News

Published: February 20, 2024
Updated: February 20, 2024

Deepak Fertilisers Surges Nearly 10% on Long-Term LNG Partnership with Equinor

Deepak Fertilisers witnessed a significant surge in its share price, jumping nearly 10% following the announcement of a 15-year LNG contract with Norwegian giant Equinor. The market response reflects optimism surrounding the strategic partnership and its potential impact on Deepak Fertilisers' value chain.

Market Performance:

After experiencing a recent sell-off and underperforming the broader markets, Deepak Fertilisers saw a gap-up opening and follow-up buying in today's trading session. The stock opened at ₹518.65 apiece on the BSE, reaching an intraday high of ₹546 and a low of ₹512.50 apiece.

Strategic Partnership:

The long-term LNG supply agreement with Equinor marks a significant milestone for Deepak Fertilisers. By securing this partnership, the company strengthens its value chain from gas to ammonia and downstream fertilisers, industrial chemicals, and mining chemicals.

Details of the Agreement:

The deal covers up to 0.65 million tonnes of annual supply over a 15-year term starting in 2026. This partnership allows Deepak Fertilisers to meet its expanding captive needs while also trading some LNG parcels in response to India's rising demand.

Benefits for Deepak Fertilisers:

With delivery scheduled for the Indian west coast and established gas pipeline grid link to its plant's doorstep, Deepak Fertilisers is well-positioned to leverage the benefits of the LNG agreement. The partnership not only enhances the company's operational resilience but also offers opportunities for strategic tie-ups and carbon footprint reduction initiatives.

Statement from Management:

Sailesh C. Mehta, Chairman & Managing Director of Deepak Fertilisers, expressed his enthusiasm for the partnership, highlighting its potential to strengthen the company's value chain and enhance overall margins. He also emphasised the possibility of exploring strategic tie-ups with Equinor in the chemical business and collaborating on carbon footprint reduction initiatives.

The 15-year LNG contract with Equinor represents a significant milestone for Deepak Fertilisers, positioning the company for long-term growth and sustainability. With a solid foundation in place, Deepak Fertilisers is poised to capitalize on emerging opportunities in the energy and chemicals sectors, driving value for shareholders and stakeholders alike.