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Wednesday, October 4, 2023

Modi visit: IOC signs long-term gas deals with ADNOC and Total

NEW DELHI: State-owned IndianOil signed multi-billion dollar deals with France’s TotalEnergies and ADNOC Abu Dhabi LNG to import gas by ship from 2026, underscoring the bid to secure a diversified supply basket as the country expands its gas network.
The agreements were signed during Prime Minister Narendra modeThe recent visit of the two countries. With the government wanting to increase 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 tons per year) of LNG for 14 years and Total 0.8 mtpa over 10 years of its global portfolio. A Comprehensive Economic Cooperation Agreement with Abu Dhabi will make ADNOC shipments competitive as IndiaOil will not have to pay 2.5% customs duties and surcharges. IndianOil will be able to import shipments at any LNG import terminal in India under both agreements.
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 urban gas joint ventures: IndianOil Adani Gas with AdaniTotal, a joint venture between the Adani group and Total; as well as Green Gas with the state gas company GAIL. The company plans to invest a total of Rs 27 billion in building gas distribution networks in 105 districts in 21 states.
Petronet LNG, a private company created by four state oil companies: GAIL, Bharat Petroleum, IndianOil and ONGC, was the first Indian company to sign a forward agreement with Qatar’s RasGas. It has another forward contract with the Gorgon LNG project in Australia built by a Chevron-led consortium.

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