Indian Oil Corp, the country’s largest refiner, has signed a five-year deal with trading firm Trafigura to import liquefied natural gas (LNG), media reported on Wednesday.
Under the arrangement, Trafigura will deliver three to four LNG shipments in the current year, followed by six shipments annually beginning next year.
The pricing structure for these imports will be tied to the US Henry Hub benchmark. India is aiming to increase its energy purchases from the United States to address trade imbalances with the world’s largest economy, while traders are seeking to redirect some LNG originally destined for China toward India.
Additionally, Gail India recently sought to acquire a stake in an LNG project in the US, coupled with a 15-year import agreement.
During Prime Minister Narendra Modi’s visit to the US last month, India committed to raising its energy imports from the United States by $10 billion, reaching a total of $25 billion in the near term. Eliminating the import duty would make US liquefied natural gas more cost-effective and contribute to reducing India’s trade surplus with the US, which stood at $45.4 billion last year.
India has imported 25.9 million tonnes of LNG worth about $14.2 billion in the first 11 months of the financial year 2024-25 (FY25). India’s LNG imports from the US are driven by Gail’s long-term deals with US companies to buy 5.8 million tons of LNG annually. Oil Secretary Pankaj Jain had mentioned in February that Gail, Indian Oil Corp and Bharat Petroleum Corp (BPCL) are talking to US companies for additional LNG sourcing.