Petronet LNG expands Dahej terminal to 22.5 mtpa

Petronet LNG Limited (

) has expanded capacity at its Dahej terminal to 22.5 million tonnes per annum. However, utilization is projected to drop to 70% in FY27 from 91% in FY26 before recovering to 82% in FY28. The terminal expansion shifts focus entirely to utilization rates. High spot LNG prices are discouraging domestic buyers from signing new long-term contracts. This creates a near-term margin trade-off. Lower regasification volumes will weigh on core operational growth, even if elevated global prices generate trading and inventory gains in the interim. Headlines focusing purely on capacity addition miss the underlying demand dynamics. Petronet's earnings growth relies on volume throughput, not just nameplate capacity. Global liquefaction capacity coming online over the next 12 to 18 months should soften spot prices, making LNG affordable for industrial users. Until then, monetization of the expanded Dahej facility remains delayed. Meanwhile, the Kochi terminal offers a gradual growth offset. Kochi volumes are expected to rise from 1.2 mtpa in FY27 to 2.7 mtpa by FY29 as the pipeline connection to Bengaluru integrates it with the national gas grid. However, capital expenditure plans of ₹30,000 crore across petrochemicals and infrastructure will shift the balance sheet from a net cash position of ₹729 crore in FY26 to net debt of ₹4,160 crore by FY30. Trading at 11 times FY27 estimated earnings, the stock reflects these near-term utilization headwinds. We maintain a neutral view on the stock. Watch for spot LNG price cooling, Dahej volume recovery, and progress on Kochi pipeline connectivity before turning constructive. Disclosure: This post is for educational and informational purposes only and should not be construed as investment advice. Investors must conduct their own research or consult a certified financial advisor before making any investment decisions.