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• A Balyan, chief executive officer and managing director, Petronet LNG doesn't expect to see a significant impact on company's margins even if the petroleum regulator asks gas companies to share their profit with the government .In an interview to CNBC-TV18, Balyan said, "Compared to prevailing rates that the companies are charging, ours are much lower. I don't think there would be any significant impact on our margins," Meanwhile, the company is in talks with RasGas to get additional gas supply and is in the final stages of finalising the contract with them.

• Q: What are your expectations of what may come through from the Petroleum & Natural Gas Regulatory Board? Do you think they will lean in your favor or against?

• A: We are not aware whether the regulatory mechanism in margin for the imported gas is there or not. So, we need to see. For domestic gas surely there is a scenario where they have to look at, but for imported gas we are not too sure. Our understanding is that for imported gas marketing, it maybe a different scenario.But as the situation remains, I don't think there is a huge marketing margins that the companies are taking. They are reasonable to my mind and there could be some moderation, but we need to see how the margins on the imported gas which is being sold need to be reviewed. That is a question, first we need to understand that.

• Q: We hear from reliable sources that the issue has been referred to the PNGRB. If there is some moderation or capping up of domestic rates and some marginal reduction requested in even the imported gas how much of an impact on the marketing margin or moderation in the marketing margin would you expect for Petronet LNG?

• A: Well, I don't think it would have any margin, because compared to prevailing rates that the companies are charging, ours are much lower. I don't think there would be any significant impact on our margins.

• Q: Is that a hope or more a conviction that that will happen because it seems quite likely that all sellers of gas might see some kind of moderation in marketing margins?

• A: We feel that because our margins are not very high and they are already sort of very reasonable moderated levels, I personally feel that there should not be any significant effect on our margins.

• Q: Would it not have an impact on your earnings though? I mean nearly 17-20% of what comes through on your EPS is courtesy trading margins on the spot cargos. So have you at all done any expectation analysis of what kind of effect would come through on your earnings potential?

• A: I must clarify that majority of our earnings comes from our regasification service charges. I do believe that in coming years the marketing done by PLL would increase surely. In coming years we might have more spot cargos, more marketing by PLL directly. As of now our main earnings are from regasification charges, direct marketing by PLL is very small quantity. I don't think there is going to be any significant effect now.

• Q: What kind of access to gas you are tying up, because there has been a lot of talk about your discussions with RasGas and even Gazprom. Can you update us on how close you are to inking some new tying up of gas?

• A: As far as RasGas is concerned, Qatar is major player in the world, it is number one in the world. We have been in negotiation with them for additional quantity. They have assured us also. We have negotiated on many other terms and conditions, we have moved ahead. We are on the final stages of our finalization of the contract, but the challenge for us is to how do we convince them to get the best price for India and we have advanced quite a bit.We have been in negotiation with Gazprom on various matters. Majority of issues have been agreed to, are being solved, settled. Pricing is what we are now engaged with them. It might take some more time, maybe in couple of months we should be able to be at a stage of close to finalization of the contract.

• Q: There have also been reports that Shell is expanding its Hazira Terminal to eventually 10 million tonne per annum. Do you think demand in the markets big enough to absorb all the capacity, Shell plus yours or could you be looking at some competitive pressures kicking in?

• A: Well, I am happy and finally I see that the Shell Terminal is getting expanded. It is a welcome sign to expand. Our country needs more gas and I am sure they will be able to bring in better price for the gas from their own portfolio. It would ease the situation in the country. But the requirement is huge and we need more players to come in, so there is a big opportunity for many peers.

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