GAIL India - Gas Marketing Outlook Robust Despite Henry Hub Surge: ICICI Securities

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ICICI Securities Report

Henry Hub gas prices are up 11% and FY22E based on futures are up 8% since June 14, 2021 implying HH-linked U.S. liquefied natural gas cost rise for GAIL India Ltd.

Oil and spot LNG prices are also up boosting the company’s U.S. LNG realisation.

The company’s FY22E gas marketing Ebitda, assuming entire volume is sold at oil-linked prices, is down 5% to Rs 37.7 billion versus our estimate based on futures as of June 14, 2021 but that assuming 20-28% of U.S. LNG sold at spot prices at Rs 50.4-55.7 billion is up 4-7% and that in most likely scenario is up 2% at Rs 36.4 billion.

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