2023-02-23 06:48:44
GGAS increased Industrial Gas Price as propane price increased by 30% (Equirus)
- GGAS announced Rs 1.5/scm price increase for industrial customers. New price in morbi will be Rs 47.5/scm and non-morbi will be Rs 49.5/scm.
- International propane price for Mar’23 is $780/MT against $600/MT in Feb’23. Propane shortage has led to early increase (schedule increase was in 1st Mar’23) in propane price by ~12-14/scm by propane suppliers. Propane price is currently Rs 55/scm in Morbi.
- Sharp decline in spot LNG price $14/mmbtu is allowing GGAS to blend spot LNG with existing long term gas supply (are in range of $11-14/mmbtu).
- As per our understanding, Morbi vol already reached 2.5mmscmd and will likely reach 5-5.5mmscmd in next few weeks. Q3FY23 morbi vol was ~2.0mmmscmd.
- For next 2-3 months, as ceramic customers shift from propane to gas, we expect sharp recovery in GGAS industrial volume which has declined from 9.5mmscmd in peak to 4mmscmd last quarter. We highlighted in our result updated note that, there are signs of improvement after 18 months and industrial volume will see revival.
- Higher Morbi volume will benefit entire gas value chain apart from GGAS – higher transmission volume for GSPL (3mmscmd additional vol is ~14% of Q3FY23 volume of 22mmscmd), higher volume for PLNG at Dahej (6-7% of Q3FY23 Dahej volume). We have ADD rating on GGAS.
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