9.1 lakh shares changed hands in the counter on BSE. The stock was little changed on Wednesday (3 January 2006) when the reports hit the market during trading hours. PLL will import 2.5 million tones (mt) of LNG every for 25 years beginning mid-2010. There was no announcement so far from Petronet.

Reports suggest that Petronet LNG (PLL) had over the last year concluded techno-commercial and legal agreements for the purchase of 2.5 mt of LNG from the Gorgon project. The Greater Gorgon gas fields, located about 130 km off the north-west coast of western Australia, contain resources of about 40 trillion cubic feet of gas, Australia’s largest known undeveloped gas resource.

PLL has a 25-year contract to buy LNG from Qatar’s Rasgas. Through this contract, PLL currently imports five million tonne (mt) at its Dahej terminal and would start importing 2.5 mt more from 2009. The company is planning to increase Dahej terminal capacity to 10 million tonnes per annum (mtpa) by 2008-09. Its 2.5-million tones per annum capacity at Kochi LNG terminal, with provisions for expansion up to 5 mtpa, is to be commissioned in 2010.

Petronet’s major customers are Indian Oil Corporation, BPCL and GAIL India.

PLL has benefited from favourable demand-supply dynamics in the domestic natural gas sector. India faces an acute supply shortage, which is expected to continue despite the expected increase in domestic gas supplies due to recent gas finds. The increased government focus on the sector through initiatives such as the establishment of a separate gas regulatory authority, implementation of a national gas grid and deregulation of gas prices should enhance demand, analysts reckon. The demand for natural gas for 2007-08 in the country has been estimated at 179.27 million standard cubic metre per day (MSCMD), whereas the domestic production is estimated at 70.54 MSCMD. In 2005-06 PLL imported 4.81 mtpa of LNG and Hazira LNG Private imported 0.171 mtpa LNG.

As liquified natural gas (LNG) prices are passed on to the consumer, PLL remains protected from commodity price fluctuations, which helps stabilise earnings. For Q2 September 2006, PLL reported 65% growth in net profit to Rs 66.04 crore, 45.6% growth in net sales to Rs 1375.09 crore.