Shares of Petronet LNG Ltd ended marginally lower on Tuesday after jumping almost 6% on Monday, as news reports that Petronet LNG has renegotiated Australia’s Gorgon LNG contract with Exxon Mobil Corp. brought cheer. India’s oil minister had tweeted on Saturday that India has renegotiated the long-term Gorgon LNG import contract on similar lines as to what was done with LNG from Qatar. LNG is short for liquefied natural gas.

The details of the deal are not officially announced yet. According to a report from the Press Trust of India, Exxon Mobil will bear the cost of shipping LNG from Australia to India and will charge 13.9% of the prevailing Brent oil price for the 1.44 million tonnes long-term LNG in place of 14.5% of the price of Japan crude imports.

Assuming a freight price of 60-70 cents per million metric British Thermal Units (mmBtu), at an oil price of $50 a barrel, the likely reduction in price would be nearly $1/mmBtu, pointed out analysts from Nomura Research in a report on Monday. According to the brokerage, the estimated savings over the 20-year life of the contract are Rs8,000-10,000 crore ($1.2-1.5 billion).

Improved competitiveness of Gorgon LNG will benefit final consumers such as Bharat Petroleum Corp. Ltd, said analysts from Edelweiss Securities Ltd. Petronet LNG stands to benefit indirectly as the repricing will significantly reduce the overhang of volume off-take of uncompetitive LNG cargoes, added the brokerage.

Renegotiation of Gorgon LNG makes sense considering that global LNG markets are in a glut, thus putting downward pressure on spot LNG prices. A lower price would reduce feedstock costs for off-takers, and also improve trading margins for them in the short term.

After taking into account Monday’s gains, Petronet LNG shares have appreciated 17.23% so far this fiscal. In comparison, the S&P BSE 100 index has risen 10.8%. Currently, the stock trades at 21.6 times estimated earnings based on Bloomberg data. Fiscal 2017 was a good year for the company. What’s more, June quarter results show that it started this year on a reasonably positive note. The next leg of growth is expected from better utilisation of its Kochi LNG terminal, which will take some time to play out as the terminal is facing pipeline connectivity issues. In the interim, analysts don’t expect any meaningful appreciation in the shares.