>PETRONET LNG (FINQUEST)

A case to Buy

Concerns regarding business model
■ Low oil price was a matter of concern as consumer switch to Naptha, coal and fuel.

■ Reliance KG gas could increase significant supply in domestic market leading to less demand of Petronets gas.

■ Increase in volumes as Petronet has achieved 125% of rated capacity in FY09.

■ Short term availability of gas in the globe.

■ Failure to enter long term agreement for supply of gas.


What has changed now?
■ Oil prices have since moved.. resulting in all the substitutes getting expensive be it fuel oil, coal and naphtha.

■ Recent high court verdict granted 29 mmscmd of gas to RNRL for Dadri plant. This will
reduce gas supply in India once plant is commissioned by the same quantity.

■ Petronet has recently expanded its Dahej terminal capacity by 5 MMTPA and the facility
will be operational for atleast 9 month in FY10. Additional terminal at Kochi (2.5 MMPTA
expandable to 5.0 MMPTA) commissioning by Dec. 2011.

■ Spot market availability of gas has eased after November 2008 due to global slowdown.

■ The company has made long term arrangement for supply of gas from Ras Gas (Quatar)
and Exxon Mobil for additional supply for expanded capacity.