IOC Signs $1.4 Billion LNG Deal with Trafigura to Meet Growing Demand
- 01-May-2025 7:30 PM
- Journalist: William Faulkner
Indian Oil Corp. has signed a liquefied natural gas import deal valued between $1.3 billion and $1.4 billion with global commodities trader Trafigura. Under the agreement, Trafigura will supply 27 LNG cargoes鈥攁mounting to 2.5 million metric tons鈥攕tarting in the second half of 2025, Indian Oil Chairman A.S. Sahney said Wednesday.
滨苍诲颈补鈥檚 natural gas demand is expanding at a double-digit rate as the country increases reliance on the fuel, which is seen as a cleaner alternative during the energy transition. In addition to industrial use, natural gas is compressed into CNG for vehicles, piped to households for cooking, and increasingly used as a fuel for long-haul trucks.
Sahney noted that the contract is benchmarked to the U.S. Henry Hub pricing index, offering a market-based rate structure. Indian Oil currently operates a 5 million tonne per annum LNG terminal in Ennore, Tamil Nadu, and holds regasification capacity at several other import facilities nationwide.
In related developments, Hindustan Petroleum Corp. Ltd. (HPCL) has announced a supply and trading agreement with ADNOC Trading, a subsidiary of Abu Dhabi National Oil Co. The LNG under this deal will be received at the recently commissioned Chhara LNG Terminal, operated by HPCL LNG Ltd., a wholly owned HPCL unit. Although the company did not disclose the contracted volume, it said the supply would meet its internal requirements and be marketed to other downstream consumers.
The Chhara terminal has a regasification capacity of 5 million tonnes per year and features two storage tanks, each capable of holding 200,000 cubic meters of LNG, according to NDTV. HPCL stated that the partnership positions ADNOC Trading as a key long-term supplier, supporting energy security and supply diversification.
Indian Oil has also previously signed 14-year and 10-year LNG supply deals with ADNOC LNG and TotalEnergies, respectively. The agreement with ADNOC LNG covers 1.2 million tonnes per year, while the TotalEnergies contract is for 800,000 tonnes annually.
Separately, GAIL (India) Ltd. awarded an LNG supply tender to Qatar Energy Trading in December for 12 cargoes per year over five years, beginning April 2025. GAIL also signed long-term agreements with Vitol Asia for 1 million tonnes annually over 10 years from 2026, and with ADNOC Gas to import 0.5 million tonnes per year over the same timeframe.
These deals support 滨苍诲颈补鈥檚 goal of raising the share of natural gas in its energy mix to 15% by 2030, up from the current 6鈥�7%.
