BPCL, GAIL shares rise after PSUs sign Rs 63,000-crore propane supply deal

Bharat Petroleum Corporation Ltd (BPCL) and GAIL (India) Ltd shares rose on Thursday, November 2, after the state-run companies signed a 15-year agreement worth Rs 63,000 crore for the supply of propane, a key petrochemical feedstock. As part of the deal, BPCL will provide GAIL with 600 kilo tonnes per annum (KTPA) of propane from its LPG import facility in Uran, which is undergoing expansion to accommodate 3 million tonnes per annum (MTPA) of propane and butane imports. 

In a regulatory filing post-market hours on Wednesday, the Mumbai-based oil marketing company said it will supply propane, under the agreement, to GAIL’s propane dehydrogenation (PDH)-polypropylene (PP) project in Usar, Maharashtra. 

The strategically positioned GAIL's Usar PDH-PP project in Usar, Maharashtra, represents the inception of India's inaugural propane ppdehydrogenation (PDH) plant, which is set to commence operations in 2025, BPCL said.

At 10:32 am, GAIL India shares were up 2.5 per cent at Rs 120.6 apiece while the BPCL stock was up 1.1 per cent at Rs 360.8 apiece on BSE.  

“This groundbreaking collaboration between BPCL and GAIL stands as a testament to their dedication to driving India's petrochemical progress. It is not only a significant milestone for both organizations but also a momentous leap forward for the nation's thriving petrochemical sector,” BPCL added.  

GAIL India and BPCL reported their financial results for the July-September period last month.  

GAIL India reported a standalone net profit of Rs 2,404.9 crore for the quarter ended September 30, 2023, a sequential jump of 70.3 per cent. The company's revenue stood at Rs 31,822.6 crore for the second quarter of the current financial year, as against Rs 32,227.5 crore for the previous three months, according to a regulatory filing.  

Bharat Petroleum Corp recorded a consolidated net profit of Rs 8,501 crore for the fiscal second quarter, against a net loss of Rs 304 crore for the corresponding period a year ago, mainly due to softer crude oil prices and low raw material costs.  

BPCL’s revenue fell about 9 per cent on a year-on-year basis to Rs 1.17 lakh crore for the July-September period. 

GAIL India and BPCL shares: Past performance  

GAIL India shares have gained more than 24 per cent while the BPCL stock has risen more than eight per cent so far in 2023, both outperforming a rise of more than five per cent in the headline Nifty index.

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