homebusiness Newscompanies NewsDeepak Fertilisers signs 15 year LNG contract with Norway based Equinor
Deepak Fertilisers signs 15-year LNG contract with Norway-based Equinor
Equinor is among the longstanding global leaders in the oil and gas sector, with a market cap of $75 billion. The majority stake in the company is owned by the Norwegian government. Shares of Deepak Fertilisers And Petrochemicals Corporation Ltd ended at ₹495.60, up by ₹1.10, or 0.22%, on the BSE.
Deepak Fertilisers and Petrochemicals Corporation Ltd (DFPCL) on Monday (February 19) said it has entered into a long-term supply agreement for liquefied natural gas (LNG) with Equinor, an international energy company headquartered in Norway.
With this tie-up, Deepak Fertilisers strengthens its value chain with a long-term LNG contract to solidify its value chain from gas to ammonia to various downstream fertilisers, industrial chemicals and mining chemicals, according to a stock exchange filing.
Equinor, which was earlier known as Statoil, is among the global leaders in the oil and gas sector, with a presence across 50 years and a market cap of $75 billion. The majority stake in the company is owned by the Norwegian government.
The agreement signed by Irene Rummelhoff, Executive Vice President, Equinor; and Sailesh C. Mehta, Chairman and Managing Director of DFPCL, is one of the largest contracts signed by Equinor with a private sector company in India.
This agreement is for annual supplies of up to 0.65 million tonnes over 15 years, beginning in 2026. The tie-up provides room for trading some LNG parcels in the growing LNG demands in India as well as accommodating DFPCL’s growing captive needs.
The LNG will be delivered to the west coast of India. DFPCL is at an advanced stage of tying up the re-gasification terminal with the gas pipeline grid connectivity to its plant's doorstep already in place.
The LNG agreement also encourages the companies to further collaborate on petrochemicals feedstocks and strategic decarbonisation pathways in the future.
Sailesh C. Mehta, Chairman and Managing Director of DFPCL, said, "This will put on a solid footing (the) Deepak Fertilisers value chain right from gas to ammonia to building block nitric acids to downstream fertilisers, mining chemicals and industrial chemicals, helping it to absorb global volatility as well as enhance overall margins."
Equinor's Senior Vice President for Gas & Power Helge Haugane, said, "Ammonia is a key building block for the society, being crucial for agriculture and food security. Deepak’s new ammonia plant will provide new, domestic fertiliser supply to India and we are proud to provide its feedstock in the form of natural gas. We look forward to further developing our relationship with Deepak on feedstocks and low-carbon initiatives in the future."
Deepak Fertilisers shares were trading 5.1% up at 519.6% apiece at 3.10pm on February 20.
(Edited by : Shoma Bhattacharjee)
First Published: Feb 19, 2024 7:48 PM IST
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