reason is very obvious that prices are significantly high. At this price, the consumption is very low for spot and short-term gas. So long-term volume, of course, is higher in this quarter. I'm sorry. Actually, I was asking that you basically break the cargoes in three: long-term, spot, and the third party which brings in only for the regas tariff. Service cargoes, yeah. So within the third category of third-party regas tariff, what would be sort of the breakup between the long-term volumes and the spot volumes? We don't know that because it's up to third parties how they source their LNG. So we don't get into whether they are sourcing on long-term basis or spot short-term basis. Is there any rough estimate, very broad estimate? There is only capacity booking is already there. We know it very well that around GSPC has booked about 2.5 MMTPA in our terminal, Dahej. And. Okay. So what you're asking is out of 117 TBTUs, what is the. No, no. I'm just saying there's a commitment from their side which is a long-term contract for service also that they will bring 2.5 MMTPA of cargoes. That cargo will constitute only 40 cargoes you can save from GSPC in a year and 100 MMTPA BPCL, 16 cargo. IOCL, maybe 24 cargoes. So this is how they have to bring as per the contractual obligation. But how much they bring actual, it's up to them. Whether they bring it through spot, they bring it through their long-term portfolio, so this is up to them. They have booked the capacity in our terminal. So they are utilizing that capacity in whatever manner they bring the cargo. Understood, sir. Thank you. Just one more clarification on one of the previously about you said that you booked additional revenue of INR 65 crore this quarter as you recognize the revenue on the Kochi terminal. So this is the additional revenue booked. And it's not really a reversal of the previously booked revenue, correct? Hello. Are you able to hear me? This is the operator. We are not able to hear the management audio. Yeah. Please. Just I want to you are asking about INR 65 crore? Yes, sir. Yeah. So basically, I will give you the detail here that it has been outstanding amount since last year, actually. So it has been there. And there was a request from their side that you consider that because ultimately, they have brought the cargoes. So we considered that request this year. It's pertaining to almost 2020. This amount, you can see in the other expenses. The other expenses of INR 200 crores include these INR 65 crores. This is actually in the cost side, not in the revenue side if you are asking for. Yeah. It's not. The revenue was already booked in earlier years. Right. So the earlier booked revenue has been reversed this quarter as you have waived off this revenue? Because we have got the revenue ultimately from Kochi terminal in place of Dahej. So we have considered their request. And that's why we have adjusted this year. There is no additional revenue booked on this account this year. Understood, sir. Thank you. I'll come back in the queue. Thank you. The next question is from the line of Vidyadhar Ginde from ICICI Securities. Please go ahead. Yeah. Thank you. Good afternoon. In the last earnings call, when I had asked you, you had stated that you were expecting about 16.5 million tons of volumes in Dahej. So after first half is over, do you still expect that number to be 16.5? Or could it be lower or higher? Some hope of higher was coming is that Q2 annualized number looks like more like 18 million tons. So was it because of the off-takers picking when spot LNG was relatively cheaper, they have picked up more cargoes? Was that the reason? And are you still expecting 16.5 million tons in FY 2022? Yeah. We are always hopeful because if you look at the first half, I have just informed you, we have already processed 449 TBTUs in this first half. If you look at the performance, it will continue in this range. We will reach almost 900 TBTUs. So it's always going to be there, not less than 16.5, I think, if it goes in the same manner. Maybe slightly, it may be less. But we expect that it should reach that level because the long-term contracts are very much in demand. So all the cargoes are coming in time, and all are taking it. So there is no default in that. There is no postponement of those cargoes. So that part is going on. So that is a good thing. Perhaps because on the strength of that long-term contract, we shall be able because in the first quarter itself, we have done a good job. Perhaps we have processed almost 190 TBTUs, 94 TBTUs, even though there was a lot of impact of lockdown and other things. We hope that the situation remains normal like it is now. Perhaps consumption will continue to increase. The only dampening part is the price rise in this spot LNG. That is not helping in bringing more spot cargoes in India. Long-term contract will continue. Perhaps we hope that we have already done 449 TBTUs in the first half. Perhaps we will be able to do it in the second half also, almost similar performance. Okay. So are you basically saying 16.5 or worst case, slightly lower? You see, if you look at 16.5, I'm telling you the exact total amount which is going to be there because if you look at 17.5, so it means that almost it will be in the range of, I think, 51 is there. It should be 17.5 means we should process almost 892.5 TBTUs. 892. And now I'm telling you 449, we are already done. So it means if we do 400, even 450 we do, it will reach 900. So that means it will be almost 17.5. You leave apart 16.5. 16.5 means you are saying 16.5, that means it should be in the range of 841 TBTUs which we certainly will achieve because we need to process only 400 more, less than 400. Okay. Why? We are committed. Yeah. My other question was regarding this backlog of volumes which you are trying to get from RasGas. I just wanted to find out, if this volume comes in, is it more likely in calendar 2022 or FY 2023 and not really in the current calendar or financial year? It's all questions we cannot answer now. And it's a bit premature. Let us see what happens. But one thing which has already been in the public domain, we are trying that. And perhaps as and when there will be any development on that, we will let you know. Nothing can be predicted right now because all will hamper the process. So we will not disclose anything which is what is going on and what is the process, how it will happen. It's all premature. It is only a request. They may or they may not agree. Okay. Lastly, on the INR 65 crore which I was somewhat confused, is it actually just a prior-period expenditure in this quarter and not really an income? Which one? The INR 65 crore which you recognize. My initial understanding after you first answered was that it was a prior-period income. Now you seem to suggest that an income. Prior-period income, basically, you can see it's in fact booked in use-or- pay charges, which is an income in the previous year. So it is already booked there. And accordingly, that has been considered this year. So you can say that earlier income has been reversed. Okay. So you are actually reversing this quarter? It is a reversal only. Actually, provision has been reversed. You can see income booked in the prior period. Okay. Okay. Actually, if we are to focus on the current quarter, your expenditure actually got bloated by INR 65 crore. Yes. Yes. Actually, to that extent, the profit is higher. Yeah. Yeah. Yeah. Yes. Yes. Yes. Had this not been there, profit would have been even higher. Okay. Thanks a lot. Thank you very much. Right. Thank you. The next question is from the line of Avadhoot Sabnis from InCred Capital. Please go ahead. Yeah. So going a bit more again on the same Kochi tariff issue, okay, what I'm trying to understand, two, three things. When you're saying it's related to committing additional volumes, it is additional volumes only at Kochi, right? So if somebody comes back saying, "I'll give you additional volumes at Dahej," that is not sort of will be acceptable to you? No. No. That is not acceptable. That will be also use-or- pay type of contract. It's not that you simply say, "I will bring it," and then don't bring it. It will be a contract use-or- pay. So either they have to commit. That means in case they are not able to bring it, then they have to pay it. Secondly, sir, suppose whatever, they come back and saying, "Okay. We'll take additional sort of 1 million ton or take-or-pay. And accordingly, the tariff has to be revised down." Okay. Whatever may be the revision, whether it's 10%, 20%, will it be with retrospective effect from 1st of April 2019? Regarding the regas charges you are asking, no, because of the Kochi? Yes. Yeah. Yeah. The understanding is that. You see, when the volumes are committed, our objective is to get the volumes committed. And the tariff is taken a view over a period of—I mean, in our pricing model over a period till the end of this terminal, till end of this terminal till 2039. So over that period of time, the tariff calculation deduction will start from April 1st 2019. So that is not a problem for us as a company. Our objective is to get the volumes—I mean, booked in the Kochi terminal so that the utilization of the terminal goes up. Any broad guidance on what would be the level of the drop in the tariffs? No. We cannot predict that now because it is all unless something happens, we cannot disclose all those things. But certainly, if it happens, it will come to your knowledge also. But if they don't commit, then there is no reason why they will not be paying at whatever level we are now at INR 79. They will continue that. It has gone up to INR 87 now. Because in 2019, it was INR 79, but now it is at INR 87. Firstly, we see no risk at all. I mean, if they don't commit to additional volumes, you don't see risk to the existing price? They will pay. Yes. Yes. They have to pay as per contract. Okay. So there is no risk on the existing tariffs? No. No. There is no risk unless there is a commitment. Okay. Second, sir, second question was in relation to the take-or-pay. Okay. There was INR 198 crores, as I said, which were invoiced. I assume out of that INR 198 crores, INR 65 crores have been reversed, right? Out of three customers, you have arrived at the settlement with one customer. Am I understanding right? Right. Right. So what happens to the other two customers? I mean, in the earlier quarter, I think there was assurance given in terms of those notes that you don't see any negative impact at all on the financials as a result of the dispute, whereas we already seen one negative impact in this particular quarter. Do you see a further negative impact potential going forward? I mean, we gave us some clarity on that. See, without getting into more details on this because discussions are still going on, this is only a provision created. After this analyzing, it will only be done. The thing is that this is the major item, actually, within that INR 198 crore. No. No. All will be recovered. I'm telling you, there is no chance that it will not be recovered. All will be recovered apart from this because if you look at INR 210 crore was there on INR 198 crore. So out of that, some amount has already been paid. Almost INR 54 crore has been paid. So balance, if you look at, it remains only to the extent of INR 71 crore. So that will be paid. This is only just because of this that we have agreed to it that unless until balance amount is paid, we will not, in fact, agree to this kind of adjustment. So I think there is nothing on risk out of that INR 198 crore. So perhaps we are hopeful that that will be paid because INR 54 crore has already been paid out of that. If I may ask, the people who have paid the INR 54 crore, they are the customers who have not again, there are three customers, right? So the person who has agreed for the INR 65 crore settlement, is it the same party who has already paid part of the INR 54 crore? Yeah. Same party. Okay. Thank you so much. Thank you. Thank you. The next question is from the line of Puneet from HSBC. Please go ahead. Yeah. Thank you so much. My first question is again on Kochi. While you said the tariff is 87, how much are the customers actually paying currently? Hello? Can you hear me? Yes. We can hear you, sir. One moment. Okay. I think you are asking how much customers are paying. Yes. You're billing them INR 87, but how much is it? On this part, we would not like to disclose, but this is correct that they are not paying what we are demanding. So perhaps because things are under discussion, so they will pay it otherwise because all our customers are Maharatna companies. So they have no problem in paying it. The only thing is that they have to take the approval from their board for committing more volume because they are interested in committing more volume. So they want that they should commit some volume to PLL and get some benefit from price reduction in tariffs. So that's why they are not paying. But of course, they will pay whatever outstanding is. In your almost INR 2,000 crore of trade receivables, how much amount would that be attributable to the difference? How much you are saying? 2,000? Yeah. INR 2,000 crore of receivables. This is the current tariff. It is. Yeah. Yeah. Right now, basically, as it has been told, that since discussions are going on and as only goes the finalization, all these numbers, we will not be able to disclose right now. If there is any disclosure to be done, we will do that in the next financial year. Okay. Okay. Understood. My second question is on the regas volume from the service part. So this time in Dahej, you did 117 TBTU. Same quarter last year, you did 135. And in Q2 FY2020, you did 126. So the loss of volume, do you expect to be made up in the subsequent quarters? We should hope. But because of the current scenario, it is becoming very challenging. But still, we hope that if they will not bring the cargoes, we will levy this use-or- pay charges on them as per the contract. Okay. So they will have to still pay attributable charges? That's the contract that they have to pay if they don't use it. Understood. That's real. So thank you so much. That's all from my side. Thank you. Thank you. The next question is from the line of Vikash Jain from CLSA. Please go ahead. Hi. Thanks for taking my question. So can I understand this adjustment a little bit better? So you have already booked this revenue, this one-off that we are talking about in the earlier quarters or years or whatever that is, this about INR 198 crore or so. And so essentially, then the INR 65 crore adjustment that you're making, this INR 65 crore has been written back in terms of provision has been made. And it has also been added to revenue, right? It has been added in the past period, not in this current quarter. Oh. If it has been added in the past period, why will you yeah. Yeah. No. No. I'm talking specifically INR 65 crore recovery that you are getting. So why will? crore, we have booked the revenue in earlier periods. Maybe in 2020, I think it has been done. But now we have adjusted that part here. So it's only the provision we have made in this part. There is no corresponding revenue in this quarter to this. No, sir. But why will there be any impact on the income statement? Because the impact will only be on the balance sheet, right? Because now the receivable will go away, right? I think you have correctly understood. The only thing I want to convey you that this has been adjusted out of the total deemed from the debtors, you can say, we have made a provision because we have booked that revenue in the earlier period. So that part, we are telling that we have done because we wanted to settle this issue. Ultimately, we have thought. And that's why. No. No. Sir, I'm not getting into that bit. Sir, you have explained pretty well. So that time, I'm just trying to understand that. The bookkeeping is the topic. So that's the bit that I wanted to check, that in terms of whether it would, because I am a little uncertain why it would have any impact on the income statement because it has already been booked. It was so far a receivable. Now that receivable has simply been converted into cash, right? So why would it have any impact on the income statement at all? Why there will be a provision or anything? No. No. Because what has been done is there was an income and receivable booked in the past period, say, calendar year 2019 and calendar year 2020. Now what has happened is one of the customers, he said that, "I have got more cargoes in Kochi over and above my contractual commitment. But since my end user is in Kerala, not in Gujarat, that's why I could not bring those cargoes in Gujarat." So while discussion and negotiation with that customer, basically, it came out that whatever over and above cargoes he had brought in Kochi, he has actually given us revenue. And that revenue should be adjusted against this that benefit should be adjusted against this revenue that we have booked at the rate in terms of the use-or- pay charges. So the revenue was booked in 2019 and 2020. And against that, a provision has been created. It is in the cost side. You can find that the other expenses is inflated this time around INR 200 crore. This INR 65 crore provision is in the other expenses only. It actually hampers the income statement. If you add this INR 65 crore one-off, then actually, the generated profit is more than what is reported. Okay. And as I understand, of the total volume that you brought to Dahej, you explained that that 60 TBtu is actually not really true sense of spot trading volume, right? I mean, because although it is shown as spot, it is where you have a back-to-back arrangement with ONGC. So there would not have been any big margin on that. Is that the correct understanding, or there would be reasonable trading and marketing on that? Actually, we do not discuss because of our unique relationship with our customers. Generally, we don't discuss it in the quarter. We've already brought two cargoes. We have bought. Sorry, sir? We have bought two cargoes this time. We are showing here the number of cargoes being 60 TBTUs we are bringing. So we have, in fact, brought actual cargoes from outside this time. It has a big margin. It has. See, the way you explained, that's what I was asking. It is, of course, with a margin. Some margin may be there, but not only regas because we are procuring it. So it will be having some trading margin also. Okay. Okay. Okay. Thank you so much, sir. Right. Thank you. The next question is from the line of Vishnu Kumar from Spark Capital. Please go ahead. Thanks for your time. Just a repeat of the last question. Any non-regas income that you have booked apart from the inventory gain of INR 28 crore, do you have any storage and offloading or any use-or- pay that you can attend? Non-regas. Other than regas charges, you are asking. Correct, sir. Other than regas charges, if you look at, we have some Ind AS impact is there as compared to previous quarter. And inventory valuation is there at INR 28 crore gain. INR 39 crore is towards Ind AS impact. So these are some gains other than these regas charges. And also, we have some trading margin, INR 123 crore. 123 crore. Sir, anything that you have as a storage and offloading earlier, you used to mention some cargoes used to be held at Kochi. And again, you offloaded back into. Now it's not. There were reloading cargoes that were there earlier. Now this is not the case. We are not doing that part. Only revenue which has been there in this quarter, I've told you, it's Ind AS impact, inventory valuation, and also trading margin. INR 5 crore of dividend earlier listed at Dahej. INR 5 crores. And. Investment income. It's total INR 13 crore is there. Investment income is there, of course. INR 30 crore of facility charges that we have booked at Dahej. Understood, sir. Any additional cargoes you source from your long-term contracts which when you get those, if you get those, would it go to your back-to-back long-term, or would you have the flexibility to sell some of them under spot? No. It will be a back-to-back. It cannot be long-term. If at all it happens under long-term contract, it will be back-to-back. Understood, sir. And one final question. Any thoughts on Qatar expansion when you're considering all the way to invest? I mean, at least when you're considering to invest in the U.S. for Tellurian and all? Any thoughts of whether Qatar expansion from 77-100, we will participate, or I mean, in return, would we get some longer-term contracts at a much cheaper rate? No. It's an investment part. Perhaps it's not there because there is no requirement for that project they are doing on their own. The only thing we are trying that we want to extend the contract beyond 2028. So we are making all efforts to renegotiate and perhaps extend that contract. And that contract should be extended based on the current international contract which has been entered by Qatargas. They have a contract with Sinopec. They have done with Bangladesh and Pakistan at around 10.2% of slope on DES basis. So that kind of terms may be there. So I think this is the reason that we are trying to negotiate with Qatargas to extend the existing contract. And if it is of course, as we have witnessed, a difficult time has been there that we are not getting long-term volume. Now it is the right time that we should have long-term contracts because you cannot rely on spot or short-term gas. If you need a gas on a regular basis, permanent basis, you cannot rely on a spot or short-term cargo because if you rely on a spot only, then you will face this kind of situation where you are paying $30, $32. So we will try to have more gas from Qatar or anybody else so that we can increase our portfolio also. And at least we will definitely be making our effort to enhance the contract of 7.5 MMTPA. We would like to source more gas because the demand in India is likely to increase by 2030. So I think there will be more gas required from outside India. And perhaps we want that this contract will be extended. And perhaps that will be done. That will be in terms of the current prevailing international contract which have been entered by Qatargas or anybody else. Got it, sir. One final one, sir. On the East Coast terminal, let's say if there are four things you need to pick off before you go for a FID, where would you be now? And what are the things that you need to get a better comfort or some understanding with some government or entities before you actually go ahead and announce a project? We are making all demand assessments. We have already appointed a consultant. He has done the demand assessment. And perhaps demand will be there. And we are hopeful that perhaps some capacity will also be booked if possible. Maybe not 200%. Maybe 20, 30%, 30, 40%. So that will be helpful to us. And balance, we can market. Perhaps demand will be coming up in the Eastern India because so far, there has not been any pipeline in that part of India. So that's why consumption could not take off there. But now it will not happen. And perhaps more industry will be coming on that particular reason. And perhaps more gas will be consumed in that sector. We are hopeful that while putting up the terminal, we will try to rope in the customer also so that at least 30%-40% capacity can be earmarked for that customer. Balance, we can market on our own. This is our endeavor. Let us see what happens. There is a need for a terminal on the East Coast. That will go forth. Any indicative timeline, sir, in this particular build that you think that you may come up with a final FID plan, let's say, 18 months, 24 months? You think that you can close something, or it's still open? See, discussions are going on. But we have a plan to have a terminal by 2025. So this is the timeline in between we have to finalize everything. Backlogging, even if it requires three years, which means somewhere next year, we'll have to probably announce to get it. We'll have to. We'll have to because it will take one or two years because this will be a FSRU-based terminal. So it will not take much time. Got it. Not a land-based terminal which takes normally 36 or 40 months. So it will take less time. Indicative CapEx if you got to do this? Indicative? CapEx if you need to get this done. Indicative CapEx, I have told you, around INR 1,800 crore-INR 1,900 crore will be there. Understood, sir. Thank you. Thanks and all the best, sir. Thank you. Thank you. The next question is from the line of Amit Murarka from Axis Capital. Please go ahead. Yeah. Hi. Thanks for the opportunity. Sorry to harp back on the question of the customer commitment. In the results release, I think what is mentioned is that the customer is already taking on. Sorry to interrupt you, Mr. Murarka. We are not able to hear your audio clearly. We are not able to hear. The recordings are already being done, and therefore. Mr. Murarka, we are not able to hear your audio clearly. Please use the handset mode. Mr. Murarka, please go ahead with your question. Hello? Yes, sir. Please go ahead. Sorry. I was saying that from the results release, it does look like the notes which is given does seem that the customer is already off-taking some additional volumes at Kochi. And you are therefore now looking not to pursue the take-or-pay with him. So is that understanding correct? In Kochi, you are talking about? Yeah. Yeah. Yeah. So the same discussion is already happening. This is the same charge, I think. It's a Kochi terminal is not having a capacity booking at all. It's only that volume of this contract from ExxonMobil that we are taking cargoes to Kochi. But some of them are coming to even the Dahej also. So Kochi as such, I couldn't understand your question. No. No. So no. The wording, I was just going by what is written in the notes to accounts of the results release. Right. Right. I will see the note account. Yeah. Yeah. Please now tell me what you are saying. Yeah. I was thinking that the notes to accounts says that note number four, it says that pending settlement on issue of take-or-pay based on negotiation, the customer is already on the basis of higher volume achieved by the customer in the other contracts or locations. So it says that the customer has already achieved higher volume in that location. So I just wanted some clarity. Does that mean that the volume is already getting done at Kochi by the customer, or will it be done in the future? And if it will be done in the future, is there any timeline for that take-or-pay commitment? No. It has already been brought by them in that particular region, Kochi. They have brought two cargoes there. Okay. So then it is already done and settled then. Yeah. So this has been already brought by them. There is no commitment for future. That's why we have agreed. And there is no other customer who has done like this. So it is only one customer who has brought all the cargoes in place of Dahej to Kochi. There is no other customer who has brought any cargo anywhere in either of our terminals. So it is only in one case it has happened. So we have considered that. Sure. And just one more question is on the system gas loss which happens as part of the regasification process. So where are we right now on that? I mean, I remember earlier, the number used to be less than 1% or something like that. This loss you're talking about, the boil-off? Yeah. Boil-off. Yes. Boil-off is as per contract. I think there is no boil-off. You're talking in respect of Kochi? No. At Dahej, I meant. So it is as per contract. Yes, sir. Contract is there. Okay. But would you still be able to because for, let's say, the spot cargoes and all that, it could make a difference. So what would that number be as of now? That part is boil-off is something which is consumed in the process of regasification. So basically, that part is not disclosed anywhere. And also, it is utilized in the system itself. It's a boil-off which is being the cost for using the system, using the regas plant. So I think that part is consumed, you can say, safely. Okay. No. No. I understand. But I just wanted to understand the percentage range of that boil-off. Is it 0.7%-0.8%, or lesser than that? I think that part, see, that is an operational issue. I mean, we don't disclose that. But what we can disclose is as per the contract. Whatever is the boil-off that has been agreed with the customer, that is being charged. And we are within that range. And the consumption is within that range. Okay. Sure. Thank you. Thank you. Ladies and gentlemen, that was the last question. I now end the conference. Over to the management for closing comments. Thank you very much. Perhaps we are happy that you have asked all your questions which you think we are required. We have always sought your cooperation. We have sought always your assistance in any matter because, after all, it's the feedback from you people only which, in fact, encourages us to do even more so that we can increase the profitability. Perhaps we will continue to get the kind of cooperation you are giving. Anytime, even after not only this conference, you feel that you have some doubt or you want some clarification, you are free to talk to myself, my team members, and we'll clarify. We'll also seek your assistance in doing something which can help us in increasing our performance, increasing the bottom line, and also increasing the efficiency of the operations. Perhaps those things help because you people, in fact, suggest from outside. It's more important for us to look at your suggestions also. Thank you very much. Thank you. Ladies and gentlemen, on behalf of Yes Securities, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.