IOC Signs $1.4 Billion LNG Import Deal With Trader Trafigura

Indian Oil Corporation has signed a $1.3-1.4 billion deal with Trafigura to buy 2.5 million tonnes of liquefied natural gas to meet the rising energy needs of the country. "Trafigura will supply 27 cargoes or 2.5 million tonnes of LNG beginning the second half of 2025," Chairman A. S. Sahney told reporters on Wednesday.

India's gas demand is growing at double digits as it pushes usage of the fuel, which is considered a transition fuel.

Natural gas, apart from being used as an industrial fuel, is also converted into Compressed Natural Gas to power vehicles and is supplied through pipelines to households for cooking. Additionally, Liquefied Natural Gas is increasingly being used to fuel long-haul trucks.

Sahney stated that the company's recent deal with Trafigura is linked to the US Henry Hub pricing benchmark. IOC currently operates a 5 million tonne per annum LNG import terminal at Ennore in Tamil Nadu and has also secured regasification capacity at other import terminals across the country.

Meanwhile, Hindustan Petroleum Corporation Ltd., announced that it has entered into an LNG trading and supply agreement with ADNOC Trading, a subsidiary of Abu Dhabi National Oil Company or ADNOC, in the UAE.

"The LNG will be received at the recently commissioned Chhara LNG Terminal of HPCL LNG Ltd., a wholly owned subsidiary of HPCL, to meet the captive demand of HPCL and also for marketing to other downstream customers," the company said in a statement but did not disclose the quantity signed for.

Presently, Chhara LNG Terminal has a regasification capacity of 5 million tonnes per annum with a gross storage capacity of 400,000 cubic meters of LNG in two equal-sized LNG tanks.

"The partnership positions ADNOC Trading as a key supplier for HPCL, enabling the Indian energy major to diversify its supply portfolio and secure long-term energy solutions," the statement added.

Previously, IOC had signed binding heads of agreements with Abu Dhabi National Oil Co. LNG and TotalEnergies. IOC's deal with ADNOC LNG is for 14 years for 1.2 million tonnes a year and with TotalEnergies for 10 years for 800,000 tonnes per year.

Besides IOC, state gas utility GAIL (India) Ltd had in December last year awarded an LNG purchase tender for procuring 12 cargoes per year starting April 2025 for a tenure of five years to Qatar Energy Trading.

It had also inked a long-term deal with commodity trader Vitol Asia for around 1 million tonnes a year for a period of about 10 years, commencing in 2026. Under this deal, Vitol will deliver LNG from its global LNG portfolio to GAIL in India on a pan-India basis.

GAIL has also signed a long-term deal to purchase around 0.5 million tonnes a year of LNG from the UAE's ADNOC Gas from 2026 onwards for 10 years across India.

The deals will help in meeting India's rising energy needs and are in line with India's ambition of enhancing the share of natural gas in the energy basket to 15 per cent by 2030 from the current level of 6-7 per cent.

(With inputs from PTI)