Petronet LNG Limited’s (PLL) recent 15-year binding agreement with Deepak Nitrite Limited’s subsidiary, Deepak Phenolics Limited (DPL), has propelled Petronet’s stock by nearly 1%. This strategic alliance is poised to fortify DPL’s operational foundation, setting the stage for sustained growth.
At the heart of this collaboration is a robust 15-year binding term sheet inked between DPL and PLL. Within the contours of this agreement, DPL is slated to receive a steady supply of 250 KTPA (kilo tonnes per annum) of propylene and 11 KTPA of hydrogen from PLL’s Dahej petrochemical venture in Gujarat. The enduring nature of this supply arrangement ensures DPL’s access to critical feedstock, providing the essential underpinning for consistent production and operational stability.
Propylene, a pivotal petrochemical, serves as a building block for various downstream products such as polypropylene plastics, acrylic acid, and solvents. The secure and cost-effective procurement of propylene is integral to DPL’s overall cost management and profitability. Simultaneously, hydrogen’s role in enhancing energy efficiency and optimizing operational processes further underscores its significance in DPL’s production activities.
The 15-year timeline of this agreement signifies the deep-rooted confidence and commitment shared between DPL and PLL. This extended horizon empowers DPL to chart its production capacities and future investments with a heightened sense of certainty, fostering sustainable growth. The geographical proximity of PLL’s Dahej facility to DPL’s operations ensures streamlined logistics and minimized transportation costs, amplifying the overall appeal of this deal.
As of 10:18 am, Petronet’s shares demonstrated a 0.16% upswing, reaching ₹216.45.
