Petronet LNG faces arbitration as vessel owners seek Rs 625 crore in dues

New Delhi: Owners of three LNG vessels engaged by Petronet LNG to bring gas from Qatar have initiated arbitration proceedings against the company to recover dues of Rs 625 crore plus taxes, after the ships remained largely idle due to disruptions caused by the Iran war.

The vessels — Disha, Raahi and Aseem — operate under long-term charter agreements with India LNG Transport Company (No.1) Ltd, India LNG Transport Company (No.2) Ltd and India LNG Transport Company (No.3) Ltd, respectively. Their operations have been suspended since March 2, except for one vessel that was used for about seven days in June.

The claims, including associated costs, stood at Rs 89.30 crore as of March 31 and rose to Rs 625.42 crore by September 30, according to Petronet LNG’s disclosure in its earnings statement.


Petronet LNG is contesting the claims. “The ultimate outcome of the arbitration proceedings and the resulting financial impact, if any, cannot presently be determined,” the company said, adding that no provision has been made for the claims.

Petronet LNG on Monday reported a 53% rise in profit to Rs 1,235 crore in the July-September quarter, even as revenue from operations fell 35% to Rs 7,200 crore. The company processed 231 thousand British thermal units (TBTU) of liquefied natural gas (LNG) during the quarter at its import terminals, compared with 228 TBTU in the year-earlier period.

The company declared a dividend of Rs 7 per share. Petronet’s stock closed 4% higher on Monday at Rs 300.35 apiece.