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GAIL's US LNG commitments: Company faces a profit wipeout
Jun 09: GAIL faces a the threat of a near wipeout of its profits from its US shale gas commitments.
8Latest data seems to show that it can lose as much as 20% of its profits for every $ 1/mmbtu loss in its US commitments
8Currently, US shale gas is about $ 2/mmbtu more expensive than prevailing spot prices.
8This tantamount to a 40% loss of profit
8Then again, the worse case projection is a $ 3/mmbtu loss, and this will mean a wipe out of up to 60% of its profit margin.
8To make matters worse, the margins in the LPG and petrochemical segments are slowing down due to a large expansion of global capacities.
8Gas transmission volumes are growing but utilization rates are still less than 50%
8So hang in for a rough ride with GAIL.
8This website will keep you posted
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