DEEPAKFERT Inks ₹1200 Cr LNG Deal with Petronet LNG

Hey there, finance enthusiasts! 👋 Let’s dive into some interesting news from the corporate world. Deepak Fertilizers and Petrochemicals Corporation Limited (DEEPAKFERT) has just announced a significant long-term agreement that’s set to bolster its energy security.

The company has inked a substantial 5-year contract with Petronet LNG Limited (PLL) for the regasification of Liquefied Natural Gas (LNG). This is a big deal for DEEPAKFERT, as it ensures a stable and crucial energy supply for its operations.

So, what are the key takeaways from this announcement? Under the terms of the agreement, Petronet LNG will handle the regasification of approximately 25 TBTUs (Trillion British Thermal Units) of LNG annually. This will happen primarily at PLL’s Dahej terminal, following an initial ramp-up period. The regasified gas is earmarked for internal consumption, specifically for DEEPAKFERT’s own manufacturing facilities and those of its group company, PCL, located at Taloja.

In terms of value, this contract is quite significant. It’s valued at a whopping ₹1200 Crore, with a potential additional outlay of up to 20% over the five-year contract duration. This long-term commitment highlights DEEPAKFERT’s strategic move to secure its energy needs and optimize operational efficiency.

It’s also worth noting that this is a domestic arrangement, and the company has confirmed that neither its promoters nor any group companies have an interest in Petronet LNG, nor does this fall under related party transactions. This indicates a straightforward commercial agreement focused purely on business needs.

This move by DEEPAKFERT to secure a consistent supply of regasified LNG is a positive step, ensuring the smooth functioning of its manufacturing units and potentially contributing to cost stability in its energy inputs. Keep an eye out for how this strategic partnership unfolds! 📈

source: Corporate Announcement

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