The pressure on natural gas prices persists, led by a larger-than-expected climb in US supplies. The expectations are that gas prices will remain under pressure moving forward as well. This should lend support to prospects of gas processing and distribution companies such as GAIL, Indraprastha Gas, Gujarat Gas and Mahanagar Gas, as well as imported gas receivers and re-gasification companies such as Petronet LNG.
The lower gas prices are positive given the surge in demand helping all the players in the space and this is expected to continue. Analysts at Elara Capital say that global liquefied natural gas (LNG) supply would witness, about 57 million tonnes (or 21 per cent) growth during calendar years 2016-18 led by new supplies from the US and Australia. This means that spot LNG prices would decline and become economical and fuel industrial demand. Elara expects doubling of industrial gas demand by FY22.
Analysts at Ambit Capital, too, say global demand-supply trends suggest LNG prices could face further downward pressure in FY18 which should lead to higher off-take from industrial, consumer and refinery/petchem segments which will boost demand over FY17-20.
via Growth prospects upbeat for gas players | Business Standard Financial X-Ray
aniltikotekar4sme.com 