Hot Pursuit     20-Feb-24
Deepak Fertilisers jumps after inking pact with Equinor
Deepak Fertilisers and Petrochemicals Corporation (DFPCL) rallied 6.76% to Rs 527.80 after the company said that it has entered into a long term supply agreement for Liquefied Natural Gas (LNG) with Equinor ASA, Norway.
Equinor is the largest exporter of pipeline gas to Europe and operator of Europe’s only large-scale LNG plant at Hammerfest, Norway. Equinor, erstwhile Statoil, is amongst the established leaders in the oil & gas sector over the last 50 years, with a market cap of $75 billion wherein majority shares are owned by the Norwegian Government.

With this tie-up, DFPCL strengthens its value chain with an attractive long-term LNG contract to solidify its value chain from gas to ammonia to various downstream fertilisers, industrial chemicals and mining chemicals.

This agreement is for annual supplies of up to 0.65 million tonnes over a period of 15 years, beginning 2026. The tie-up provides room for trading some LNG parcels in the growing LNG demands in India as well as accommodating the company’s growing captive needs. The LNG will be delivered to the west coast of India.

Sailesh C. Mehta, chairman & managing director, DFPCL, said, “We are very happy to enter into this long-term agreement with Equinor for supply of LNG. This will put on a solid footing 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. We also look forward to exploring with Equinor, strategic tie-ups in our Chemical Business, as well as carbon footprint reduction initiatives.”

Helge Haugane , senior vice president for gas & power, Equinor, 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 and Petrochemicals Corporation is a manufacturer of fertilizers and chemicals.

The company’ consolidated net profit declined 76.9% to Rs 57.56 crore in Q3 FY24 as compared with Rs 249.44 crore posted in Q3 FY23. Net sales fell 32.7% YoY to Rs 1,852.64 crore in Q3 FY24.

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