IOC Signs $1.4 Billion LNG Deal with Trafigura

New Delhi, Apr 30 (PTI) Indian Oil Corporation, the nation's largest oil firm, has signed a USD 1.3-1.4 billion deal with Trafigura to buy 2.5 million tonne of liquefied natural gas (LNG) to meet the rising energy needs of the country, Chairman A S Sahney said on Wednesday.

Trafigura will supply 27 cargoes or 2.5 million tonne of LNG beginning the second half of 2025, he told reporters here.

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

Besides being used as a fuel in industries, natural gas is converted into CNG for running automobiles as well as piped to household kitchens for cooking purposes. LNG is also used as a fuel in long-haul trucking.

Sahney said the deal with Trafigura is benchmarked to US Henry Hub prices.

IOC operates a 5 million tonne a year LNG import facility at Ennore in Tamil Nadu and also has capacity booked at other import terminals, he said.

Separately, Hindustan Petroleum Corporation Ltd (HPCL) said it has signed an LNG trading supply agreement with ADNOC Trading of UAE.

"The LNG will be received at recently commissioned Chhara LNG Terminal of HPCL LNG Ltd, a wholly-owned subsidiary of HPCL, to meet 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 regasification capacity of 5 million tonne per annum with 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 tonne a year and with TotalEnergies for 10 years for 800,000 tonne 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 tonne a year for a period of about 10 years, commencing 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 tonne 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.