Hey finance enthusiasts!
Big news from the industrial sector today as Deepak Fertilisers and Petrochemicals Corporation Limited (DEEPAKFERT), along with its step-down subsidiary Performance Chemiserve Limited (PCL), has inked a significant long-term agreement with Petronet LNG Limited (PLL), India’s leading LNG infrastructure company. This deal is all about the regasification of Liquefied Natural Gas (LNG), a crucial step in their ambitious growth strategy.
Think of it this way: Deepak Fertilisers had already secured a long-term LNG supply contract with Norwegian giant Equinor ASA. Now, with this new agreement with Petronet LNG, they’ve essentially locked in the ’last mile connectivity’ for their gas supply. This means the imported LNG can be efficiently converted back into natural gas and delivered right to their manufacturing facilities in Taloja, Mumbai, via the existing national gas grid. 🚚💨
This strategic move is a game-changer for Deepak Fertilisers’ integrated ‘Gas-to-Ammonia-to-Chemicals’ value chain. It ensures a steady and reliable supply of raw material, which is vital for their operations. Under the terms of the agreement, Petronet LNG will regasify approximately 25 TBTUs of LNG annually, primarily at its Dahej terminal, for a period of five years. This volume will largely fuel Deepak Fertilisers’ and PCL’s internal consumption needs.
What does this mean for the company’s broader vision? It strengthens their journey towards forward integration, allowing them to deliver a holistic range of products from building block Nitric Acid all the way to downstream final products like NPK Fertilisers, Industrial Chemicals, and Mining Chemicals. This end-to-end tie-up promises to deliver a risk-mitigated and value-accretive basket of products and services, aligning perfectly with India’s growth story. 📈
It’s a clear sign that Deepak Fertilisers is strategically positioning itself for long-term stability and growth in the energy and chemicals sector. Keep an eye on how this foundational strength translates into future performance!
source: Corporate Announcement