Deepak Fertilisers shares rise after 15-year LNG contract with Norway’s Equinor: What’s happening

What Deepak Fertlisers said in BSE filing?

“With this tie-up, Deepak Fertilisers strengthens its value chain with an attractive long-term LNG contract to solidify its value chain from Gas to Ammonia to various downstream Fertilisers, Industrial Chemicals and Mining Chemicals. This end-to-end tie-up shall establish a strong long-term foundation for all of DFPCL’s product segments,” the company said in a BSE filing.

What we know about the contract so far?

As per the contract, Equinor will annually supply up to 0.65 million tonnes to Deepak Fertilisers over a period of 15 years. This will begin in 2026 and benefits Deepak Fertilisers which is currently aiming to tie up the re-gasification terminal with the gas pipeline grid connectivity.

What DFCL managing director said on the contract?

Sailesh C. Mehta, Chairman & Managing Director, of DFPCL, said, “This will put on a solid footing Deepak Fertilisers value-chain right from Gas to Ammonia to building block Nitric Acids to downstream Fertilisers, Mining Chemicals, and Industrial Chemicals, helping it to absorb Global volatility as well as enhance overall margins. We also look forward to exploring with Equinor, strategic tie-ups in our Chemical Business, as well as carbon footprint reduction initiatives.”

Additionally, Deepak Fertilisers will also strengthen its value chain from Gas to Ammonia to various downstream fertilisers, industrial chemicals as well as mining chemicals, the company said.