Global LNG Update - Supply Situation Continues To Improve: ICICI Securities

ICICI Securities Report

Recent reports from industry/global LNG companies conspicuously point to an imminent expansion in global LNG export capacity over the next decade.

That said, the estimates differ is in terms of near-term demand-supply balance, with some estimates still pointing to a tight market by winter of this year and the next, while the more optimistic estimates highlighting a surplus within the next 12 months itself, which should last over the next five–seven years.

As for India’s gas sector, a sustained comfortable supply environment is good news. A moderate LNG cost scenario will likely engender additional demand from multiple sectors, promulgate margins and create additional pricing power for city gas distributions.

We remain positive on selected names – GAIL India Ltd. and Mahanagar Gas Ltd. being preferred plays in the gas space.

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