GAIL (India) Limited

Good day and welcome to Gale India Q1 F420 Mornings Conference Call hosted by FTSU Securities Limited. 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 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. Nilesh Kogais from HDFC Securities. Thank you and over to you, sir.

Yeah, thank you, Aman. Good evening, everyone, and welcome to Q1 FY20 earnings call of GAIN. We have the management of GAIN represented by Mr. A.K. Tiwari, Director of Finance, and other senior executives. I now hand over to the management for their initial comments.

Over to you, sir. Good evening. I would like to share some of the brief highlights and then we'll discuss on the questions which are there from the investors. So, again, good evening to all. The physical and financial performance of the quarter ended June 19 are already with you, and the same has also been made available on the GAIL website. I presume that all of you have gone through the same. However, for the benefit of audience, let me repeat the following few highlights for Q1 FY20. I would like to first share the physical highlight, then the financial highlight. The gas marketing volume has decreased by 1.87 mm S&D. mainly due to decrease in the domestic gas cell which is 4.14 mmHgMd and increase in the RLNG cell by 2.27 mmHgMd. There have been major shutdown at the customer and mainly fertilizers like CFCL, IFCO, AMLA, FULPUR, NFL, NFL VATINDA, GRIFCO which has impacted the supply as well as the gas marketing and sales. Overall transmission volume has decreased by 3.74 mm CMD mainly due to above reasons for major shutdown at the customer's end. The capacity utilization of NG pipeline has been 51% in comparison to the 53% which was in Q4 FY19. And the polymer production has further decreased by 68 TMT in comparison with the Q4, mainly due to shutdown for preventive maintenance and gas regeneration job. But I would like to mention here that poor shutdown, the plant is running fine, and we have made record production of 78 TMT in the month of July 2019, which is the highest. The LHC production has decreased by 36 TMT due to shutdown at Pata, Bhagodiya, Gandhar and C2-C3 plant at Bijapur. There is decrease in LPG transmission volume by 196 TMT mainly due to shutdown at HPCL carbon at BSPL and capacity augmentation job at JSPL. Now I would like to highlight the financial highlights for FY20. The gross sales for Q1 FY20 is Rs. 18,276 crore versus Rs. 18,707 crore, decreased by 2% mainly due to decrease in the PATCAM sale by 77 GMT, rupee appreciation, decrease in LSE sales, etc. However, the PVT for Q1 FY20 is Rs. 1,981 crores versus Rs. 1,740 crores in Q4 FY19, which is increase of around 14%. The pad for Q1 FY20 is Rs. 1,288 crores versus Rs. 1,122 crores in Q4 FY19, which has increase of 15%. Now the increase in the profitability are mainly due to profit in gas marketing segment has increased by 258 crores. I think the segmental profit and pivot is already available with you in the gas marketing segment 258 crores due to better realization on tradable volume. And the profit in energy transmission has increased by 90 crores, mainly due to increase in the weighted average tariff realization. The loss in pet chem segment has increased by 202 crores, mainly due to decrease in the petrochemical production sales quantity, increase in the weighted average cost of input, which is partly offset by decrease in the chemical consumption, repair and maintenance, et cetera. The profit in LSE segment has increased by 95 crores, mainly due to increase in the average LSC price realization, which is 5,200 metric ton in comparison with the last quarter. The profit in LPG transmission segment has decreased by 33 crores, mainly due to decrease in the LPG transmission quantity, and the profit in the other segments has increased by 61 crores, mainly due to increase in the EMP revenue, increase in the wind power revenue, etc. The capex during the quarter is 877 crores mainly due to on account of the pipelines. I would like to share that the tariff revision order for HBJ, HBJ Upgrade, Mumbai region KG Basin has been ordered. which are effective from 1st July 2019 and the commissioning at the KKM BPL Kochi Kurnath pipeline is already on base so commissioning is going on in a phased manner. The Urjaganga project is also as per our schedule and we have reached up to Dhobi, Patna, gas has been charged. In all the CGDs that like Varanasi, Patna, Kathakya and Bhanushad, we have already started our CGD sales, PNG, CNG. So these are the few highlights which I wanted to share with you. Now I request for any questions you have with the participants. Thank you very much.

Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone 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. The first question is from the line of Rohit Ahuja from BOP Capital Markets. Please go ahead.

Hi, sir. Thanks for the opportunity.

Thank you. Thank you very much.

Sir, three, four questions. First on tariffs, sir. The tariffs that we got for HBJ and some pipelines were far lower than what we had initially submitted. Are we contesting this tariff in the appellate

No, we are not contesting the tariff.

Okay. So, any particular reason why and what is the effect on the overall tariff from 1st July? Are we seeing an increase or is it going to be a flash?

It will be almost neutral and we are not contesting and whatever the data and details we have submitted, PNGR has passed the tariff for HBJ. So, this is okay from our side.

Okay. So secondly, from Petro and LNG, we got the data that their incremental capacity of 2.5 at the hedge is operating at close to 100%. So that's roughly about 10 mm CMD increase. So do we see those volumes entering our pipeline network? And what sort of quantum can we expect from that?

This is their capacity which has been augmented from 15 to 17.5 mmTPA. So we have long-term tie-up and we have long-term tie-up as well wherever we are having the LNG. We will process there itself as well as the other LNG terminals wherever required. So that capacity they have augmented. We will utilize wherever the opportunity comes.

So, apparently, usually, traditionally, we have seen about 70 to 80% of Petronet's overall volume flow be routed through our pipelines. Can we aim to be maintained?

Yeah, that is, yeah, Sanjay, you want to? I think, yeah, please.

The additional volume that is coming from Petronet is about 9 million cubic meters per day, and The quantity that we have booked, we are getting that quantity. We are getting whatever and our ratios are maintained. In fact, the ratio that Gail is getting gas in last quarter is actually more than what it used to be earlier.

Right. So that's interesting, sir. Sir, currently on your marketing business earnings, we saw a very good level of earnings around 860 crores. That is driven mostly from low spot LNG prices that has got you such a good margin?

No, it is a mix of that. Some of the hedging we have done, the long-term contracts, it is basically the difference between the purchase price and sales price. Where about required we have health and the better margin we got it from the HH volume which we have traded and the difference between these brand price as well as the HH price which are there. So that is the combination of that.

Thank you Mr. Arjun. I request you to join the question queue for any follow ups. Thank you. The next question is from the line of Bhavin Gandhi from BNK Securities. Please go ahead. Thank you for taking my question, sir.

Sir, can we have the split of the gas trading volumes as to how much was US LNG, how much was medium and short-term contracts and domestic gas?

Mix of the total LNG contracts you are talking about? No, no. The gas trading volumes, 97 mm CMD, can we have the split? Yeah, yeah. We have 97 is comprised of yeah is comprised of our domestic is around yeah 84 billion and 12.5 outside India you are talking about the outside sale or it is the sourcing so if you can help us with both the numbers please APM gas is around 43 mm CMT and then we have this RLNG is 21 22 And total domestic is 84.11.

International is 12.5.

International sale is 12.44. So total is 96.55.

And sir, how much of US LNG was sold in India?

It is how much cargo.

How much cargo has been sold in India? 5.5 million cubic meter has been sold in India. 12.5 has been sold outside India.

So sequentially, these sales have declined, is it? I mean, the domestics, I mean, US LNG sales in India from fourth quarter to this quarter have declined?

Yeah, because of shutdown and other things, we have told that these are the basic reasons for that in my opening remark. So these are the overall reasons for the total trading. And we are hopeful that it will be better in this quarter. Sure. Thank you.

Thank you. Thank you. The next question is from the line of Robil Sain from Centrum Broking Limited. Please go ahead.

Hello. Am I audible?

Yes, you are. Please go ahead.

Yeah. Good evening, sir. Thanks for the opportunity. I have two questions. One, with respect to the petrochemical segment, there seems to be a sharp increase in the gas costs or rather the overall costs for the segment on a per unit basis. Is that solely because of the fact that sales volumes or production volumes have gone down sharply or have the effective gas costs also gone up for the segment in this quarter?

It is mainly because of the decreased production which has affected the fixed costs added more. The primary reason is that only. Okay. Because the production was less, so it was distributed on the produced quantity.

Got it, sir. Got it, sir. And as you mentioned that from July onwards, we are now at an accelerated run rate of even more than 200 million tons per quarter.

Yeah, we have already catch-up planned to have 100% capacity utilization for the petrochemicals. So that we are going to achieve.

Okay. And, sir, the second question was with respect to the LPG realizations. If I look at the international prices prevalent for India, they were at probably around $450 a ton, if I'm not mistaken, whereas our effective price is coming in at significantly higher than that. Any reason why that premium on Asian prices has gone up, sir, this quarter for us?

I think it is... International determined prices are there. So this quarter we had a 5,000 increase in the per ton overall. That is the main reason.

So are we saying that international prices have gone up by 5,000 rupees a ton or so, sir?

QOQ?

Yes. Yes. Okay, okay. Then I have the wrong numbers. Fair enough. Thank you for the clarification. That's all from my side. Thank you.

Okay. Thank you. Thank you. The next question is from the line of Sajeet Lodha from Birla Sun Life. Please go ahead.

Hi, sir. Thanks for taking my question. The first thing, sir, the quarter-on-quarter drop of about 4 mm CMD, how much of that could be ascribed to the shutdown in fertilizer plants? Can you speak loudly, please, sir? Hello. Can you hear me now, sir? Yeah, yeah. It's okay. Yeah. Sir, the quarter-on-quarter drop in transmission volume of roughly about 4 mm CMD, how much of that could be ascribed to the shutdown in fertilizer plants?

Mainly is around 4 mm CMD on account of these shutdown in the fertilizer plants. Mainly contributes that only. So you are saying that those fertilizer plants were shut down throughout the quarter and it was not like... No, no, it was all the... Throughout the quarter they were not shut down. Much reasonable days were called shut down. Some were 25 days, some were 26 days. somewhere 27 days, like that. That is the main reason.

Sir, so will it be fine to assume that your first quarter volume will jump back to the fourth quarter levels plus you will get some incremental volumes on the petrol at the extra terminal. Is it fair to assume that?

Yes. Already we have started getting higher volumes.

Okay. Okay. Then, my second question was in terms of PET-CAM, just to follow up on the previous question, the gas cost, can you share what are the proportions of that gas, what proportion of S1 gas are you using, ONDC, and what would be the price, how does that move quarter on quarter?

In fact, there is no fixed allocation for the petrochemical gas. Whatever the best available for the petrochemical, we are allocating. There is no such standard allocation that these are to be from that. And so that the cost of production should be this. So whatever the market available, whatever the best available sources are there, we are allocating.

So there is no fixed benchmark which we can gauge before the quarter that it will be linked to a certain price. If the spot pressure is going down, it doesn't necessarily mean that the pet cam gas cost should go down.

Yeah, now it may go down depending upon the sourcing which are there, but primarily effect is on the prices which are there in the state's profitability. Because you know the price of the pet cam in comparison with the

2018-19 quarter it has it has down so these are the many reasons for this stress profitability then my last question would be when you see the blended tariffs for the transmission tariffs for this quarter they've jumped like three and a half four percent quarter on quarter because your volumes have gone down by four mms and but your revenue are more or less flattish so so Is there anything to do with any takeover pay or any tariff revision or anything of that sort has happened during this quarter or it's all normalized? There's nothing to read about it?

Tariff revision is always effective from the prospect. So the tariff revision which has been done will be effective from July only. So this quarter we are going to have effects of that. Earlier it was...

I'm saying this quarter also there has been some, so when we calculate the number, the tariff looks higher. So is there anything which could be ascribed to or it is just a normal thing which there's no explanation as such?

It is normal only. There is no, whatever the volume will increase, it will have incremental, but there is no C-power pay like that in practice. Thank you so much.

Thank you. Thank you.

Thank you. The next question is from the line of Sabri Hazarika from MK Global.

Please go ahead. Good evening, sir. First question is regarding, do you have any provisions in the natural gas transmission segment? Provisions here? In the sense that your revenues remain more or less same quarter on quarter, but your EBIT has gone up significantly. So was there any one-offs or anything in the other expense or anywhere?

the transmission, there is no such one-off in this quarter, is there?

No such one-off.

Give me one minute. There is no such one-off. It is only effect of the price revision only, which are there earlier. Nothing more.

Okay, sir. And secondly, in terms of the policy scenario, are you hearing anything in terms of standard power plants or GST for gas sector, anything of that sort? Or even allocation of new deep water gas which is coming up from KG Basin?

So far as the standard power plant revival is concerned, talks are going on with the ministry. And we are hopeful that something will be done based on the earlier policy. So these are there. Okay, and what about GST for gas? We are quite hopeful it will come. And I think now the government will be focusing on this GST inclusion. Major agenda might have been completed, so they may be focusing now on this. So I am quite hopeful that this will come up.

And lastly, about the new gas which is coming from RIL and ONGC, as well as some of the smaller sources like Kain, Rajasthan, Rampa, So are you looking at sourcing those volumes for marketing or anything of that sort?

That will be on the competitive price, so we will eye on that also whenever the opportunity comes.

But no allocation has been fixed to any sector, right?

No, that is not allocated volume. That is competitive volume. We have to bid for that. Sanjay, is it okay? Okay. Thank you so much. Thank you very much.

Thank you. The next question is from the line of Benakin Parikh from JP Morgan. Please go ahead.

Yeah, thank you very much for this opportunity, sir. So just two questions on the gas trading segment. So my first question is that just to understand the relationship between the gas trading segment and the pet chem segment, whatever gas is sourced by the trading segment, whether it's a U.S. contract or non-U.S. contract and supplied to the pet chem segment, Effectively, there would be a transfer pricing at market prices and the profitability on the trading segment will stand with the trading segment earnings while the PEDCAM segment will show the market price of cost. Would that understanding be clear?

No, no. Yeah, your understanding is little bit. I would like to say for that that there is no relation between your US volume sourcing as well as the PEDCAM. Whatever the best opportunity, this cost is there, we are allocating and we are sourcing for the pet cam. So per se, US volume is not only identified, we have other sources also like S1, like other, sometimes spot also, wherever the opportunity comes. So that way we are sourcing for the pet cam.

Understood. So just to carry forward on the trading segment, the gas trading EBITDA increased sharply on a quarter-on-quarter basis, even though the discount of the spot energy prices versus the implied Asia-landed Henry F. prices actually widened. Now, this implies that Gale is benefiting from the hedging it did last year. So for the remainder of the year F20 and F21, sir, across your Henry Hub portfolio, how much of your volumes have you hedged and how much is still open?

Sir, we can't give you the exact number, but the total for this year, for F520, we have already a sufficient amount of cargoes have been hedged. And we have, and going further also for next one year also, most of the cargoes have been hedged wherever required and booked wherever required. So it is a dynamic situation. We can't give you any specific number for that. It depends upon the market. It depends upon the opportunity. It depends upon the prices, which plays between the Brent as well as between the Henry Hub. So all these scenarios we are looking forward. And as you have noticed from our experience that from the last two years, we have increased or we have taken various measures to de-risk these volumes, U.S. volumes, etc. The result shows it is. So that way we are progressing.

Understood. And then to carry forward, is this quarter's EBITDA sustainable of 861 crores in the marketing segment?

I can't give you any specific numbers here. But please be very successful. We will be doing better, or we can say whatever the best will be there. Understood.

Thank you very much, sir. Thank you.

The next question is from the line of Amit Rustagi from UBS Securities. Please go ahead.

Sir, thanks for this opportunity. Could you elaborate how we are dividing or splitting the gay, as it has already been mentioned in the parliament as well as in the various forums by the relevant authorities. So what is the process we are going to apply and how it is going to be splitted?

As we have heard in the newspaper, we are also hearing in the newspaper, we have no such agenda for splitting or something like that. Many news are coming, so don't go by the news. If something will be there, we will inform you. Throw out a stock exchange at the right time. There is no such. These are the news, you know.

Yeah, but there was a statement made by a Honorable Minister in the Parliament where he mentioned the name of our company and he said that specific arrangements have been made to split the company and marketing and finance. transmission. So, without, you know, work being progressed, can they make a statement in Parliament like this?

I can't comment on the statement, but we don't have any official information.

Okay. And the second thing, if we look at our transmission volumes, so in India, last four years, the transmission volumes or the total consumption of gas has increased by around 34 mmCMD. So in FY16, the total gas demand was around 127, and this year we are ranging around 160. So 34 mmCMD increase, but if I see our transmission volumes, that has gone up from 92 mmCMD to only 105 mmCMD. So are we losing market share to the regional players or the regional pipeline networks massively In terms of the transmission business, what could be the reason that, so like someone mentioned about 73% of share. So I think our share in the total consumption has declined from 73% to 69% now. Only 12 MMCMD increase in our volumes versus total 34 MMCMD increase in the gas consumption in India. So the other players have got around 22 MMCMD volumes.

If you see from the last four or five quarters and if you compare now, the total volume has decreased in comparison with that. But our sale more or less remains the same and due to this stress, power plant and others which was there and low consumption in the other sector, this has impacted. But going forward, in the CGD and other segments, we are hopeful that this is going to increase further. where new CGDs are coming and new opportunities are coming, new fertilizer plants in the Urjaganga are coming. So in the going forward in the next year onwards, we are going to have more volume transmitted as illustrated.

Sir, how it is possible that overall we are seeing that a 34 mm CMD increase in the gas consumption in the country, at a country level, and our volume has not increased in last maybe... four or five quarters also. This quarter also, on a total basis, the gas demand has gone up, while our volume has declined.

So is that a structure issue?

Some of the volume we don't transport, but we sell directly. So that volume is not accounted for in the shipping or the transportation element that is being shown to you, number one. Number two, this quarter, there were a lot of shutdowns, So the effective volume was lower. Next quarter, you will see the incremental growth which is happening. And let me tell you, we have not lost our share. In fact, it would have only grown. And in the end of next quarter, you will see.

So maybe, like, we are not able to match the data of what you are saying.

I request sometime you come down here. We will share you, we will satisfy you, whatever the queries are there. With the facts and figures.

Yeah, sure, sir. And so just my last question, can you repeat the volumes of the gas marketing again, that how this 97 MMCMD volumes broke up?

12 billion is overseas volumes. 85 billion is domestic sales. Okay.

Thank you, Mr. Rustagi. The questioner will join the question key for any follow-ups as we have several participants waiting for their turn. The next question is from the line of Amit Shah from BNP Paribas. Please go ahead.

Hi. Thank you for the opportunity. Just one question. So are there any other shutdowns in the Petchem plant for the rest of this year or over the next 12 months?

No, there is no likely of any shutdowns.

So was the shutdown this time, was it planned or was it unplanned? It was mostly planned. Okay. And on the gas trading business, so until at what crude price are the hedges in place or is there something like that that you can say? Because I think last time I remember you having mentioned that until $55 of crude there is no real concern or something to that effect.

So there is a correlation between the Brent as well as the HH. We have to see the incremental where it is going. So it depends what is the price of the HH, what is the price of the Brent. And that way we are taking the forward and wherever required we are hedging. So that way we are very cautious and we have a team working for this. We are watching on daily basis what is the movement, what could be the forward, what could be the volume. where the volume is going to be. So all these scenarios are on daily basis. We can't give you any number or any scenario for these things. But the result shows that, but the result shows as you have seen that whatever the steps has been taken, it has given a good profitability in the gas trading.

No, no, absolutely. Last three quarters, you have actually kind of, you know, the numbers have been reasonably stable, too surprising positively. I know you cannot comment on the numbers, but would it be fair to say that depending on what you have done so far with the gas trading business, it's unlikely that on a queue-on-queue basis we suddenly see a 70% decline in profits or something dramatic like that? Is that something you can comment on? Or something like that is possible?

I can't comment that also, but... We are very cautious, and we are trying to have better realization, better spread, better bottom line, all these things. We are very cautious. We are taking steps for that. But any general comment, I can't give you on that.

Thank you. We'll move to the next question. That is from the line of Sanjay Mukim from Bank of America, Maryland. Please go ahead. Good evening, sir.

I have a couple of questions.

Please go ahead.

Yeah. Could you help reconcile the operating profit difference between the console accounts and the standalone account? Because most of it seems to be in the unallocated part. Could you give us some light on where the difference comes from?

You want the reconciliation between the consolidated as well as?

Yeah, the EBIT bit. What is the?

Yeah, yeah. That is in front of us that way. The gale is 1,288 crores and the consolidated is 1,501 crores. That is there. And on various subsidiaries and JVs which are there, we have plus, minus. So that way we have reconciled that.

We have reconciliation. Of course, sir. I was trying to figure out if there's any one or two major drivers of the additional gain you have on consolidation. City gas is one, but that extends only 50 crores.

That is MGL and PLL is there, which are there, which has affected. And PCPL also minus is there. IGL is also 54 crores. That way we have complete reconciliation. If you like, we can share this.

No, sir. I was trying to get to if you have any ENP-related gains here.

No, no, no. ENP is in our standalone.

Okay. All right. The second question is just a general question. Do you have any sort of one-offs in this quarter, not just in the transmission segment, but across the business? Any sort of one-off?

No, we don't have any one-offs. We don't have any major one-offs. Small things may be there, I can't say. But there is no such major one-offs.

Okay, sir. And lastly, could you give us an update on the phases of the Urjaganga pipeline? Where are they and when can we expect them to commission?

Yeah, yeah, sure. For Ujjaganga, as you know, that we have already reached Varanasi and we have already reached this Vatna. And the rest of the Damra Angul is already progressing. Dhobi Durgapur, Bokaro Angul and Durgapur Haldia. These are progressively having a good... physical progress of around more than 70% and we are hoping to complete by December 2020. So far as the Baroni Guwahati is concerned, the physical progress is around 26% and we are, as per our schedule, we are also going to complete by December 2021. So we are, as per our schedule, there is no such delay in this Urdhya Ganga program.

The next question is from the line of Vishnu Kumar from Spark Capital. Please go ahead.

Good evening and thanks for your time, sir. In terms of the gas trading division, the hedging gains that you book, is it possible that you transferred, let's say, 10 MMSEMD of volumes you've been sold, but you physically book more than the actual volumes that you transported?

No, no, no. No, we don't. See, I will tell you the hedging rule. Whatever the settlement is done in this quarter, which we have hedged earlier, that is accounted in our books. This is the difference between the purchase and sale. And wherever we have hedged, we have... So every hedging gain is booked, is backed by delivery. Yes, yes. Actual sale and purchase. Whatever you are seeing, it is the actual gain which are there.

Okay, sir. And next, just if you could explain the net movement in cash flow hedges. As of 19, the quarter was about 510 crores negative. Now it is 200 crores. If you could just explain the movement there. Which ones? In OCI, other comprehensive income. There is one line item called net movement and cash flow hedges, gain and loss. So between quarter on quarter, if I say the quarter ended March 19, it is minus 510. Now it is moved to minus 204. So if you could just explain the movement there.

Mainly because of the share price of ONGC, the main effect is around that only. Thank you. That OCI you are talking about, right? other comprehensive income you are talking. That is mainly on account of the difference between the prices, price movement of coin usage here.

Okay. And one last question, sir, on the PITCAM side.

May I request to join the question queue, sir? Okay, thank you. Thank you. The next question is from the line of Vidyadhar Pinte from ICICI Securities. Please go ahead.

Thanks. Good evening. My question was on if gas comes under GST, then what kind of benefit would there be for Gale in a full year?

See, Gale is not going to have any incremental benefit for that.

So if you get credit, no, no, what I'm saying is in pet cam and all, because if you get credit, will it, because in the past I think I was told about 200 to 2 billion rupees would be the benefit kind of thing.

See, this is a very hypothetical question because we can't quantify if this comes, what would be that way, but naturally the input tax credit will be there and it will indirectly pass on to the customers also in terms of the tariff and other things. So that way quantification can't be possible. But customer is going to be benefited overall. Suppose in the transmission line we are not getting the setup of the whatever the send rate credit is there. And if that is not there, then the tariff will be more that way. So these are... What about PET, Kim? Particular. Petchem is also... Some idea, some broad idea. Just you can tell.

Aarti is our GM taxation, he will explain. Credit will be available in Petchem, but it will depend what kind of gas we are going to use. Like, suppose imported gas is there. Already there is no bet on that component right now also. So it will depend on which part of gas is going to be used and what is the price. So number of factors are there, but sadly that it will be available.

Which will improve things for you compared to what it is today? Maybe. Okay, thanks. And the second question was regarding this gas trading volumes. I think what the numbers which you gave earlier, domestic RLNG, US LNG sold outside India, international didn't tie up to 97%. So, you could give a little more clarity or was there any spot LNG volumes traded and what was, if it was and how much was that volume? Some idea if you could.

No, we don't have traded any spot LNG.

Okay. So, because I think the numbers you gave earlier was 43 MMSCMD domestic, around 21, 22 RLNG, 12.5 sold in the international market, 5.5 sold in India. That ties up to about 83. So can you help us understand the balance 1314 MMSCMD?

Just one minute, I will give you the balance. Just one minute. See, total is 96 and overseas sales are 12.44. So balance domestic is 84.11. So can you give us the break-up of the domestic? APM is there PMT is there RLNG is 21.84 rest is domestic only domestic sources domestic sources thank you so next question that is on the line of Akshay Mani from Centrum Broking please go ahead hello yeah Akshay please go ahead thank you for the opportunity sir

So, just one question. So, in gas transmission segment, we are seeing a dip in depreciation on a queue-on-queue basis. Is there any specific reason for that?

As I have told that there was shutdown in the customer premises and that has yielded the... Depreciation. No, no, which way? Depreciation. Depreciation, you are asking? Hello?

Yes, depreciation, sir.

Okay, okay.

Okay. We have depreciated and we have capitalized and that has been capitalized in the books. R&M and other expenditure as per India's. Hello. Hello.

Yes, sir. So what would be the amount of

47 crores.

Okay, this is capitalized. This would be for which?

Can you repeat the question? Because there is a confusion.

Sir, this 47 crores is for what?

Sir, this is for what?

This was on account of the interest and overhauling charges, repair and maintenance. That was capitalized. Okay, okay, okay.

Thank you. The next question is from the line of Manisha Porwal from Taurus Mutual Fund. Please go ahead.

Good evening, sir. Sir, I just wanted to know your thoughts about the news that government is planning to phase out the gas distribution monopolies So they were planning some rules within the next six months. So can you just share your thoughts on the same as to how it will pan out for you and other players?

See, first of all, I would like to clarify we are not monopolistic, rather, because the domestic gas which are being produced are allocated by the government of India. we are purchasing the gas from the international market that are only on account of this. You are talking about the CGT?

Yeah, yeah, yeah, yeah.

Okay, okay. So, sorry, I could understand.

Mr. Sanjay Kumari would like to say. Yeah, so in this case, what regulator has done, PNGRB has issued a concept paper through which they would, you know, like to start, you know, open access in the CGD networks. That concept paper is on their website and they have invited comments. We still think it is a very complicated matter and may not be so easy to implement, but if it happens it will help in expanding the market in the country. Just for information, Gail as a standalone player has only six CGD. Gale gas has got many, you know, some 20, 30 CGD entities, licenses. But the effect will be for all of them. In fact, Gale's operations are younger ones. The old, you know, CGD entities have more to probably worry about.

Okay. Okay. Okay, fine, sir. Thanks. That's it. That's it.

Thank you. Thank you. The next question is from the line of Nitin Tiwari from Antique Stock. Please go ahead.

Hi, sir. Good evening. Thanks for taking my question. It's related to the transmission segment. Given there were shutdowns in this quarter on basically the customer side, so are there any shape of pay, basically transactions that are booked in this quarter which has led to increase in average tariffs? One is that.

These were the plants that are down mostly. So there is no major... No, no, Seaport. Seaport. Seaport.

Did you book anything in this quarter? Because if they didn't take offtake in this quarter due to plant shutdown, did you book anything in this quarter?

No, no, we didn't book anything because these were the plants that are down.

These were the plants that are down. So as per this, we have done it and... And the second question is related to the Urja Ganga project. This is sort of a hypothetical question, and I want some clarification around. So when the Urja Ganga is fully commissioned and the gas is transported from, say, Gujarat to Haldia or towards East India, so given we are still following the zonal tariff structure, in that case, because of this application of zonal tariffs, by the time it reaches, of course, the last zone of the Urja Ganga, the tariffs would be meaningfully higher. So would that lead to increase in the overall average tariff relations for us as a company because of this structure and because of the long distance of transportation? Is that the right understanding?

As you know, the Phase 1 JSBDPR Ujjadanga tariff has been already announced. And when the commissioning of the Phase 2 and 3 will be there... By that time, we are hopeful that there will be unified tariff like that because if the incremental tariff will be there, then possibly there will be higher cost to the customer. So what we are expecting that there will be some unified tariff which are on the agenda of the P&GRB and possibly we are hoping that way it will be settled.

So you are saying that we can have unified tariffs before December 2020?

I can't give you the timeline, but we are quite hopeful that whenever the progress of this thing, PNGRB itself will take their risk. Because this is in the interest of the PNGRB as well as in the interest of the customers.

Also, sir, the zonal tariff rules are very flexible. So, you know, only one-sided approach. There could be other solutions. Yes, yes.

Okay, okay. All right. All right. Thank you, sir.

Thank you. Thank you. Thank you. Next question is from the line of Rohit Ahuja from BOV Capital. Please go ahead.

Thank you for your question again. Sir, on the petrochemicals, you mentioned that the lowest cost gas from whichever source is available is transferred to the pet chem plant. Right? Yeah. And secondly, your LPG business earnings have been very good this quarter. So are we using only domestic gas there or have we used any spot energy volumes also over there?

In the LPG segments mostly domestic gas is being used mostly and in the petrochemical it is other than the domestic gas because there is no allocation for the petrochemical segment or petrochemical plant.

Okay. Thank you, sir.

Thank you. Thank you. The next question is from the line of Dagan Dixit from Millara Capital. Please go ahead.

Yeah. Thanks for taking my question. Sir, I have a query about this deepwater gas pricing. So as you know, now the Reliance is also coming with the next year with lots of gas and also NGC, so they might come for the bidding of those gases. But now deepwater gas price is around $9.3, while spot LNG is $4. So So, I recall that for S1 gas, when it was offered, it was offered at some $1 to $2 discount over the deepwater price. That's what we did. So, now you think that it can be something $4 to $5 of the discount, mostly more or less in line with the SPOT LMG?

We can't give you any number because entirely different stories are there. And it depends upon, again, the consumption and demand which are there. And so far as the spot prices are concerned, these are not the price. These we can't take as a benchmark for that. It is seasonal price only. So whatever the bidding will be there, demand will be there, cost will be there of the producer, that will determine the prices of this deep water.

Yeah, but I thought, sir, at present scenario, if anyway it's better always the spot LNG as compared to the defaulted price, whatever the discount.

That thought we have also, but we can't comment on that.

Yeah. Has the alliance started bidding for the gas? Because I think some gas is coming there.

I think not. We have not received any such communication or such information.

Okay. That's from my side.

Thanks. Thank you.

Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for their closing comments. Thank you and over to you.

Thank you very much for Mr. Nilesh and good interaction and we have tried to clarify all the points which were there and from the management side we can only say that we will We are trying to maximize the top and bottom line in a better way. Our total team is dedicated for that. So whatever the best could be there, we are doing, considering the market situation, considering whatever the prices are there for various types of gases. We are doing hedging. We are in the process of achieving all the projects which are there. So all these from the management, we are taking all these steps to have better presence in all the segments wherever required. So thank you very much. Thanks a lot.

Thank you very much. Ladies and gentlemen, on behalf of HDFC Securities, that concludes this conference. Thank you all for joining us. And even now, just connect your lines. Thank you. Thank you.