GAIL (India) Limited

Ladies and gentlemen, good day and welcome to the Q2 FY22 Earnings Conference Call of Gale India Limited hosted by Alara Securities Pvt. Ltd. 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Gagan Dixit from Alara Securities Pvt. Ltd. Thank you and over to you, sir.

Yes, thank you. A very warm welcome to everyone and happy Diwali to all. It is our pleasure to be able to bring to you the management of Gale, led by Sri A. K. Tiwari, Director of Finance, Sri R. K. Jain, ED FNA, Sri Shashi Menon, ED FNA, Sri R. K. Singhal, he is an ED Business Development and ENP, and Sri A. Kaviraj, he is ED Marketing. We would also like this opportunity to congratulate the management on its excellent set of numbers. So with these words, I would now hand over the conference to the Gail management. Over to you, sir.

Thank you. Thank you very much. Good afternoon, Gagan, from Ilara Securities, and my dear friends from investors and analyst community connected through phone call. A very warm welcome to Gail's earning call for Q2 FY22. Wish you all a very happy Dhanteras and very happy and safe Deepavali. May this season of festivities bring cheers, health and prosperity to your life and to the life of your family. We are thankful to you all for showing keen interest in the performance of Gail. The result of second quarter and half-year results have been declared earlier today, and I am sure you must be happy with the Gale's performance. I take pleasure to state that in H1, FY22, Gale has achieved highest ever half-yearly turnover, PBT, and FAT. Now I would like to give you a brief insight of the company's performance for the quarter and half year ending 30th September 2021. I would like to first start with physical performance. During the quarter the physical performance of the company has improved across all business segments mainly driven by higher demand in gas segment and better plant operation in petrochemical segment. Gas marketing increased to 97.72 MMSCMD in Q2 FY22 as against 95.95 MMSCMD in Q1 FY23, increase of 2%. Yale has entered into various long-term LNG contracts to meet increase in demand of natural gas in the country. As some of the anticipated demand did not stratify in the past year, Gale was selling some of its volumes in the overseas market. As the demand of the gas in the country is increasing, more and more of the long-term LNG is being brought to India. During the current quarter, the sale of RLNG has increased resulting in better physical performance of gas marketing segment. In fact, during the quarter, only 8 cargoes were sold overseas as against 14 cargoes in the previous quarter. Due to increased gas demand in the domestic market, the natural gas marketing increased to 114.32 MMS GMT in Q2 FY22 as against 107.66 MMSMD in Q1 FY22. Increase of 6%. The capacity utilization increased to 55% in Q2 FY22 as against 52% in Q1 FY22. The MATICS, presently the MATICS RFCL are running on full capacity with the commissioning of XURL plant and attaining full capacity by mid-22. The volume would further increase by approx. 6 mm CMT. Polymer production is stood at 216 TMT in Q2-FI22 as against 133 TMT in Q1-FI22, increase of 62%. There have been apprehension in the past over the reliability of the petrochemical plant. Last year we achieved over 100% capacity utilization and the plant is currently running smoothly at more than 100% capacity and we are confident to achieve 100% production capacity this year also. Polymers have increased to 221 TMT in Q2 FY22 as against 130 TMT in Q1 FY23 increase of 60%. Similarly, the LSC stood at 262 TMT in Q2 FY22 as against 250 TMT in Q1 FY22. The capacity utilization increased to 74% as against 69% in LSC segment. Similarly, the LPG transmission also had the sustained growth and the capacity utilization was 110% in this quarter. Let us now move on to the financial highlight. Gale achieved gross turnover of 21,477 crore in the current quarter as against 17,352 crore in Q1 FY22. There is an increase of 24% mainly due to increase in the natural gas marketing volume, higher natural gas prices, increase in the petrochemical sales, electricity, etc. Dividend stood at 3682 crores in Q2 FY22 as against 2054 crores in Q1 FY22, increase of 79%, mainly due to all around better physical performance, improved gas marketing spread, better prices in petrochemical analysis, improved petrochemical operating efficiency and increase in the other income, mainly dividend of 465 crores. The gas marketing segment showed a robust performance and the profit increased by around 189%. Similarly, the pack jumped to 2863 crores in Q2 FY22 as against 1530 crores in Q1 FY22. On a half-yearly basis, gale clock turnover of 38,829 crores as against 25,671 crores. In X1 of the last year, resisting increase of 51%. The PVT increased by 201% to 5,763 crores as against 1,907 crores. That also jumped to 4,393 crores. for the half year as against 1,495 gross mainly due to robust performance of energy marketing segment better average price realization in PC and LHC which is in comparison with the last H1 is 27,000 per metric in case of the petrochemical and 17,600 per metric ton in case of the LHC. On consolidated basis the turnover in H1 In H1, FY22 is 39,290 crores as against 25,926 crores, jump of 52%. The PVT in H1 is 6,268 crores as against 2,161 crores. And the PAT is 5,021 crores as against 1,766 crores. During the quarter, Gale received 22 LNG cargoes from US, 14 from Seven Pass and 8 from DCP. As per the cargo plan, out of these, only 8 cargoes were sold in overseas market and the remaining cargoes were brought to India either directly or through destination swap. Up to H1, 44 cargoes were sold, were brought and in the international market we have sold 20 cargos up to H1. On the CGD front, GAIL is supplying gas to all CGD with infrastructure of 81 CNG stations and the cumulative DPNG connection is 148,000. And the tapas spent so far is more than 1,000 crores. I'm happy to announce that the GAIL CGD business has become profitable during the current quarter. On GAIL gas, during the Q2 FY22, the gross turnover, gross revenue from operation is today 1,478 crores as against 1,212 crores. And PVT is 105 crores as against 72 crores. and PAT is 78 crores as against 53 crores. Gale gas along with the JVs subsidiary has infrastructure of 725,000 DPMG connection and 262 PNG stations. This year Gale achieved capex of 3180 crores up to September 21 mainly on pipeline, equity contribution, CGD project, petrochemical, operational capex, PMP etc. We have a plan to spend across 7,400 crores in current FY financial year and mainly in pipeline, equity and petrochemical. On Pradhan Mantri Urjaganga the total commitment is over 15,400 crores. And actual capex till date FY22 is 12,221 crores. We have been receiving the capital grant from the government regularly until the total capital grant received is 4,487 crores against the total capital grant of 5,176 crores. The GAIL along with its JV is executing pipeline project of 7,500 kilometers with a total investment of around 37,000 crores. GAIL is executing PP project at Pata and Usar with a total cost of 10,000 crores and the EPMC contract license selection has been done and work on the project is going as per schedule. On CSR fund, Gale focused on the CSR program in the area of health, sanitation, education, skill development. The total spending of Gale on CSR project is more than minimum mandate of 2%. On safety part, zero major reportable accident, incident during last five years and our HSE score is 97.3. as again the excellent target of 95. Gale due its presence in the natural gas play an instrumental role in transiting towards a low carbon economy. The complete special emphasis on environment and sustainability. Some of the key achievement during the past quarter in the area of sustainability are Certificate of Appreciation received from New Okla Industrial Development Authorities Development of the Organic West Composite Plant at Gale, Bhagodia and Gale participated in concentration and launch low carbon and climate resilient pathway for the Indian public sector enterprises. Various measures have been taken in the digitization and which includes all the stakeholders management suppliers, contractors, employees, even the retired employees. So that's the brief introduction on the financial results and the major highlights of the company. Yale management team is present here and to clarify any points that you may have. Over to you, sir.

Hello. Hello.

Hello.

Yes, sir.

I am finished, madam.

Thank you very much. Shall we start with the question and answer session? Sure. 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 the 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 and a request to all participants to please limit the questions to two per participant. If you have a follow-up question, you may rejoin the queue. The first question is from the line of Prabhasin from Centrum Broking. Please go ahead.

Thank you very much for the opportunity. Congrats on the great set of numbers, sir. Two questions.

One, as far as gas trading is concerned, while this quarter growth anyways is very, very strong, but looking at the kind of differential that we are now seeing for the second half, it has only widened even further. Is it too simplistic to assume that results will get even stronger, at least for this segment?

Or is it that whatever even unhinged or opportunistic volumes you had, you have already sold well in advance at a certain price. And therefore, the gains could be limited to somewhere near this quarter's performance. Any color you can throw on that.

So, thank you very much for this question and as I have clarified in number of calls and during discussion that we have different portfolio as well as we have different synergies to mitigate the risk. And this shows the results, shows that what action they have taken. I can only say that whatever result you are seeing in the gas trading, we'll take all measures to maintain it. And to my mind, it will be better and it will be sustained. And all risk mitigation measures, including international sales whatever the opportunity comes that management is taking and we rest assure that this segment will go further okay The second question was with respect to the LPG segments. Now, is it fair to say that while international prices seem to have ramped up a little bit higher, the domestic LPG prices don't really reflect that at least in this quarter? What I am asking is in Q3 will we likely see a much stronger realization performance which should help offset the higher domestic gas cost to a certain extent? Is that a fair way to look at it? Yes, it will be better because our price phase as you have seen that are better or good and and with the cost which is going to increase that will be compensated in the price which we expect will be increased further. So that way this will be a sustained segment for realization as well as growth and financials. So, sir, despite the domestic gas cost increase that is happening from October, we do not expect any material dip in terms of profitability of this segment. Is that fair based on what we see today? Not much. It will be insignificant, you can say. Okay. Got it, sir. I will come back. Given the rule of two questions, I will come back if I may. Thank you so much. Thank you.

Thank you. The next question is from the line of Tanaka and from JP Marvin. Please go ahead.

Yeah, thank you very much, sir. So just trying to understand the gas marketing segment because clearly while the company sold less cargos overseas in this quarter 8 versus 12, the EBITDA on a quarter-on-quarter basis has tripled. Now at this point of time, sir, can you tell us that for the remainder of the year, are there any unhedged cargos which need to be sold because spot LNG remains stubbornly above $30 MMBTU. And if there are unedged cargoes, then should we expect a windfall in the second half? Or is this the level of EBITDA that we can expect to maintain in the second half? How should we look at this segment, sir?

See, as I have already explained, that this segment is a volatile segment. And we have taken various measures. The result shows that What I can say that various measures which we have taken, the sustained EBITDA will be there. Our performance in terms of the financials for this gas marketing segment will almost be better or we can say that it will be sustained as well as it will be improved because gas consumption in the country is increasing. We are not selling some of the cargoes or many cargoes as we have been selling in the international market. So that way these synergies we are evaluating and depending upon the market, depending upon the consumption in the country and opportunity which we are finding time and again. We are taking decisions that way.

Understood, sir. So, moving on to the pet camp segment, this has also been a volatile segment. Now, pet camp end product prices have broadly inched up slightly, but the gas-based pet camp producers obviously have seen margin compression given the way gas costs have surged. Now, for Gale, given the gas mix that it uses in pet camp between Brent Link spot prices, How should the input cost inflation in the pet chem business play out over the second half of the year?

I think what we expect that whatever the margin we have seen in the petrochemical segment, we are going to maintain that way. With the big cost, with the portfolio we have for different indexation of the gas,

that we are going to maintain and that way we will be sure thank you very much sir thank you thank you the next question is from the line of nitin tivari from yes securities please go ahead uh and thanks for the opportunity uh and congratulations on very good set of numbers uh really strong profitability in this quarter uh so my question is actually related to uh the news uh which came up a couple of days back regarding a hydrogen uh plan that gail is evaluating so just wanted your thoughts on the uh on on on that piece of news so is this a part of your csr activity or this is a serious attempt to foray into the renewable space and if yes then what is the kind of capacity we are looking at as far as this plant is concerned timeline If you can just share some thoughts on that and how does this integrate with our entire natural gas business. So your thoughts on that please.

First of all thank you very much. First of all this is not CSR business. We want to clarify and the technologies in the hydrogen that is going up we are evaluating. We have a big plan and we will share the details in the subsequent period. We have not tied up many screws in that. Give us some time and we'll share with you. We are in the process of evaluation. All the technicalities which are there has not been freezed. So many, what we will go, where is the place, whether Bijaypur or FATA or some other places, how to inject. how the technology responds, all these things we are evaluating. So give us some time, we'll share with you, but definitely this is not CSR.

Sure, sir. Thank you so much. That was the only question. And, sir, my best wishes for Diwali to the entire GL team and to you. And, yeah, thank you, sir.

Thanks. Thank you. The next question is from the line of S. Ramesh from Nirmal Bank. Please go ahead.

Good evening and thank you very much.

My first thought is in terms of your current quarters number, second quarter numbers, is there any inventory gain you have booked in the gas marketing business?

No, no.

So in terms of your hedging strategy, it used to be about 30% now. Does it make sense to increase the proportion of hedging for your U.S. gas business given that prices have, you know, hit a certain high. What is your thought on that? Can you repeat the question once again? So, I'm asking about your hedging strategy. You know, I understand that you hedge about 30% of your, you know, U.S. energy volume. So, does it make sense to increase the share of the volumes you hedge and what are your thoughts on it given that Brenton energy prices are at, you know, high levels? How do you see the hedging strategy going forward? see hedging strategy is dynamic strategy nothing can be static it depends upon the cargoes underlying assets which are available to us prices and so many other things but going forward we take a view on the coming six months one year whatever is there and that way depending upon the positioning of the cargoes as well as uh consumption we take decision for that so That way, I cannot give any specific strategy for that. It is a dynamic, but we always build the synergy for that, whatever we do. That is the first and foremost thing. One last part.

In terms of the current concern about the high gas prices hurting demand, are you seeing any contraction in demand in the Indian market because of the high spot gas prices?

Now do you see that shaping up in the second half of the year even the current price? I think our demand is increasing as result has shown and I have already explained during my this that in the coming quarter or maybe six months or so further consumption is increasing. So demand is increasing with the CGDs with the fertilizers and all are coming. So I don't foresee yet present any slash in the demand. It will increase. Okay, thank you very much. I joined the queue and it's all. Thank you, sir. Thank you.

Thank you. The next question is from the line of Vidyadhar Ginde, Ginde from ICSA Securities. Please go ahead.

Thank you. So my first question is on gas transmission. Can you give some color on the likely gas transmission volume in next year, FY23, and status of the Urza Ganga commissioning and what kind of volumes that pipeline may do next year?

Okay, gas volume for transmission you asked?

Yeah.

So that has increased in comparison with the last quarter 107 mm CMT. I think it is now 114 mm CMT. And if you see the H1 versus H1, it is now 111 against the 98. So that way the gas volume is increasing and with the coming of the various plants along with the Urjaganga, as you know that the Matic Fertilizer and the HURL, Sindhri, Baroni Matic Fertilizer is already drawing gas. HURL, Sindhri, Baroni, Gorapur, they are in the process of drawing gas. So that way the demand will increase and the transmission volume will further increase. could you give us some color on 5% growth and what kind of I can give the quantity which from the present of 114 it will it may go to 120 around average for next year is it and what about the utilization of commission schedule and what kind of utilization modules that pipeline may have next year that project I have already shared that that project is under advanced stage of completion. And so far, first phase is already commissioned. Second phase is now the process of advanced stage of commissioning. So that way, project is going scheduled ahead. Against the 16 MMACMD, we are hoping that it will be further at least 50% utilization. Next year, 50% utilization, right? It will graph up slowly and gradually.

By end of next year, it will ramp up to 50.

Yeah, it will be around 30% or maybe 75% like that.

75% utilization by end of next year?

Yes.

Last question on the gas marketing side. So is it correct to assume that in the second half of the year, the winter, northern hemisphere winter, the cargoes which you have kept Those cargoes tend to be on the higher side and is that the case even this year that the number of cargoes you are likely to sell at spot prices are going to be much higher in second half than they were in the first half?

See, gas marketing is very dynamic. I think no straight answer can be given and spot is the price but spot is not the procurement. it also takes time to tie up the means cargos and all these things are there. So, depending upon the situation we have already lined up many strategies and that way I can only say that whatever the margin we have reported we are going to maintain it and it may further increase. Thank you. Thank you very much. Thank you.

Thank you. The next question is from the line of Amit Rastogi from UBS Securities.

Please call it. Sir, thank you for giving me opportunity. Sir, CGDs have been asking for more allocation of gas because the demand is also increasing in the CNG and the residential which you classify as priority sector. Do you think that can be done in the coming quarters and more gas can be – more domestic gas can be allocated to the CGDs either in the change of formula or some other sources?

I can't specifically answer this question because government is taking decision on that and surely the growth in the CGD sector is ramping up. Definitely there will be cut somewhere and there will be allocation of these volume in the CGD sectors. So I think that decision is under process and the government is taking a very considered view on that. If something comes in writing, I will share.

Okay. And the second question relates to the LNG procurement for power sector. So obviously with these kind of prices, there would have been some dip in the consumption. But do you think that because of the power shortage issue, there will be more imports by the power sector for LNG in the coming process?

It depends upon the prices which they will procure and since the prices and the cost and generation cost will be higher if the prices are higher. So I can't say that there will be more and more demand in the power sector, particularly for LNGs. So that way we have to see the prices and the consumption and the unit cost production and further spending. So all these synergies will be there. To my mind, higher prices are not going to attract more demand in the power sector.

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

Hi, sir. Congrats for a good set of numbers. Regarding your volumes from Gazprom, where are we currently? I mean, when does this, so basically you'll have a ramp up to 2.5 million tons every year ramp up. So where are we currently and when is the next uptick in the volumes expected?

Gazprom. We will be reaching the plateau level in calendar year 2023.

So the plateau of 2.5 billion? Yeah. So currently we are at what, 1.5? No, around 2. Okay, so it increases every calendar.

So next revision will come in?

Next calendar year and after that 23 calendar year. So, we are at 2. So, this incremental by what number it is? So, 2 will go in January 22. For 22 we will be touching 40 and actual peak is 2.8 not 2.5. Okay, okay. 2.8 is the peak and not 2.8.

So, in calendar year 2022, we will be getting anywhere between 36 to 40. 36 to 40? Well, this would be what the price is. What would be the current price? These are formula based, so it varies. Okay. So, it's crude length, is it?

Yeah, it's crude length. Okay. Then secondly regarding the transition volume just wanted to clarify you said 114 mm that is the current rate now as well right or is it higher or lower?

No, that is the current rate or last but 114. So, now currently also it would be running at similar levels or it should be. It will ramp up it will further increase we expect.

Okay.

My last question is on this Qatar cargo which we have been pending for a long time and we are fighting for getting it. Is there any scope of that cargo coming to us given the crisis scenario? I don't think Qatar would be obviously ready to do it. Is there any case which we have or it can get postponed to say for coming years?

Yeah, this is a contractual matter between Qatar and QatarGas. We are uptakers from PLL. So, we have requested PLL to take it up with QatarGas. The discussions are ongoing. So, we have to wait for some more time to know the clarity. Okay.

Can the current volumes of Qatar are... May I request you to please rejoin the queue? We have participants.

Thank you so much. I will come back.

The next question is from the line of Mayank Maheshwari from Morgan Stanley. Please go ahead.

Hi, sir. Just two questions from my end. One was related to the petrochemical division. If you see your ASPs have gone up quarter on quarter this quarter versus if you look at regionally, ASPs have been lower. Anything that you can throw light on what has caused this?

I could not get. What is ASP?

Sorry, your prices for petrochemicals have gone up quarter on quarter by about 5% if you look at in the second quarter, while regional prices had come down on a quarter on quarter basis. So I was just trying to understand what has happened, if you can just help us understand.

The prices, quantity, and our production is around 100% plus. So that way the... it has resulted in a better realization. I think if the prices are on the same range, it will be our bet can be on the same.

Okay. And the second question was more on the cash flow from the consolidated basis. You had seen a significant increase if I look at the numbers on the I think when you look at page 17, if you just look at that, there is a significant increase in your trade and other receivables. Is there something specific that's happened in the first half?

Trade and other receivables?

Yeah, under the changes in working capital, it's close to around 4,500 crores.

Just one minute. Mayank, we will clarify in detail subsequently.

Okay, perfect. Thank you, sir.

Our IR team will clarify. Sure. Thank you.

The next question is from the line of Abhinav Daivali from Macquarie. Please go ahead.

Yeah.

Mr. Abhinav, please go ahead with the question. Your line is unmuted. Mr. Abhinav, may we request you to unmute yourself if muted from your handset? As there is no response from the line, we'll move to the next question, which is from the line of Vartharajan Sivashankaran from Antic Limited.

Please go ahead. Hello.

Yeah, please go ahead.

Your LPG production has been little inconsistent. What should be the number we should go with and what to be cases?

LPG production you are asking?

Production.

Yeah. So that way it is around 74% our total LPG production and that way we are maintaining into that range.

We should use that as a benchmark for the next year or two, or you just go for it to increase?

It depends upon the demand and whatever the mix are there, that's what we'll do. I think it will be on that range of gas availability. And gas availability, that's it.

That's what we'll do. Okay. And once again on this, volume growth, which you were referring to, is increased. in the transmission volume.

That is only specific to the that particular pipeline plus your HBG or you are talking about the overall volume itself will be only that much. You don't see any increase.

Mainly in the GHB DPL and fertilizers consumption as well as growth in the CGD.

You want to know the other upcoming pipelines? Yeah, other pipelines do you see any increase?

No, other pipelines are under execution that is Sirkakulam, Angol pipeline and then you have our Mumbai Jasugoda pipeline these are under execution that way but only the RT pipelines. So, around 5000 kilometers of the pipeline are under execution.

I was more focused on this. Do you see some volumes going up there?

Yeah. Any visibility?

Yeah, yeah. How much is the volume? It is complete and commissioned, but I think 3mm is in there. 2.5 is there. And with the further growth, it will be ramped up. So, I think... Any guidance on that? So that pipeline is whatever the CGD and other other plants also which are yet to start up.

So they will start taking up. It has the potential to go up, but as of now, it will take a little while. So we should go with around 203 to be the base.

Four to five maximum in the coming one year. But we are trying that it will be utilized further.

Thank you.

Thank you. The next question is from the line of from MK Global. Please go ahead.

Yeah, good afternoon, sir. So the first question is actually it's a follow up to an earlier question. So if I look into your NPG realization versus the Arab Gulf benchmark, so this quarter, I mean, due to the discount to Arab Gulf has increased significantly. And in a similar way, the petrochemical realization premium to South Korea benchmark, I mean, Southeast Asia benchmark, polyethylene has actually expanded significantly. So anything particular or a particular... behind this? In petrochemical sector prices depend on the demand and supply at India also in addition to the prices linked with the IPV. So if in India demand is very good and production is less and availability of imported material was less so that's why we were able to get the better realization here. Got it. So it's the Indian premium.

So on LPG also, is it a similar dynamic?

Because again... LPG is going to IPP and we are supplying our LPG to these oil marketing companies and that price is fixed. Because if I compare your LPG numbers with last quarter, for example, last quarter, Arab Gulf Saudi Aramco Arab Gulf was around 550 and you did around 530. So there's a 4% discount. That has actually become 11% in Q2.

Actually, it always is a one month lag. You may be comparing with that. Otherwise, it exactly follows the Arab Gulf index.

Okay. No, actually, we've taken it that way, but it has actually fluctuated in the last few quarters. It actually follows the Arab Gulf index. The IOC, which is the for working out the LPG price, works out an import parity price based on Arafgulf.

Therefore, there is no reason that it will be at a discount. It actually follows the Arafgulf price.

Okay. Okay. That's all. Thank you so much.

Thank you. The next question is from the line of Puneet Gulati from HSBC. Please go ahead.

Yeah, thank you so much for the opportunity. Of your total transmission volume, which went up from 108 to 114, so six additional, where did the six go? Any large customers that you can ascribe this additional six million cubic meters?

This is mainly because the Matic fertilizer has got commissioned in August and it has ramped up to almost full capacity very fast. And secondly, there is... Matrix taking?

Matrix. Matrix fertilizer is one.

Another... There is no demand in the power sector during these summer months. And that is a permanent phenomenon. Every year, we see some power demand during these summer months, which has happened this year also. Okay. And for the... After the lockdown has opened, especially after June, the industrial demand and the CGD demand has risen very fast.

And the four fertilizer plants which have partially started consuming, how more can they still take from the current levels?

Currently, Gorakhpur is under commissioning and we understand it is going to get commissioned very shortly. We cannot specify the exact time. And Baroni and Sindhri, they have not yet started consuming, but they will start taking pre-commissioning very shortly.

Our pipeline is ready and they are in the pre-commissioning stage. So that way it will ramp up.

Okay. So basically Gorakhpur, Baroni, Sindhri have still not consuming anything or are they consuming some little?

Some little they are consuming.

How much more will they consume once they reach full capacity?

It will be around 6. On 3 put together or about 12? No, Gorakhpur, Baroni and Sandeep.

Okay, that's very helpful. Any color can you give? What percentage of your cargoes are hedged for the second half of this fiscal year?

I have already told many times that Don't follow the heading, we have different synergies, we have different opportunities, we have different risk mitigation measures. What you look that our gas marketing is spread and marketing margins would be up, that should be the benchmark and that we are trying to achieve that way. Cargo-wise we can't give you and that is not possible. We have different scenario. We don't know. Any opportunity comes, we'll sell if we get better price. So that market dynamics are there. Please try to understand. Don't go too much in detail about the hedging. We'll give you the better result we are giving. I think that should be the spirit.

Thank you. The next question is from the line of Sarkar Jain from CLSA. Please go ahead. Sarkar Jain, please go ahead. Your line is unmuted.

Hi. Can you hear me?

Yes, we can.

Yeah, so I wanted to specifically ask for petrochemicals. Now, for petrochemicals, is it correct to understand that the volumes that are required in terms of MNG Almost all of it is coming from long-term energy, whether it is your cargos from Russia or is it the Qatar gas. You're not really forced to use any spot over there. Is that the right understanding?

Yeah, we have different portfolios we are using for our petrochemicals.

My question is, are you being forced to use any of spot or not required? It's either your US gas or

It is not required. We have long-term and different intersections. That will be our synergy.

Okay. And beyond the U.S. gas, even this gas from Russia, et cetera, is there a long-term contract for that, or that's something where you have medium-term contract for me, which I mean the volumes, if I understand. Have they gone to the full extent, which was originally planned because it was expected to increase every year?

Yeah, that Gazprom is there. We have explained that.

Because Gazprom is still ramping up, we have another increase in the supply next year, January 22, and then thereafter finally at January 23. So January 22, it will be 2.5, and January 23 will be 2.8. That's the maximum.

Okay. Thank you. Sorry, I might have missed that. Thank you so much.

Thank you. Ladies and gentlemen, this was the last question for today. I would now like to hand the conference over to Mr. Gagan Dixit for closing comments.

Yeah. Thanks for all the participants and a special thanks to Tiwari sir for sharing his views on the company's second quarter performance. And again, happy Tiwari to all. Any closing comments, Tiwari sir?

Yes, sir. Thank you very much. First of all, again, thanks and I enjoyed the discussing with you I will be supplementing next month as you know and this was the last quarterly financial result then I am discussing with you as a director of finance of Gale I will be leaving Gale at a high note and expect further better performance I am very thankful to each and every connected here for their support and faith and confidence on Gale management I'm sure that you will continue to provide similar support in times to come. I once again thank you very much for this meeting, for this call. Thank you. Thank you very much once again. Thanks. Yeah, you can disconnect the call now, sir.

Thank you. On behalf of Alara Securities Private Limited, that concludes the conference call. Thank you for joining us, and you may now disconnect your lines.