India's state-owned gas transportation utility GAIL said Wednesday it plans to boost capital expenditure in financial year 2016-17 (April-March) by about 13% year on year to $252 million, and spend another $3 billion over the next two to four years to expand its pipeline network.
The company said it had set a capital expenditure target of Rupee 17 billion ($252 million) in the current financial year, compared with Rupee 15 billion last year, which would largely be used for refurbishing old pipelines.
GAIL owns and operates a network of over 11,000 km of high-pressure natural gas pipeline infrastructure in the country.
Work on the 2,050-km Jagdishpur-Haldia pipeline connecting parts of eastern India to the national gas grid had begun, and most of the expenditure towards that project would happen in the current financial year, company chairman B.C. Tripathi said, while releasing the financial results for the fourth quarter.
This pipeline network will cost Rupee 120 billion, he added.
In the fourth quarter of fiscal year ending March 31, 2016, GAIL's natural gas sales rose 8% year on year to 74.41 million cu m/d, while natural gas transmission increased 11% year on year to 95.31 million cu m/d.
GAIL's net profit over January-March rose 51% year on year to Rupee 7.7 billion from the year-ago period.
"Profit was high because of higher [gas] transmission and trading margins," Tripathi said.
Its sales revenue dropped 18.3% year on year to Rupee 116.27 billion in the March quarter. Tripathi attributed the fall to a 15% drop in petrochemical prices and a 38% decline in realized LPG prices.
He said GAIL imported 55 LNG cargoes, or 3.5 million mt, during financial year 2015-16 and is likely to import an equal number of cargoes in the current year. In the current fiscal year, it had so far imported eight cargoes.
GAIL's natural gas sales in fiscal year 2015-16 rose marginally to 73.7 million cu m/d, from 72.1 million cu m/d, while transmission volume remained steady at 92.1 million cu m/d.
GAIL's annual net profit fell 24% to Rupee 22.99 billion on lower price realization, Tripathi said.
Tripathi said the company is gearing up to supply natural gas to domestic users in the southern Indian city of Bangalore from next month.
The company also plans to expand its household gas service to the pilgrim town of Haridwar in northern India and to the western state of Goa, he added.
