MOSL: PETRONET LNG (Buy)-Firm utilization continues-Dahej continues to lead-Kochi to improve utilization
​PETRONET LNG: Firm utilization continues; Dahej continues to lead; Kochi to improve utilization
(PLNG IN, Mkt Cap USD5.3b, CMP INR228, TP INR275, 20% Upside, Buy)
- ​Our channel checks suggest more than full utilization at Dahej and marginally increased throughput at the Kochi LNG terminal.
- We continue believing that increased domestic gas production and upcoming competition would not be a significant risk to utilization.
- Reiterate Buy with a target price of INR275.
Firm utilization at Dahej
- ​On capacity of 15mmtpa, PLNG has firm take-or-pay utilization contracts of 15.75mmtpa.
- Our channel checks further suggest that LNG arrival at Dahej is happening at a rate of 16mmtpa, reflecting above full utilization.
Do not see much competition
- ​Among the existing terminals, Dabhol would remain underutilized due to the lack of breakwater facility, the tender for which has not yet been awarded.
- GSPC/Adani’s 5mmtpa Mundra LNG terminal is expected to come in early 2018, with the completion of 60km Mundra-Anjar pipeline being key to this. Additionally, capacity of the existing 170km 3mmtpa Anjar-Chotila network needs to be augmented to handle the full load. Tender for this has not yet been awarded.
- IOCL’s Ennore LNG terminal would come up in 2019, and service an entirely new set of consumers without being any threat to PLNG.
Petronet LNG develops, designs, constructs, owns and operates Liquefied Natural Gas (LNG) import and regasification terminals in India. Co. operates through the natural gas business segment. Co.'s terminals include Dahej LNG terminal, Kochi LNG terminal and Solid cargo port. Co. owns and operates a LNG regasification terminal with name plate capacity of 10 MMTPA at Dahej, in the State of Gujarat. Co. also has commissioned another LNG terminal with name plate capacity of 5 MMTPA at Kochi, in the State of Kerala. Solid Cargo Port Terminal has facilities to import/export bulk products, such as coal, steel and fertilizer.
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