Riding on Demand Pull

Petronet LNG is India’s largest liquefied natural gas (LNG) importer and has various terminals across the country. It was incorporated in 1998 as a joint venture between Gas Authority of India, Oil and Natural Gas Corporation, Bharat Petroleum and Indian Oil Company with an authorised capital of `1,200 crore. Petronet supplies gas to these four companies, each of which hold a 12.5 per cent equity stake. Industry overview Natural gas is increasingly becoming a major component of the fuel mix in order to meet the global energy requirement. Although in India gas is only around 11 per cent of the primary energy production and consumption, its share is expected to increase significantly to around 20 per cent by 2025. India consumes on an average around 185 mmscmd (million metric standard cubic meter per day) of gas which is expected to rise to 356 mmscmd by 2014-15. Strengths Petronet’s revenues are sourced from regasification of LNG through long-term contracts and spot deals. With GAIL, ONGC, BP and IOC holding a combined 50 per cent stake, the company bears minimum marketing risk due to back-to-back sales agreements with the promoter group. * Petronet is emerging as a key player in India’s limited-supply natural gas market. It operates India’s first and largest LNG terminal at Dahej and is also exploring options to further leverage the potential of imported LNG in the Indian gas market. * For the next couple

This article was originally published on January 21, 2013.