How will Deepak Fertilisers gain from ₹1,200-crore deal with Petronet LNG?

Deepak Fertilisers share price advanced 3.9 per cent, registering an intraday high at ₹1629.9 per share on BSE after signing contract with Petronet LNG

Deepak Fertilisers & Petrochemicals Corporation and Petronet LNG shares were in demand on Tuesday, as the stock jumped 3.9 per cent and 1.9 per cent respectively in trade on BSE, registering an intraday high at ₹1,629.9 per share and ₹309.6 per share respectively. 

 

At 11:12 AM, Deepak Fertilisers' share price was trading higher by 3.07 per cent at ₹1,617 per share on the BSE and Petronet LNG shares were trading 1.35 per cent higher at ₹307.8 per share. In comparison, the BSE Sensex was up 0.52 per cent at 82,684.90.

Why were Deepak Fertilisers & Petrochemicals Corporation shares in demand?

The buying on the counter came after the company released additional information on the long-term agreement signed between Deepak Fertilisers & Petrochemicals Corporation along with its subsidiary Performance Chemiserve Limited with Petronet LNG.

 

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Under the agreement, Petronet LNG will regasify approximately 25 TBTUs of LNG annually, post an initial ramp-up period, at its Dahej terminal. The regasified gas will be primarily supplied to the company and Petronet LNG's manufacturing facilities units at Taloja for internal consumption.

 

Regasification is the process of converting LNG back into its gaseous state. The size of the contract is ₹1,200 crore with an additional outlay of up to 20 per cent, over the contract duration. 

 

The agreement, according to the company, will help the company and Petronet LNG in ensuring the logistical and commercial arrangement required to receive imported LNG to its manufacturing facilities via the existing national gas grid in Taloja, Mumbai helping deliver its integrated Gas-to-Ammonia-to-Chemicals value chain strategy.  Track Stock Market LIVE Updates

About Deepak Fertilisers & Petrochemicals Corporation

Deepak Fertilisers and Petrochemicals Corporation is a manufacturer of chemicals in India. With a strong presence in Industrial Chemicals, Crop Nutrition and Technical Ammonium Nitrate (mining chemicals), the company supports critical sectors of the economy namely pharmaceutical, agriculture, mining and infrastructure.

About Petronet LNG

Petronet LNG is a Joint Venture by the Government of India to import LNG and set up LNG terminals in the country, it involves India's leading oil and natural gas industry players. Its promoters are GAIL (India) Limited (GAIL), Oil & Natural Gas Corporation Limited (ONGC), Indian Oil Corporation Limited (IOCL) and Bharat Petroleum Corporation Limited (BPCL).