Indian Oil Partners with Trafigura in $1.4 Billion LNG Import Deal

Indian Oil Corporation Ltd (IOC) has signed a long-term liquefied natural gas (LNG) supply agreement with commodities trader Trafigura, Chairman A. S. Sahney said to Reuters on Wednesday. The deal is valued between $1.3 billion and $1.4 billion and covers the supply of approximately 2.5 million tonnes of LNG, spread over 27 cargoes. Deliveries are expected to begin in the second half of 2025. Pricing for the contract is linked to the US Henry Hub benchmark.

As of 11:18 AM on May 02, 2025, Indian Oil Corporation share price was trading at ₹142.64, a 3.47% up,  and up 4.52% over the past month, but down 20.85% over the past year.

Usage 

This contract is part of IOC’s plans to secure long-term gas supplies as India’s demand for natural gas continues to rise. Natural gas is used across industrial processes, is converted into compressed natural gas (CNG) for transport, and is also distributed to households through pipelines. In recent years, there has also been a growing use of LNG to fuel long-distance trucks.

Additional LNG Deals by Indian Companies

IOC is not the only Indian company securing long-term LNG arrangements. GAIL (India) Ltd. signed a deal with Vitol Asia for about 1 million tonnes annually for ten years, starting in 2026. It also finalised an agreement with ADNOC Gas for 0.5 million tonnes per year, beginning in 2026, and awarded a five-year LNG purchase tender to Qatar Energy Trading for 12 cargoes annually starting April 2025.

Hindustan Petroleum Corporation Ltd (HPCL) announced a separate agreement with ADNOC Trading to supply LNG to its 5 million tonne per annum Chhara terminal. The terminal, operated by HPCL LNG Ltd., includes two LNG storage tanks with a combined capacity of 400,000 cubic meters. The gas will be used to meet HPCL’s internal needs and for marketing to other customers.

Read more: IOC Signs MoU with Odisha for ₹61,077 Crore Paradip Petrochemical Project

Operational and Financial Update

IOC operates an LNG import terminal at Ennore in Tamil Nadu and holds regasification capacity at other terminals. In FY25, the company recorded a consolidated net profit of ₹13,788.83 crore, down from ₹43,161.15 crore in FY24. Total income declined to ₹8.62 trillion. Domestic sales stood at 95.375 million tonnes, with total sales (including exports) at 100.292 million tonnes.

Conclusion

India currently imports about 45% of its LNG requirement. These deals contribute to ensuring supply continuity and support the country’s growing gas consumption.

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