India's Larsen & Toubro gains on significant Petronet order
09:10, 20 September 2021
Shares of Indian engineering conglomerate Larsen & Toubro gained on Monday after the firm said it had gained a ‘significant’ domestic order from gas importer Petronet.
Larsent & Toubro’s (L&T) stock rose 1.1% to INR1,735 ($23.54) in morning trade on the National Stock Exchange (NSE) on news that it will design and build liquefied natural gas (LNG) storage tanks for the nation’s top gas importer Petronet LNG.
L&T did not divulge the exact value of the contract, but said it hovers between INR10bn and INR25bn, as per a 20 September regulatory filing. The engineering-to-software conglomerate has a market capitalisation of INR2.41trn.
Meanwhile, the announcement nudged Petronet’s stock, which continued trading in the red on Monday following a weak opening. The operator of LNG terminals has a market cap of around INR344.92bn on the NSE.
Storage tanks
L&T Hydrocarbon Engineering (LTHE) will design, construct and commission two LNG storage tanks for Petronet, in the western state of Gujarat. Each tank will have a capacity of 170,000 m3. LTHE, which offers varied solutions across the hydrocarbon spectrum, beat competition from foreign bidders to secure the contract.
The move is in line with the Indian government’s aim to boost the share of natural gas in the country’s primary energy mix, from 6% at present to 15% by 2030.
Petronet is jointly owned by four state-run companies - explorer Oil & Natural Gas Corporation (ONGC), gas distributor GAIL (India), and fuel retailers Indian Oil Corporation (IOCL) and Bharat Petroleum Corporation (BPCL).
The importer stores gas at two locations on India’s west coast – at Dahej in Gujarat, and at Kochi in the Kerala state.