Apr 27, 2013, 07.16 PM | Source: Moneycontrol.com
Prabhudas Lilladher is bullish on Petronet LNG and has recommended buy rating on the stock with a target of Rs 185 in its April 25, 2013 research report.
, Prabhudas Lilladher |
“Petronet LNG (PLNG) has entered into a conditional agreement with Houston-based United LNG to procure LNG from the main Pass Energy Hub LNG project in the Gulf of Mexico. One of the conditionality associated with the deal is the approval from the department of Energy (DoE). In Jan-13, main pass facility received approval from DoE to export gas to nations having FTA (Free trade agreement) with USA; approval for sale to non-FTA nations is still pending. The final SPA is expected to be signed by the end of the current year. The agreement would provide PLNG supplies to the tune of 4.0MMTPA of LNG for the period of 20-years; moreover, there is a potential of additional supplies to PLNG. PLNG is exploring the possibility to purchase a stake in United LNG’s liquefaction facilities located in Gulf of Mexico. While there is no disclosure on the pricing terms of the deal, we believe, it would largely be in line with Cheniere deal with GAIL.”
“MPEH is owned by Freeport McRan Energy and United LNG, each holding 50 percent. As per the news reports, the facility, which is slated to cost ~US USD14bn, is expected to begin construction of its first vessel in 2013. First LNG export from the said facility would commence in 2017. The project HAS taken an approval to export up to 24MMTPA of LNG per annum.”
“We believe the deal is likely to be significantly positive for Petronet LNG. The same is likely to de-risk the Kochi terminal in a significant manner. Kochi Terminal, which currently has linkages of 28.8 percent of the total installed capacity, is likely to see complete linkages for the terminal. PLNG’s utility nature of business (stable regasification margins and term contracts), low regulatory risks and expanding volumes on account of strong demand estimates, hold it in good stead. We recommend .BUY. on the stock with target of Rs185/share,” says Prabhudas Lilladher research report.
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