Indian Oil Corp Limited – the largest refiner in India; has recently entered into long term agreements with TotalEnergies from France and ADNOC LNG from the United Arab Emirates (UAE) to secure 2 million metric tonnes per annum (mtpa) of liquefied natural gas (LNG). The agreement with TotalEnergies entails an annual supply of up to 0.8 million MMT of LNG to Indian Oil over a period of 10 years, starting from 2026. This marks TotalEnergies’ first long term LNG contract in India. Additionally, Indian Oil has also signed a similar agreement with ADNOC LNG which will provide 1.2 mtpa of LNG to Indian Oil for a period of 14 years, starting from 2026 until 2039. Read More Business News on our website.
Indian Oil And TotalEnergies LNG Deal
These long term contracts were finalized during Prime Minister Narendra Modi’s visit to France. Indian Oil’s objective in securing these agreements is to strengthen its gas infrastructure as part of the country’s energy transition plan. Prime Minister Modi has set a target to increase the share of gas in India’s energy mix from the current 6.2% to 15% by 2030.
It is worth noting that Indian Oil and TotalEnergies already have a joint venture called IndianOil Total Private Ltd (ITPL), established in 2020. This venture lays emphasis upon the manufacturing and marketing of the high quality bitumen derivatives and the area of specialization in the India’s road building industry.
By securing these long term LNG contracts, Indian Oil aims to mitigate the volatility of the spot LNG market. The agreement bestows that it doesn’t only diversify the supply of Indian Oil’s LNG, rather it will also contribute towards the catering of growing demands for more cleaner and More sustainable source of fuel.
India and the UAE have a Comprehensive Economic Partnership Agreement (CEPA) in place, which allows for nil customs duty on LNG imports from the UAE compared to an applicable customs duty of 2.5% plus surcharge. The deal with ADNOC marks the company’s first such contract in India and serves as a step towards enhancing India’s energy security.