Gas stocks gains momentum in India; LNG deal with Qatar, Petronet soars by 4%

After Petronet LNG Ltd. revealed on February 6 that it is expected to ink an agreement with QatarEnergy to extend a 2004 deal to acquire 7.5 million tonnes of gas annually for the production of electricity, fertilizer, and conversion to compressed natural gas (CNG), bulls tightened their grip on gas stocks. The largest LNG importer in India said on the fringes of India Energy Week that the initial 25-year agreement, which was set to expire in 2028, has been extended for an extra 20 years.

The second agreement, worth one million tonnes annually, was signed in 2015. It will be negotiated independently.

Gas stocks saw significant gains

Similarly, shares of state gas majors such as Gujarat Gas and Mahanagar Gas Ltd also saw significant gains during the session earlier today. Shares of Gujarat Gas were locked at over three per cent upper circuit to hit its 52-week high of ₹617.35 apiece on the BSE, while Mahanagas Gas shares were locked at six per cent upper circuit to hit its fresh record high of ₹1,5399 apiece on the BSE.

India-Qatar LNG tie-up

Petronet LNG shares were stuck at more than 6% above the upper circuit, reaching a new 52-week high of ₹296.15 per share on the BSE.

In addition, GAIL (India) shares increased by about 4% to reach an intraday high of ₹183, compared to its 52-week high of ₹186.50 on the BSE. On the BSE, shares ended the day 3.07 percent higher at ₹181.50 a share.

Akshay Kumar Singh, MD & CEO, Petronet LNG Limited stated “the existing long-term agreement between Petronet LNG & QatarEnergy today accounts for around 35% of India’s LNG imports and is of national importance. Renewal of this agreement is a step towards achieving vision of Hon’ble Prime Minister of India to make India a gas-based economy and increase share of natural gas in India’s primary energy basket to 15 per cent by year 2030. This agreement will provide energy security and ensure stable & reliable supply of clean energy and help India in its stride towards greater economic development.”