India’s two largest state-owned oil and gas companies are close to signing deals to buy liquefied natural gas (LNG) from Abu Dhabi National Oil Co. (Adnoc), Bloomberg reported, as the world’s most populous nation seeks to secure long-term supplies to meet growing energy demand.
Indian Oil Corp., the country's largest refiner, will buy up to 1.2 million tonnes of LNG a year from Adnoc for more than $7 billion over 14 years starting in 2026, the government said in a statement. Meanwhile, Bharat Petroleum Corp. will receive 2.5 million tonnes of LNG from the UAE over a five-year period starting in April, with an option to extend for another five years.
The deals demonstrate India's ambition to double the share of gas in its energy mix by the end of the decade, despite infrastructure constraints that are holding back the pace of expansion.
For Adnoc, this is an important step to strengthen its position in the global LNG market, after reaching long-term agreements with customers from Germany to Malaysia.
In a race with Qatar for LNG market share, Adnoc is offering more competitive prices and more flexible terms. Customers, including India, are also increasingly looking to U.S. supplies to maintain favorable trade relations with the Trump administration.
The United Arab Emirates (UAE) is increasing its LNG export capacity from 5.8 million tonnes per year to 15.4 million tonnes, with the first cargo from the Ruwais project expected to ship in 2028.
Meanwhile, Qatar is pursuing a more aggressive expansion plan, raising capacity from 77 million tonnes to 142 million tonnes per year by 2030.
Bharat Petroleum will also sign a contract to import 6 million barrels of crude oil from Brazil's Petrobras this week, according to information from the Indian government.
India is one of Russia's important partners in the energy sector, including gas. However, compared to oil, the amount of gas that India imports from Russia is still limited.
India purchases LNG from Russia through long-term contracts and spot transactions. GAIL (India) Ltd. has a long-term LNG purchase contract with Gazprom Marketing & Trading Singapore (a subsidiary of Gazprom) for 2.5 million tonnes per year.
India is investing in Russian gas projects, especially in the Arctic. ONGC Videsh and other Indian companies have stakes in projects such as Sakhalin-1 and Vostok Oil.
Unlike oil, transporting gas from Russia to India is difficult due to the long distance and lack of direct pipelines.
India mainly imports LNG by sea, while Russia still focuses on exporting gas via pipeline to Europe and China.
