Industry Odisha Bureau, Sep 29: Dahej’s regasification capacity has grown sharply. But costly spot LNG could leave more of it idle in FY27. Improving capacity utilisation now depends on cheaper gas and firmer demand.
Petronet LNG has built more capacity, but demand may take time to follow. Its Dahej terminal can now handle 22.5 million tonnes per annum (mtpa). That is up from 17.5 mtpa at the end of FY26. Yet more capacity does not mean more gas flowing through it. The gap between the two now depends largely on LNG prices.
A utilisation dip
Motilal Oswal Financial Services expects Dahej utilisation to fall to 70% in FY27. It stood at 91% in FY26. The brokerage sees a partial recovery to 82% in FY28.
Elevated spot LNG prices explain much of the dip. They have discouraged customers from signing up for extra long-term volumes. Costly imported gas strains industrial budgets and weakens regasification demand.
Waiting for cheaper gas
Relief may come from abroad. JM Financial Institutional Securities expects spot LNG prices to moderate from FY28. It sees significant new global liquefaction capacity arriving over the next 12–18 months.
Cheaper LNG could restore affordability for industrial consumers. That would help Petronet put its new Dahej capacity to work. Motilal Oswal expects Dahej volumes to climb to 18.5 mtpa in FY28, from 15.8 mtpa. Even then, throughput would sit well below the terminal’s 22.5 mtpa capacity.
Kochi’s slow build
Kochi offers a smaller but growing second engine. Motilal Oswal expects its volumes to rise to 1.5 mtpa in FY28, from 1.3 mtpa.
JM Financial is more upbeat over a longer horizon. It sees Kochi volumes rising from 1.2 mtpa in FY27 to 2.7 mtpa by FY29. Pipeline connectivity to Bengaluru underpins that view. The link ties Kochi to the national gas grid. A terminal without pipeline reach cannot easily serve distant customers.
The upside of dear gas
Expensive LNG is not all bad news for Petronet. It can hurt regasification volumes, yet lift trading and inventory gains. JM Financial raised its FY27 Ebitda estimate by 14.5% on that basis. These gains, however, differ from steady terminal income. They depend on price conditions that may not last.
The Qatar question
At Kochi, management briefed visiting analysts on the 7.5 mtpa Qatar volumes. The tariff will not fall below the current level, it said. The final structure, however, is still under discussion.
A heavier balance sheet
Petronet’s ambitions stretch beyond regasification. HDFC Securities says it is investing about ₹30,000 crore across several projects. These include a petrochemical complex, LNG capacity, compressed biogas (CBG) and infrastructure.
HDFC Securities expects the balance sheet to swing from net cash to net debt. It sees FY26 net cash of ₹729 crore becoming ₹4,160 crore net debt by FY30E. Growth, in other words, now carries a financing cost.
Petronet shares have risen just 3% over the past year. They trade at 11 times FY27 estimated earnings, according to Bloomberg.
Filling the terminals
Petronet’s next test is not building capacity but filling it. Trading gains may cushion a weaker FY27. Durable returns, though, rest on improving capacity utilisation at Dahej and Kochi. Cheaper LNG, steady volumes and disciplined spending will shape that outcome. Investors will watch how much new capacity turns into lasting earnings.
