IOC signs $7-9 bn LNG import deal with UAE’s ADNOC Gas

New Delhi, Jul 19 (PTI) India’s top oil firm IOC has signed a USD 7-9 billion deal to import liquefied natural gas (LNG) from the UAE’s ADNOC Gas plc for 14 years beginning 2026, the UAE company said.

Indian Oil Corporation (IOC) signed the deal as also a similar pact with TotalEnergies of France during Prime Minister Narendra Modi’s visit to France and the UAE last week.

In a statement, ADNOC Gas said the agreement with IOC for the export of up to 1.2 million tonne per annum (mmtpa) of LNG is “valued in the range of USD 7 billion to USD 9 billion over its 14-year term, signifies a major step forward in the partnership between the two industry leaders.”

The deal with TotalEnergies Gas and Power Ltd (TotalEnergies) is for the import of 0.8 million tonne a year of LNG for 10 years starting 2026.

This is the first long-term deal TotalEnergies has signed with an Indian company. Also, this is the first time an Indian company has signed a long-term LNG import deal with Adnoc.

TotalEnergies is the third largest LNG supplier in the world and would be supplying LNG to IOC from their diversified portfolio across the world.

“The landmark deal marks another significant milestone for ADNOC Gas as it expands its global reach, reinforcing its position as a global LNG export partner of choice, and reaffirming IOC as its key strategic partner in the LNG market,” the statement said.

Commenting on the agreement, Ahmed Alebri, Chief Executive Officer of ADNOC Gas, said the long-term LNG sale deal further strengthens the longstanding partnership with IOC.

“We look forward to expanding our collaboration and take pride in the knowledge that ADNOC Gas’ LNG exports will further support the development of IOC and contribute to India’s growth story.”

Under the terms of the agreement, ADNOC Gas will deliver up to 1.2 mmtpa of LNG to IOC in India. “The deal serves as a testament to ADNOC Gas’ ability to meet the growing global demand for LNG, a critical fuel in the energy transition,” the statement said.

IOC is sewing new deals in line with the government goal of increasing the share of natural gas in the energy basket to 15 per cent by 2030 from the current 6.2 per cent.

Long Term LNG contracts play an important role in balancing out the inherent volatility of spot LNG market and thus make it an affordable and reliable LNG supply.

These agreements would not only diversify the supply source of LNG for IOC but also would help in meeting the growing demand for cleaner and more sustainable fuel sources, an official said.

ADNOC Gas is the national oil and gas company of the Abu Dhabi government and is the oldest supplier of natural gas from the Middle East.

India and UAE have a CEPA (Comprehensive Economic Partnership Agreement) with UAE Govt which provides for zero customs duty to be applied on LNG imports from the UAE against an applicable customs duty of 2.5 per cent plus surcharge, the official added.

LNG is a natural gas that has been cooled to minus 162 degrees Celsius, changing it from a gas into a liquid that is 1/600th of its original volume. This allows it to be shipped in specially designed LNG vessels.

India has seven LNG import facilities on the east and west coasts. IOC operates a 5 million tonne a year import terminal at Ennore in Tamil Nadu.