Business

Modi visit: IOC inks long-term gas deals with ADNOC, Total

NEW DELHI: State-run IndianOil has inked multibillion-dollar agreements with TotalEnergies of France and ADNOC LNG of Abu Dhabi for importing gas in ships from 2026, underlining bid to secure diversified supply basket as the country expands its gas network.
The agreements were signed during prime minister Narendra Modi’s recent visit to the two countries. Since the government wants to raise the share of gas in the country’s energy basket from 65% to 15% by 2030, long-term deals have become important to avoid price or supply shocks in the post-Ukraine scenario.
ADNOC will supply up to 1.2 mtpa (million tonnes per year) of LNG for 14 years and Total 0.8 mtpa for 10 year from its global portfolio. A Comprehensive Economic Co-operation Agreement with Abu Dhabi will render shipments from ADNOC competitive as IndiaOil will not have to pay 2.5% customs duty and surcharge. IndianOil will be free to import shipments at any Indian LNG import terminal under both the deals.
ADNOC’s deal with IndiaOil will be its first long-term contract with an Indian entity. For IndianOil, the deals will secure the main input for its expanding gas distribution business.
IndianOil has two city gas joint ventures — IndianOil Adani Gas with AdaniTotal, a joint venture between the Adani group and Total; as well as Green Gas with state-run gas utility GAIL. The company has plans to invest a total of Rs 27,000 crore in building gas distribution networks in 105 districts across 21 states.
Petronet LNG, a private company set up by four state-run oil companies — GAIL, Bharat Petroleum, IndianOil and ONGC, was the first Indian company to sign a term deal with Qatar’s RasGas. It has another term contract with the Gorgon LNG project in Australia built by a Chevron-led consortium.

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