Transmission FY26 guide cut 138-139 (Q4) to 124-125 MMSCMD (Q3).

First question was with respect to the volumes. Because of the way that the rains have gone, obviously, demand from the power sector has been a major factor driving the lower demand. So, any guidance you can give us of what H2 looks like given the very long tail of monsoons we have seen in the country this year?

So, I shared in terms of average volume for this financial year will be around 123 to 124 MMSCMD, and we expect it in H2 it will be around 125 MMSCMD.

So, not much change in terms of segmental demand, at least for this year.

Yes, you are right, not much change. But it's kind of Q1 we saw, we are not going to see those things. Because in Q1, as we shared, fertilizer plants went for shutdowns, the power demand was not there, our petrochemical plants were also under shutdown. So, Q2 onwards, we have started seeing the normalcy, and we will see some kind of growth in terms of commissioning of new pipelines and the normal growth.

One was around the Dhabol LNG, with respect to the progress on getting into full utilization. Any guidance on FY '27 in terms of the terminal utilization that we can get?

So, as we shared with you, Dhabol terminal is now full weather terminal, right? And the nameplate capacity of that terminal is 5 MMTPA. But only one constraint still we are experiencing is that we do not have the heating system. Whenever RGPPL runs, we are able to take the advantage of the heating system available there. But in the absence of heating system, we are expecting to utilize around 50% of the capacity. And the heating system will also be available some time in '26-'27.

You had I think mentioned in previous interaction that the last leg of that Kochi-Bangalore-Mangalore pipeline is imminent in terms of completion. If you can kindly refresh us in terms of latest time line for both the legs to be fully operational?

Yes. I shared with all the pipelines. Actually, including KKMBPL the last leg which is pending, Jagdishpur-Haldia and and MNJPL, all the pipeline GAIL is constructing excluding Gurdaspur-Jammu pipeline will be commissioned during this financial year.

First question is like, like what is the latest status on integrated tariff which is pending from the PNGRB, like we heard that there have been frequent discussions and there is difference of opinions in the tariff billing and etc. So, could you please comment on progress on the integrated pipeline tariff actually?

Actually, as you know, we submitted our integrated pipeline tariff way back in August '24. All the processes have been completed. And now with regard to various information, news, which are going around, we do not bother about these news. Because we are very clear, whatever tariff we have submitted that is Rs. 78, which is in terms of the regulations and we share that even if PNGRB, based on past moderation PNGRB does, we were sharing some time in March that our tariff will be around Rs. 70 - 71. But in between one development has happened, PNGRB has changed this regulations with respect to sharing of revenue above 75% utilization of pipeline, 50% to be retained by entity and 50% to be passed on to customers. That regulation is also giving some kind of increase to tariff. And second, the amount of delay that is happening in the processing of tariffs, that is also adding to the tariff. So, maybe Rs. 0.20 per month is increasing. So, our guidance on conservative basis of Rs. 70 was passed that should increase by Rs. 2 to Rs. 3. Now coming back to a specific answer to your question when it will come, we expect it can come in any time from now, maybe in November.

And the second question is on, we had like on the listing of the GAIL Gas IPO actually. So, any further progress on consultant and when are the future plans actually for GAIL Gas actually, because we heard that we are hiring consultants for analysis of listing.

You heard rightly. GAIL Gas is one of the biggest company in the country in terms of city gas distribution. I shared in the brief that currently it is marketing 7.72 MMSCMD volumes, GAIL Gas has got most of the geographical area any city gas distribution company has. We are one of the geographical areas like Bangalore, it has already leased 1 MMSCMD. And we in GAIL believe that now is high time that we started the process of listing GAIL Gas, in that regard we have already started the process of hiring of consultant. As I understand, the consultant has already been selected and the order may have been here maybe in giving in very few days from now. Either it might have been given, so will be given. So, we are on a path to study about listing of GAIL Gas and after conclusion of that study, certainly that study is very important for us, we expect a one year time line or so should be good enough.

Just a question on petrochemicals. What was the input gas cost in Q2, if you could just explain that?

Input cost in Q2 was around $10.5- $10.6 delivered at PATA.

So, this is expected to go up given that Henry Hub has actually increased?

Actually, Henry Hub has started softening now. I also briefed to you that we have experienced unusually higher Henry Hub price. If you compared last financial year, Henry Hub prices about 50% of the current price levels. So, it is already worth speaking, and it started softening. Currently Henry Hub prices, we do not believe that it will further go up, rather it will be softer. That's how we expect that in next financial year a lot of good positive things should happen with us.

And lastly, what is the outlook for gas transmission volumes for FY '27, like this year looks like we will do close to 124 MMSCMD or so. Next year, like earlier you were talking about 135 MMSCMD for FY '27, so do you think that could also be at risk now with weaker numbers we are seeing in '26?

Actually, last year we transported 131 MMSCMD. We were expecting that we will beat this number but whatever events which has happened during this year I narrated, like in terms of power demand, which has significantly gone down. Nobody would have expected that monsoon, there will be early onset of monsoon, the summer will be below average kind of summer, and the spot prices will be higher and, therefore, the refineries in particular have shifted to alternative fuel. Henry Hub prices were also higher. And our four pipelines got impacted due to heavy monsoon. So, all these are the unique and one-off kind of situations. So, we maintained that next last financial year we will be having 134 to 135 MMSCMD of volume.

I just missed your opening remarks, I think you mentioned something about tariffs for the first two, three minutes. Can you please like touch on that again, please?

I was not speaking about tariff. I only answered with respect to the question which earlier participant had asked about the tariff approvals when it is likely to happen. If your question is that then I can repeat that answer.

My question is on the opening remarks. Before you touched on the results you were updating something, 2%, 3% it will be growing. So, that would lead to some sort of like blended increase in tariff, were you touching upon that?

I am updating as commissioning of various pipelines, not tariff. No, that will not increase. Yes, on company basis it will change the tariff. But those are, I mean, MNJPL and Srikakulam-Angul pipeline, their tariff is fixed. So, overall company level, certainly it will change the blended tariff.

And the second question is on this new pipeline only. I think these are like bid-out pipeline, right, but Srikakulam-Angul is not bid out, right? And I think the tariff is like above Rs. 100 per MMBtu in each of the pipeline? Given that we have got capacity left in the integrated network, would you be able to push volumes in this? How much volumes you are expecting in these new pipelines by FY '27 or '28?

Srikakulam-Angul is also bid out. We got three pipelines under bidding. One is Srikakulam-Angul. Second is Mumbai-Nagpur-Jharsuguda, and third is Gurdaspur pipeline. That's a good tariff, yes. It connects the terminal, yes, but the market is different. So, next year we expect around 2 MMSCMD volume from these pipelines, because these are beginning to start transmitting volume. So, last year, we expect 2 million, then it will ramp up.

Sir, in Q2 FY '26, our gas transmission segment per unit tariff realization has declined compared to the Q1 FY '26. Any particular reason for reduction in the tariff realization?

Yes, yes. Actually, in Q1 we got Rs. 133 crores on account of tariff reconciliation on unified tariff, right, which is not available this quarter. So, that is how the weighted average tariff of Q1 was higher. This quarter, since that was a one-off kind of thing, it is not available. Second, quarter-on-quarter, the average tariff will continue to change, sometime it will be higher, sometimes it will be lower. The major reason is that it depends which zone has transmitted how much volume, because zonal tariff rates are different. So, these are the reasons, one is the reason I shared about Rs. 133 crores, and second is also how much, around Rs. 50 crores on account of weighted average?

Sir, second question is regarding our upcoming petrochemical projects, which are expected to complete in FY '26 and FY '27, which you guided. Can you guide us what quantum of EBITDA contribution one can expect from these petrochemical facilities in the next one to two years? Any numbers you can share with us?

So, if we first talk of the small capacity addition at PATA, I think which may not be very significant from your point of view, that is 60 KTA capacity we are putting at PATA. So, by this year end it will start producing, and since it is a facility at PATA, it will remain around same level what PATA is doing, because nothing much is going to change. But if you talk of PDHPP, which is 500 KTA facility at Usar, this is going to be commissioned in Financial Year '27, and effectively it will start contributing in Financial Year '28. So, if I start forecasting polymer side for two years ahead, it will not be good on my part. But if you talk of the kind of EBITDA in terms of dollar, maybe $250 per metric ton to $300 per metric ton will be kind of EBITDA will be available to us. That's based on our project approval, which holds good even today.

Sir, last question related to our new LNG sourcing contracts, which will start mostly from the next year, 2026. Need a small clarity, are we able to regasify all of these new LNG cargoes at our Dhabol terminal? Because as you mentioned that facility will be ready in the next year, so that we will be able to operate it at 100% level, 5 MMTPA.

So, let me answer it differently. Currently, we have 2.5 million tons capacity at Dahej, which we have booked, and 1.5 MMTPA capacity at Dhamra, and 2.5 MMTPA, I shared with you, is almost available without even the heating system at Dhabol. So, currently, we are able to manage our cargoes from these facilities. But when next year one more contract will start supply, certainly we will be needing more regasification capacity. Currently, we are working to tie-up the additional regasification capacity with the terminal operators where we feel that the market is there. And meanwhile, our Dhabol terminal will also start functioning at 5 MMTPA. But I believe that these capabilities will still be not sufficient w.r.t. demand we are seeing in our country. So, we have already taken a decision to expand Dhabol petrochemical from current level of 5 MMTPA to 6.5 MMTPA, and we are discussing about increase of capacity of Dhabol terminal from 6.5 MMTPA to a higher level. So, we are quite conscious of the capacity availability currently and the capacity requirement in future.

Firstly is, your guidance of increase in volume in FY '27 to I think 131, 132 MMSCMD, which is roughly any around 8 to 10 MMSCMD more than the average for this year. In that, could you give the breakup of that? What is the assumption of some of the lost power volumes which did not happen this time that coming back?

Vikash. last year we transported 131 MMSCMD. This year, a lot of unwanted events have happened. So, coming back to your question, from where at 8 to 10 MMSCMD will come. The 3 million to 3.5 million will certainly come from the city gas distribution company, which is a normal growth, which we have experienced this year also. Second, the power volume is around 1.5 million to 2 million was down, that will come up. So, that makes 5 million. Then 2 million I shared that we will be having volume in MNJPL and Srikakulam-Angul, that makes to 7 MMSCMD. And then, refineries volume which have gone this year, actually we cannot expect every year to be same. Almost 2 million to 3 million volume we lost to refineries. One more event I shared that the four of our pipeline got impacted because of the heavy flood, those volumes are around 1.5 million to 1 million. So, this is a broad back up. I have not given any new market like coming to eastern sector or normal growth in eastern sector. But this itself makes 8 to 10 million volume. And I am corrected, power is 3 MMSCMD, not 2 MMSCMD.

And the other question was on the CWIP that we had at the end of, say, FY '25 and also there will be a number higher than that at the end of this quarter. That's like over Rs. 20,000 crores now, how do we see a standalone number? How do we see that falling at the end of FY '26 and the end of FY '27 as your project pipelines get commissioned this time, and by FY '27 even the petchem will plant will get commissioned?

Let me give a broad answer to this question. Around Rs. 8,500 crores belongs to MNJPL, right, that is going to be commissioned by this financial year end, that is a major CAPEX. The PATA petrochemical, around Rs. 1,300 crores is going to get commissioned this year. Then KKMBPL, my colleague will give a figure, I do not already ready available figures, Phase 2 is going to get commissioned, which is also significant, maybe around Rs. 2,000 crores to Rs. 2,500 crores, that will get commissioned. So, and Jagdishpur-Haldia, some CAPEX utilization will also take place here. These four major CAPEX CWIP, around Rs. 13,000 to Rs. 14,000 crores will be capitalized, likely to be capitalized in this financial year. Then PDHPP Usar will get commissioned in '27. So, remaining the CWIP belongs to PDHPP and smaller amount to Gurdaspur. So, largely, except PDHPP and Gurdaspur (which is a very small project) will get commissioned this year.

Any change in guidance, any update on gas trading or anything on that side in terms of -- Anything for next year also, sir?

Vikash, I have been maintaining since the beginning of this financial year that we will be earning around Rs. 4,000 crores to Rs. 4,500 crores on PBT level. And we have already crossed Rs. 2,200 crores in first half in spite of the various negative things. So, we expect that we will certainly touch Rs. 4,500 crores of guidance at PBT level, and may even exceed that. Next year will be around same level. We do not expect any new addition to this guidance because a lot of things depend. But in terms of guidance, I will maintain around that level only.

In the case of GAIL Gas, if you can give us a breakup in terms of CNG and PNG in GAIL Gas.

So, we have bulk trading in GAIL Gas in 4.5 MMSCMD, bulk trading which GAIL Gas does. Then Taj Trapezium zone which is the UPM based pricing, 1.32 MMSCMD. And in terms of city gas distribution, which includes PNG, CNG put together around 2 MMSCMD.

My last question is on your JBF, I see that like you have floated a proposal for connecting the pipeline to the port. So, why would you even consider that in the presence of MRPL potentially who can subject pretty much all your requirement in terms of paraxylyene?

Actually, initially we are expecting that we will get to supplies from MRPL, but somehow things could not materialize as of now when I am talking. But anyway, even if we are able to tie up with MRPL, in order to continuously run the plant, nothing wrong about having the alternative supply. And it also gives us flexibility to take the benefit of price advantage. So, currently, we do not have any contract with the MRPL, so that's the constraint. And second, it always provides a price opportunity and redundancy of the sources. So, these are two reasons why we are laying the pipeline connecting port for importing paraxylene

Sir, just one question from my side. This Rs. 4,000 crores to Rs. 4,500 crores marketing guidance that we gave, that is at the EBITDA level or EBIT level, is it EBIT or EBITDA?

It is actually PBT level. If you talk of margin level, I also shared those numbers, it is around Rs 2,866 crore. If you are interested in EBITDA level, Rs. 2,866 crores, I shared that also.

Sir, first question is on the volume for FY '27. So, you did explain in terms of what are the factors that will drive that 8 to 10 MMSCMD. We also used to have a startup of new refineries which would contribute and also some ramp-up on the fertilizer plants. So, is this considered into FY '27 or is it more of an FY '28 phenomenon? Or what is the potential new industries getting connected?

We have included that, when we are talking of the refinery segment, it includes the upcoming new refineries which are likely to get connected on the eastern part of the country, and also the existing refineries which have taken slightly less during this year.

So, when you said the refineries will add 1 to 2 MMSCMD, so this include both these factors? And which are the refineries that we are looking at, sir, for the incremental volumes?

No, no. Number is not correct, the statement is correct. Actually, there are two factors. One, the volume is lost, right? And another is, we said around 2 to 3 MMSCMD, not 1 to 2 MMSCMD. In first half of the question I said around 3 MMSCMD we will get, because lost volume and the new refineries. New ones to be connected are Haldia and Bongaigaon and Guwahati.

Sir, any further upside in fertilizer plants ramping up or any upside that is left? Or it's fully covered?

Fertilizer plants have already ramped up. If we talk of the addition by consumption in fertilizer, there are some plants which are actually doing capacity expansion. And we also understand there are proposals to put plants in maybe Maharashtra and also Chhattisgarh. So, in those terms, certainly there will be additions to the transmission volume. But in terms of existing, yes, it will ramp up.

Sir, also in terms of gas consumption for transmission, the system use gas consumption, the quantum and the pricing, is it still HPHT, if you could just help on that? And also on the petchem and LPG side, the quantum of gas consumption?

1.44 MMSCMD for LPG, and around ~5 MMSCMD for petrochemicals. 1.6 MMSCMD. Actually, we always endeavor to get the cheapest available sourcing, one of the cheapest for even for this consumption and transmission, but you can for your working consider around HPHT.

Sir, in terms of marketing of the total volumes that we do, broadly what are the back-to-back contracts that we will have? I mean, what are the quantum of spot exposure? If you can give some color on that. And also the basis swaps that we do, to what extent it covers our portfolio currently?

We have currently contracted volume of around 16.5 million tons, okay? And out of 16.5 million tons volume, 1 million ton will start flowing from next year, that is Vitol. The 15.5 million tons volume is currently flowing. Out of that, only 0.75 million tons or even less than 0.7 million tons is open, rest is back-to-back. Only some of the volume which is not back-to-back in terms of the index. One of contracts we have wherein we have the upstream formula on JCC and nine-months average, and downstream we have formula on Brent three months average. So, to that extent you can say it is differs, but we consider that also back to that base because it only leaves a cash flow issue. Because over a period of time, nine months and three months average gives the similar kind of cash flow, so we consider those as back-to-back contract. If we consider those as back-to-back contract, only 0.75 million tons you consider that we have opened a volume around 2.53 MMSCMD of Henry Hub volume, which we have, you can say, considered that we are kept willfully available to us in order to take the benefit of market arbitrage sometimes in domestic market and sometime in international market. So, that is the only volume we have. And in terms of spot volume, spot volume we source time to time in order to fulfill the demand of our existing contract, because we contract downstream more than we have the sourcing. And in order to fulfill those demands, sometimes we source the spot, and also to meet the demand like power we source spot. So, that largely remains 10% kind of spot volume we have on an average basis.

Just one follow-up there. So, in case this 95% or 96% - 97%, where we are back-to-back contracted, if there is a difference in basis, for instance it's a Henry Hub, whereas the end consumption is on the oil-linked basis, so we would have had a basis swap to cover is. Is that the right understanding, sir?

Let me give you, again, repeat. Henry Hub volume, only 2.5 to 3 MMSCMD is open. Remaining 17 million - 18 million are back to back, we do not have any basis risk. Regarding 2.5 to 3 MMSCMD, whatever volume is there, yes, we have basis risk if we supply on crude-base, we have basic risk if spot prices we have differently and we sell on spot. We continue to take swaps for those volumes also, not 100% level. We continue to take swaps at 45% to 50% level, depending on the opportunity provided by the market. That's only risk we carry.

First is on the transmission realization. So, I just wanted to understand that do you actually get the realization and the revenues to the weighted average of the zonal tariffs? Is it the correct way to get the revenues out there from the pure transformation segment? There is some other thing also which is mentioned on PNGRB website about the integrated tariffs, so does GAIL has something to do with the integrated tariff also? Or you just do the weighted cost and take out the zonal tariffs and the volumes which have been supplied in those respective zones when you get that revenue. So, is it the correct way? Or again, is that something you do to the integrated tariff?

We get the integrated tariff rate. But integrated tariff has also been divided into zonals. Integrated tariff rate is Rs. 58.60 or something like that. But that has been divided into three zones, Zone 1, Zone 2, Zone 3. These are three different tariff rates under the same average tariff of Rs. 58.60. So, when you saw weighted average, it depends which zone a customer exists in. So, if customer exists in Zone 3, we will get higher.

And my second question is regarding the customer portfolio. Just wanted to understand what is the portfolio of the customers to which you sell those gases? For example, you have a contract of 15.5 million tons of natural gas. And definitely, there would be some priority customer, there would be some non-priority customer. Is this something that you do have some fixed kind of margin for the priority customers, some different kind of variable margins or the market determined margin for the non-priority customers? And in that non-priority customers or in that market determined margins, you do have cost plus markup or inclination of something like that. So, what is your customer portfolio in terms of marketing division?

Actually, market-driven price, what is market realized imported gas? So, again, in order to give more clarity to your question, out of 16.5 million tons, we are yet to start getting gas of 1 million tons. So, from 15.5 million tons, 4.8 million tons is almost on a fixed margin, which increases every year, right? Another 3 million tons volume we have again on same margin. But as I shared just before, in that contract, we have fixed margin, but there is some cash flow issues. We source on nine month basis and we market on three months basis. So, whenever crude price goes down, our realization reduces for a time being and our payment becomes higher because nine months average takes time to come down. Or whenever crude price goes up, we get more margins initially and then it starts reducing. So, we consider them, again, back-to-back, but there is some averaging issue, that is 3 million tons, it makes 7.8 million tons. Now, coming back to the remaining 5.8 million tons from United States and also 0.75 million tons we recently sourced from Middle East, these contracts purely are varying margin depending on the time we market it, the kind of ability we had to get the margin. So, these have varying margins depending on time when we contracted with the customer. Let me give you. Over and above, we also have ability to optimize these margins because the United States volume is on FOB basis. What we do in order to reduce the cost, we do ship swaps that we call destination swap or FOB share and DES purchase, so that also we continue to do and are able to reduce our shipping tariff, that also is helpful in optimizing our profit or increase in our profit.

And in that 4 million tons which you mentioned that you do have a fixed kind of margin, is it being sold to the priority customers where you probably usually get the margins of somewhere around Rs. 200 per 1,000, something like that? But the margins are fixed by the government for the fertilizer customers?

No, not Rs. 200. Not priority. When we market it, we market it on whoever wanted to buy those volumes. But these are largely we have contracted with fertilizer customers. Not by the government but by the party. And then it continued to increase 5% every year.