Torrent Power To Buy LNG From BP Under 10-Year Deal

Torrent Power Ltd. on Monday announced a major deal to buy liquified natural gas from British energy giant BP Plc. to power gas-based plants in India and augment supplies for city gas distribution.

The Gujarat-based power producer signed a long-term sales and purchase agreement with BP Singapore Pte. for the supply of up to 0.41 million tonnes per annum of LNG from 2027 to 2036, a press release said. The monetary value of the deal has not been disclosed.

The LNG procured under this agreement will be strategically utilised to operate its 2,730 MW combined cycle gas-based power plants in India to meet the country’s rising power demand, peak demand periods’ support, and balancing the renewables, the statement added.

The supplies will also be used by the group's city gas distribution arm Torrent Gas Ltd. for households, commercial and industrial consumers and CNG vehicles.

LNG is created by cooling natural gas and reducing its volume — making it easier, safer and more efficient to ship.

"This agreement represents a significant strategic move, reaffirming Torrent’s commitment to clean energy, securing competitively priced LNG for long-term power generation and gas distribution," Torrent Power said.

India targets to increase natural gas's share in the energy mix to 15% by 2030. LNG is seen as a less-polluting alternative and a transition fuel to wean away from fossil fuels like coal and oil.

Torrent Power said it will take advantage of the softness in LNG prices to explore medium- and long-term procurement in response to the growing demand from its power plants and city gas networks respectively.

Last month, the company approved fundraising through non-convertible debentures up to Rs 3,000 crore in one or more tranches via a private placement.

A pipeline of more than 3 GW of renewable projects and 3 GW of pump storage hydro-power project is under construction, according to Chairperson Samir Mehta.

Shares of Torrent Power closed 1.7% higher at Rs 1,396.45 apiece on the BSE, compared to a 0.09% fall in the benchmark Sensex.