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[Lavanay]

Gujarat State Petroleum Corp Ltd (GSPC) plans to build a five million tonne a year liquefied natural gas (LNG) terminal at the Mundra port by 2013, which would be further increased up to 20 million tonne.  GSPC would hold a 50% stake in the project, while Adani group has agreed to buy 25%. While GSPC is talking to Essar for the remaining stake, HPCL has also approached it for buying 25%.

Huge Potential for Natural Gas to grow: - Gas demand in India, currently around 179 million standard cubic metres a day (mmscmd), is far short of the supply of about 95 mmscmd. Supply is expected to
double by 2009 after new gas fields, including those of Reliance Industries, take off. Local player Petronet LNG plans to double its capacity to 10 million tonnes of LNG, while Britain’s BG Group Plc
plans to import LNG in India this year, adding to domestic supplies, but still the demand was rising. Studies estimates the share of natural gas in India’s coal-dominated energy basket will double to 18% by
2015 and stabilize at 20% by 2025.

GSPL set to benefit: - Gujarat State Petronet Ltd (GSPL), a GSPC group firm, is laying a pipeline network of 2,500 km in the state, which can be used by GSPC to transport the regassified LNG to the
demand centers. GSPL is also set to derive huge benefit of new gas supply from Reliance & others. We have coverage on the stock with price objective of Rs.85. This new initiatives by parent company
further bolsters our confidence in GSPL’s growth prospects.