Home » Andalas Energy and Power (ADL) » Speculative Buy rating for Andalas Energy & Power (ADL) – Beaufort Securities

Speculative Buy rating for Andalas Energy & Power (ADL) – Beaufort Securities

Andalas Energy & Power (ADL.L)

Speculative Buy at 0.06p

Target Price: 0.20p

Andalas is a wellhead gas power plant developer focused on the Indonesian island Sumatra. It’s working with Indonesia’s National Oil Company (Pertamina), and a division of state-owned construction company PT PP (Persero). Together they are developing gas power projects where grid infrastructure is short of electricity.

Andalas’ relationship with Pertamina was established in 2016 through a MOU designed to “fast-track commercialisation” of marginal gas fields. Pertamina will be responsible for delivering the gas, Andalas and partners such as PT PP will be responsible for developing the power facility using modular plants and selling power to the national power utility (PLN).

Management is very experienced in Indonesian gas and has a long-standing relationship with Pertamina. This relationship underpins the investment case. Also key is Sumatra’s gas reserves, low electrification and high priority policy to support power projects. Andalas provides unique, low-cost exposure to Indonesia’s fast-growing power sector and we recommend a Speculative Buy.

Beaufort Securities acts as corporate broker to Andalas Energy & Power plc

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