Petronet LNG is a BUY says Nomura

LNG — next wave of gas supply
 KG-D6 delays provides near-term upside
Domestic gas production has been stagnant in the past nine months.
Domestic volume growth is unlikely to resume soon, even as pipeline
bottlenecks ease, as RIL undertakes reservoir studies at KG-D6 block.
We have been saying that PLNG, with its spare capacity, could be the
next big source of gas availability after KG-D6. The delays at KG-D6
could mean upside in volume starts accruing much earlier.
 Spot imports to ramp up as HVJ bottlenecks ease
Spot LNG volumes, which had dried up since end-2009, have recently
resumed, as pipeline constraints eased due to the shut-down at
Panna-Mukta fields. We expect constraints to ease further over the
next six months, as GAIL first de-bottlenecks existing HVJ (by end-
2010) and commissions the new 48’ Dahej-Vijaipur pipeline (by April
2011). PLNG has 2.5mmtpa spare capacity and can bring in higher
spot volumes.
 New capacities – next big source of new gas
PLNG is adding up 5mmtpa of new capacity over the next two to three
years – by expanding the Dahej terminal to 12.5mmtpa and with the
new Kochi terminal of 2.5 mmtpa. Capacity at Dahej would be further
expandable to 15 mmtpa and Kochi to 5 mmtpa. LT LNG supply has
already been tied up for 60% of initial capacity at Kochi, and the
company has been looking for additional short-/long-term LNG for
both terminals.
 Reaffirm BUY
Our DCF based PT of INR145 implies 28% potential upside from
current levels. Compared with our TP implied P/E multiple of 17.5x
FY12F, PLNG currently trades at 13.6x FY12F P/E. Maintain BUY.