Indian Oil Inks Agreement with Trafigura to Purchase LNG
According to reports, Indian Oil has entered a five-year agreement with global commodities trader Trafigura to purchase 2.5 million tonnes (mt) of liquefied natural gas (LNG), potentially amounting to $1.4bn (Rs118.46bn), as announced by the company’s chairman A S Sahney. The agreement, scheduled to begin in the second half of this year, will link LNG prices to the US Henry Hub index.
Trafigura is anticipated to supply three to four LNG shipments to India this year and six shipments annually beginning next year.
This agreement is part of India's larger plan to boost its energy imports from the US, seeking to rectify its trade deficit with the nation.
In light of the US-China trade disputes, traders are thinking of redirecting certain LNG shipments initially meant for China to India.
India, ranking as the fourth-largest LNG importer in the world, imported 26.58mt of LNG in 2024, as per Kpler's data.
According to the report, the US, which is currently India's second-largest supplier of LNG, is negotiating to enhance supply quantities to satisfy the needs of India's swiftly growing economy.
In a connected update, the Abu Dhabi National Oil Company (ADNOC) has announced intentions to begin exporting liquefied petroleum gas (LPG) from the US to India starting in June, as part of a strategic shift resulting from the US-China trade tensions.
ADNOC's action is anticipated to lower India's LPG import expenses while also enabling the company to satisfy the increasing demand in China.
Additionally, India has implemented significant changes to its domestic gas allocation policy, set to be effective from the first quarter of the fiscal year 2026.
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The policy overhaul entails funding for compressed natural gas and piped natural gas being provided on a two-quarter advance schedule and includes fresh well gas from the nominated fields of state-owned firms Oil and Natural Gas Corporation and Oil India.