Smallcap Chemical Stock Skyrockets 10% On Signing 15-Year LNG Contract; Details Here

Deepak Fertilisers and Petrochemicals Corporation Limited (DFPCL) on Tuesday zoomed 6.76% in its stock price to Rs 527.80 after its announcement of a long-term supply agreement for liquefied natural gas (LNG) with Equinor ASA, Norway.

Equinor, renowned as Europe's largest exporter of pipeline gas and operator of the region's sole large-scale LNG plant in Hammer fest, Norway, holds a dominant position in the oil and gas sector. The Norwegian Government owns most of Equinor's shares, which have a $75 billion market capitalisation.

Under this agreement, DFPCL secures annual LNG supplies of up to 0.65 million tonnes over a 15-year period starting in 2026. The agreement not only addresses the company's growing captive needs but also provides flexibility to trade LNG parcels to meet the rising demand in India's LNG market. The LNG shipments are slated for delivery to the west coast of India.

This strategic tie-up empowers DFPCL to bolster its value chain, ensuring a steady supply of LNG for its operations. By integrating LNG into its operations, DFPCL strengthens its position in various downstream sectors, including fertilisers, industrial chemicals, and mining chemicals.

DFPCL's Chairman, Sailesh C. Mehta, expressed enthusiasm about the partnership, emphasizing its potential to fortify the company's value chain and enhance overall margins. Mehta also hinted at exploring further strategic collaborations with Equinor in DFPCL's Chemical Business segment and initiatives aimed at reducing carbon footprint.

Helge Haugane, Equinor's Senior Vice President for Gas & Power, hailed ammonia as a critical building block for society, essential for agriculture and food security. Equinor's collaboration with DFPCL in providing natural gas feed-stock for its new ammonia plant signifies a commitment to supporting domestic fertiliser supply in India.

With this landmark agreement, DFPCL strengthens its position as a key player in the fertiliser industry and underscores its commitment to sustainable growth. The partnership with Equinor not only ensures a stable supply of LNG but also opens avenues for future collaborations in low-carbon initiatives.

DFPCL's foray into LNG supply through its partnership with Equinor represents a strategic move aimed at enhancing operational efficiency, expanding market reach, and fostering sustainable development in the Indian chemical and fertiliser sector