Shares of Bharat Petroleum Corp. rose over 4% to an all-time high on Thursday after its joint venture executed a long-term gas supply agreement with QatarEnergy.
Bharat Petroleum Corp. Ltd. (BPCL) saw its shares climb over 4% to reach an unprecedented high on Thursday.
This surge came in the wake of its joint venture, Petronet LNG Ltd., entering into a long-term gas supply agreement with QatarEnergy, thereby cementing the ongoing collaboration between the two entities.
The extended agreement, disclosed through an exchange filing on Wednesday, is set to renew the procurement of approximately 7.5 million tonnes per annum (MTPA) of liquified natural gas (LNG) on a long-term basis.
This contract comes as a continuation of the initial agreement signed on 31 July 1999, which was due to expire in April 2028. The arrangement promises LNG deliveries starting from May 2028, spanning 20 years, with supplies being delivered directly to the purchaser.
Petronet LNG Ltd., an LNG terminal-owning company, boasts equity participation from four major oil & gas public sector undertakings in India — GAIL (India) Ltd., Oil & Natural Gas Corp., Indian Oil Corp., and BPCL — with each holding a 12.50% equity share, aggregating to a 50% collective stake.
The longstanding agreement between PLL and QatarEnergy plays a pivotal role, accounting for approximately 35% of India’s LNG imports as of 6th February, as per BPCL’s report.
On the financial front, BPCL’s stock experienced a peak rise of 4.08% in its share price, touching Rs 626.60 apiece on the National Stock Exchange (NSE).
The stock’s performance was notably higher, trading up by 2.98% at Rs 620 per share, in contrast to the 0.15% gain observed in the benchmark Nifty 50 index, as of 9:54 a.m.
Trading volumes surged to 2.5 times the 30-day average, with the relative strength index reaching 84, indicating that the stock is currently overbought.
Market analysts hold a positive outlook on BPCL, with 22 out of 34 recommending a ‘buy’, five advising to ‘hold’, and seven suggesting to ‘sell’, according to Bloomberg data. The consensus 12-month price target implies a potential downside of 13.1%.
This deal is a testament to India’s strategic intent to enhance its natural gas usage to 15% by 2030 as part of its emission reduction goals.
Qatar, as the world’s second-largest LNG exporter, is poised to expand its dominance in gas production through the ambitious North Field Expansion Project.
This project aims to significantly increase Qatar’s LNG production capacity, thereby contributing significantly to the global LNG supply and marking a major leap in Qatar’s energy sector engagements worldwide.
