Increase investments in renewables; looking at 3GW clean energy by 2030
Geetanjali Minhas | May 31, 2022 | Mumbai
GAIL has said that it expects to monetize Rs 4,000 crore of its assets in the FY 2022-23.The state-owned company saw an increase of 6% sales demand last year and expects a stable 6% to 8% sales growth next year onwards across the country.
Speaking to the press here Monday, GAIL India chairman and managing director Manoj Jain said that two pipelines have been shortlisted for asset monetization and the mode will be finalised by the government as proposals have been put forward by GAIL. He said the process could take 6-18 months.
“Gail targets to monetize Rs 4,000 crore of its assets in the current year,” he said.
“We had a 6% increase in sales demand last year and next year onwards the company is expecting 6%-8% growth in sales across the country,” said Jain as he added that with increasing domestic demand GAIL is reducing its international portfolio and now bringing gas into the country.
Speaking on renewables, Jain said GAIL will invest Rs 6,000 crore in the next three years in the sector and its investment can go up by an additional Rs 20,000 crore by 2030. “GAIL is looking at almost 3 GW of renewables capacity by 2030 which will include 1 GW to start within the next three years. 50000 tonne hydrogen is expected to be available,” he said.
The company at present is adding liquid hydrogen capacity and the progress done on the prototype will influence its overall investments. A call on the same will be taken after 18 months. It is in the process of procuring a 10 MW facility for liquid hydrogen expected to be the largest in the country and is on the lookout for the electrolyser.
GAIL's director (finance) Rakesh Kumar Jain said the company, which reported a 112 percent jump in 2021-22 post-tax net profit at Rs 10,364 crore, has outlined an overall capital expenditure plan of up to Rs 40,000 crore in the next five years, which will cover a wide array of areas. This will entail borrowings of up to Rs 20,000 crore while the rest will come from internal accruals. In 2021-22, GAIL invested Rs 7,700 crore across all activities, which included pipelines for the core transmission business and petrochemicals.
On the exploration and production side, its activities will be limited to an asset being pursued in Myanmar where the company is investing money, Jain said.
Jain said revenue wise this year, PBT for natural gas trading and marketing is 36%, transmission -27%, petrochemicals -9%, liquid hydrocarbons -21%. Natural gas transmission, liquid hydrocarbon, petrochemicals and natural gas marketing and trading are generating profits. Transmission is stable business and slated to grow 8%-10% in next three years. The company further said it is expecting 6%-8% growth in gas marketing during the same time.
“Petrochemicals is 10% of total PBT at present. With our two new plants coming up we see a jump of around 50% after three years. We see a growth rate of 30-36% range in this segment,” said Jain.
Talking further about capex, Jain said Rs 4,200 crore was spent on capex on pipeline projects this year. Capex on pipelines will remain the same in next three years but spending on petrochemicals will increase significantly. It will be around Rs 8,000 crore by 2024-25. 50% of orders have been placed for the new petrochemical plant in Alibaug.
He added that currently GAIL had to buy 1 million tonne of coal for the long term to meet its international demands but now the company will focus to meet the increasing domestic demand.
On consolidated basis, GAIL Group has achieved annual revenue from Operations, PBT and PAT of Rs 92,874 crore, Rs 15,464 crore and Rs 12,256 crore in FY 22, up by 62%, 100% and 100% respectively against FY21.
Jain said that this is the highest yearly financial results on all there parameters reported by the company in its history.
GAIL has incurred a capex of Rs 7,738 crore mainly in pipelines, petrochemicals, equity to JVs etc.
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