RasGas contract revision to boost gas utility firms
Petronet LNG’s deal with RasGas would not only bring down the overall cost of gas for India, but will also benefit gas utility companies including Gail India, Indraprastha Gas Limited (IGL) and Gujarat State Petronet Limited (GSP).
“The deal would improve the overall utilisation of Dahej terminal, which was facing some issue in last three quarters due to higher long term LNG contract,” IDBI capital said in a note. For Gail India, the risk of facing ‘take or pay’ liability of $1 billion is now gone and its petrochemical business would get a big boost.
“Gail’s petchem business was utilising at lower rate of nearly 50-60 per cent due to higher input cost. With lower gas price, they can improve the utilisation and also it would again start making profit,” said IDBI Capital.
While Petronet LNG’s scrip was at Rs 259 a share on the BSE, up 1.63 per cent from the previous close; Gail was down 1.49 per cent at Rs 369.80 and Indraprastha Gas Limited was trading nearly flat at Rs 526.85.
Petronet LNG is India’s largest liquefied natural gas (LNG) importer. The company on Thursday announced it would get fuel from Qatar’s state-owned gas producer RasGas at nearly half the price originally agreed upon.
Read full article: Business Standard
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