Motilal Oswal: Petronet LNG – Back-To-Back Contracts – Back Bone Of The Company
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Motilal Oswal Report
Petronet LNG Ltd. is a Joint Venture of four PSU companies (GAIL Ltd., Bharat Petroleum Corporation Ltd., Indian Oil Corporation Ltd., Oil & Natural Gas Corporation Ltd.) constituting 50% of the total equity shareholding, with the remaining stake held by the public.
PLNG has two trading take or pay contracts – 7.5 million metric tonnes of RasGas (till 2028) and 1.44 mmt of Gorgon (till 2035), with 8.25 mmt of tolling use or pay contract (on which the company only earns regasification margins).
PLNG has been able to quickly ramp-up utilisation rates post every expansion (as highlighted in Exhibit 1) owing to these long-term commitments by promoters.
These transactions have been in place since the commissioning of the Dahej terminal and are conducted at arm’s length.
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