Indian Oil signs second long-term LNG deal with France's TotalEnergies

livemint.com:

New Delhi: India is looking to fortify its imports of LNG, a crucial ingredient in industrial applications and partly in transportation, through long-term contracts with overseas exporters. This week, state-run Indian Oil Corporation Ltd signed a long-term contract with French energy giant TotalEnergies in France for supply of LNG (liquefied natural gas), two people aware of the development said. Under the contract, TotalEnergies would supply 1 million metric tonne per annum (mmtpa) of LNG to IOCL for a period of around 10 years.

This is the second long-term contract between the two companies in the past one year. Last July, they had signed an agreement for supply of 0.8 mmtpa of LNG. Around the same period last year, the public sector refining and marketing major also signed an agreement with Abu Dhabi National Oil Company (ADNOC) for supply of 1.2 mmtpa of LNG starting 2026.

Queries mailed to IndianOil and TotalEnergies remained unanswered till press time. The push for long-term contracts has gained momentum after the gas market witnessed volatility in 2022 due to the Russia-Ukraine war. The prices had soared in 2022 amid the crisis, leading to Gazprom defaulting on its long-term contract with another state-run major GAIL (India) Ltd for about a year starting May 2022.

This happened as Gazprom’s German subsidiary found it lucrative to sell its produce in the spot market rather than fulfilling contractual commitments. Now, all Indian PSUs dealing in gas, such as IOCL, GAIL, and Petronet LNG have been looking out for long-term contracts to ensure adequate availability of gas and avoid purchases in the volatile spot markets. On similar lines, Petronet LNG extended its contract with QatarEnergy LNG in February by signing a