Partial closure of Enven1.3 due to cut in gas supply – Alfalah Securities Limited

Karachi: Engro Corporation has notified the stock exchange today that their 100% owned subsidiary Engro Fertilizer’s new plant “Enven1.3” has been shut down on late Friday night due to curtailment in gas supply on the SNGPL network.

According to Alfalah Securities Limited, Sui Northern Gas Pipelines Limited (SNGPL) has informed the company that the supply of gas from several gas fields on their network has been cut and in order to manage the demand- supply situation, the gas distribution company has partially curtailed gas supply to their fertilizer plant however, SNGPL would resume gas supply to Enven1.3 as soon as the demand-supply situation eases off. Gas supply to Enven1.3 was assured for only 5 months during CY11 from the SNGP network and Alfalah Securities Limited expects more or less the same situation would continue during CY12 as the country’s energy demand is continuing its rising trend while no significant addition has been made to improve the supply situation. Alfalah Securities Limited recommends a Hold stance on Engro at current levels as it trades at a CY12E P/E of 6.5x.

Leave a Reply