popular articles

Strategic agreement between IOC and ADNOC for 1 million tonnes of LNG per year

Indian Oil Corporation has signed a major agreement with ADNOC for 1 million tonnes of LNG per year for 15 years. This commitment strengthens the energy relationship between India and the Emirates, while meeting the growing demand for LNG in India.
LNG Ruwais project

Please share:

Indian Oil Corporation (IOC) recently signed a significant agreement with Abu Dhabi National Oil Company (ADNOC) for the supply of 1 million metric tons of liquefied natural gas (LNG) per year for 15 years, from the Ruwais LNG project.
This contract, the third signed by IOC in just over a year, is valued at a price of around 12.4% over crude oil.
This type of pricing is common in the industry, where long-term contracts are often indexed to the price of oil to reflect market fluctuations.
The agreement was announced during a visit to India by the Crown Prince of Abu Dhabi, Sheikh Khaled bin Mohamed bin Zayed Al Nahyan.
This partnership is part of a wider context of strengthening energy relations between India and the United Arab Emirates.
In addition to this contract, IOC has also signed a 14-year agreement for 1.2 million tonnes per year with ADNOC in July 2023, as well as another contract for 0.8 million tonnes with Total Energies.
These agreements are designed to meet the growing demand for LNG in India, which is expected to increase until the end of the decade.

Analysis of prices and market conditions

The price of 12.4% over crude is considered relatively high by some market players, who note that other companies and trading houses are offering lower prices.
One market player said, “There are offers that are lower than this 12.4% price against crude, which suggests that there may be other considerations at play.” In general, long-term contracts in Asia use a “slope” formula against crude oil as a benchmark, rather than relying on spot LNG prices.
To put this in perspective, a fixed price of 12.4% over Brent, which was $73.995/MMBtu, would imply a cost of $9.175/MMBtu.
This compares with the derivatives valuation for the year 2027, which was $9.325/MMBtu.
Fluctuations in LNG prices on the spot market, notably due to the increase in volumes expected from 2025 onwards, could also influence the competitiveness of long-term contract prices.

Implications for refining demand

LNG demand in India is not limited to marketing, but must also be analyzed in terms of IOC’s internal needs.
Forecasts indicate that refinery demand will increase considerably by the end of the decade.
For example, the Paradip refinery, which currently consumes 0.8 million standard cubic meters per day, could see its capacity increased to 4.5 million standard cubic meters per day.
Similarly, the Panipat refinery is expected to increase its consumption to 7-7.5 million standard cubic meters per day.
The completion of the Indra Dhanush pipeline is also expected to change the consumption dynamics of the Guwahati and Bongaigaon refineries, which will switch from using locally produced gas to LNG.
These refineries are each expected to consume around 1 million standard cubic meters per day.
LNG’s price competitiveness with other fuels, such as fuel oil and naphtha, will play a crucial role in the uptake of these LNG volumes.

Political and economic considerations

The announcement of the agreement between IOC and ADNOC was relayed by the Abu Dhabi media office, underlining the political dimension of this partnership.
Relations between India and the United Arab Emirates in the energy sector are expanding rapidly, and this type of agreement could pave the way for other future collaborations.
Market players are keeping a close eye on these developments, as they could have repercussions on regional LNG dynamics.
In addition, the agreement’s tariff structure, which benefits from a 2.75% duty exemption under the India-Emirates Free Trade Agreement, represents a significant saving for buyers.
This could also influence the purchasing decisions of other LNG-exporting countries, such as Australia and Malaysia, which also have free trade agreements with India.
The outlook for India’s LNG industry is therefore marked by growing demand and strategic agreements that could shape the country’s energy landscape in the years ahead.
Market players must remain vigilant to price trends and new offers that could emerge in an increasingly competitive environment.

Register free of charge for uninterrupted access.

Publicite

Recently published in

Amid rising Russian threats, Norway and the UK will enhance their collaboration to safeguard their vital underwater infrastructure.
A drone strike in Russia has forced the shutdown of a key pumping station on the Caspian Pipeline Consortium (CPC) pipeline, temporarily reducing its capacity to transport Kazakh oil to Europe. The incident comes amid heightened diplomatic tensions surrounding the Ukraine conflict.
A drone strike in Russia has forced the shutdown of a key pumping station on the Caspian Pipeline Consortium (CPC) pipeline, temporarily reducing its capacity to transport Kazakh oil to Europe. The incident comes amid heightened diplomatic tensions surrounding the Ukraine conflict.
The European Union (EU) and the European Investment Bank (EIB) announce an investment framework exceeding 500 million euros to strengthen Malawi’s energy sector. This program aims to modernize infrastructure, improve electricity access, and support regional integration.
The European Union (EU) and the European Investment Bank (EIB) announce an investment framework exceeding 500 million euros to strengthen Malawi’s energy sector. This program aims to modernize infrastructure, improve electricity access, and support regional integration.
Emmanuel Macron and Narendra Modi meet in Marseille to deepen their energy cooperation. The visit to the ITER nuclear fusion project and discussions on small modular reactors (SMRs) illustrate the ambition of a strategic collaboration between France and India.
Emmanuel Macron and Narendra Modi meet in Marseille to deepen their energy cooperation. The visit to the ITER nuclear fusion project and discussions on small modular reactors (SMRs) illustrate the ambition of a strategic collaboration between France and India.
Trade restrictions and the concentration of critical mineral supply expose supply chains to increasing risks. Despite a currently well-supplied market, the IEA warns of future shortages that could impact strategic industries.
Emmanuel Macron and Narendra Modi will meet in Marseille on Wednesday to discuss trade exchanges, port infrastructure, and nuclear cooperation between France and India. The visit will include the Iter project and the development of small modular reactors (SMRs).
Emmanuel Macron and Narendra Modi will meet in Marseille on Wednesday to discuss trade exchanges, port infrastructure, and nuclear cooperation between France and India. The visit will include the Iter project and the development of small modular reactors (SMRs).
Discussions led by the Minister of Energy and Natural Resources in Washington focused on measures aiming to avoid potential tariffs and to strengthen North American energy security.
Discussions led by the Minister of Energy and Natural Resources in Washington focused on measures aiming to avoid potential tariffs and to strengthen North American energy security.
Thailand's decision to cut electricity supply to several Myanmar border towns affects bilateral energy trade. With a loss of $1.5 million per month, this measure raises questions about the future of regional supply contracts.
Thailand's decision to cut electricity supply to several Myanmar border towns affects bilateral energy trade. With a loss of $1.5 million per month, this measure raises questions about the future of regional supply contracts.
Amid energy tensions with Russia, the European Union has announced a new €250 million financial aid package to support Moldova in 2025. This funding aims to stabilize the country’s energy supply while reducing its dependence on Russian gas.
China is imposing new tariffs on U.S. hydrocarbons and coal in response to Washington’s reinforced duties. This escalation intensifies trade tensions between the two powers and raises major strategic stakes in the energy sector. ##
China is imposing new tariffs on U.S. hydrocarbons and coal in response to Washington’s reinforced duties. This escalation intensifies trade tensions between the two powers and raises major strategic stakes in the energy sector. ##
The Trump administration is increasing pressure on OPEC to boost oil production. Between economic strategies and geopolitical stakes, global market balance remains fragile as OPEC+ takes a cautious approach ahead of key decisions.
The Trump administration is increasing pressure on OPEC to boost oil production. Between economic strategies and geopolitical stakes, global market balance remains fragile as OPEC+ takes a cautious approach ahead of key decisions.
In 2024, Chinese companies installed 24 gigawatts of new energy capacity in Belt and Road countries. Nearly half of the projects focused on renewable energy, underscoring their key role in global energy diplomacy.
In 2024, Chinese companies installed 24 gigawatts of new energy capacity in Belt and Road countries. Nearly half of the projects focused on renewable energy, underscoring their key role in global energy diplomacy.
Energy issues and political strategies are shaping relations between Trump, Putin, and Zelensky as negotiations over Ukraine could redefine the global geopolitical balance.
Hungarian Prime Minister Viktor Orban conditions the continuation of European sanctions against Russia on the restoration of Russian gas transit through Ukraine, citing the economic impact on Hungary.
Hungarian Prime Minister Viktor Orban conditions the continuation of European sanctions against Russia on the restoration of Russian gas transit through Ukraine, citing the economic impact on Hungary.
As Iran accelerates its enriched uranium production, the International Atomic Energy Agency (IAEA) emphasizes the urgency of dialogue between Washington and Tehran to prevent further diplomatic escalation.
As Iran accelerates its enriched uranium production, the International Atomic Energy Agency (IAEA) emphasizes the urgency of dialogue between Washington and Tehran to prevent further diplomatic escalation.
Africa’s leading oil producer, Nigeria, relies on new partnerships to finance its infrastructure, diversify its markets, and integrate nuclear, solar, and gas projects into its growth strategy.
Africa’s leading oil producer, Nigeria, relies on new partnerships to finance its infrastructure, diversify its markets, and integrate nuclear, solar, and gas projects into its growth strategy.
Amid an energy crisis, separatist Transdniestria has requested Moldova to supply gas. This request raises legal and geopolitical issues as the region has been cut off from Russian deliveries since January.
Qatar announces technical assistance to restore essential infrastructure in Syria, severely affected by years of conflict. This aid includes an energy contribution as well as support for the electricity sector, which is undergoing restructuring.
Qatar announces technical assistance to restore essential infrastructure in Syria, severely affected by years of conflict. This aid includes an energy contribution as well as support for the electricity sector, which is undergoing restructuring.
Nearly 120 missiles and drones targeted key infrastructures in Ukraine, causing widespread power outages. This attack occurred as Volodymyr Zelensky met with European leaders in Poland.
Nearly 120 missiles and drones targeted key infrastructures in Ukraine, causing widespread power outages. This attack occurred as Volodymyr Zelensky met with European leaders in Poland.
Despite months of negotiations, OECD countries failed to reach an agreement to restrict public support for fossil fuel industries, highlighting key divergences between nations.
Despite months of negotiations, OECD countries failed to reach an agreement to restrict public support for fossil fuel industries, highlighting key divergences between nations.
Thanks to the extension of the TAL pipeline, the Czech Republic diversifies its energy supply, reducing its dependence on Russian oil while enhancing its strategic security.
Ukrainian drone strikes targeted industrial and energy facilities in Russia, causing significant fires in Tatarstan and Saratov regions, according to local authorities.
Ukrainian drone strikes targeted industrial and energy facilities in Russia, causing significant fires in Tatarstan and Saratov regions, according to local authorities.
The United States is considering a 25% tax on Canadian oil imports, threatening a strategic energy partnership. This measure could disrupt Alberta’s economy and global oil markets.
The United States is considering a 25% tax on Canadian oil imports, threatening a strategic energy partnership. This measure could disrupt Alberta’s economy and global oil markets.
Slovak Prime Minister Robert Fico and Ukrainian President Volodymyr Zelensky plan discussions on the partial resumption of Russian gas transit, representing 25% of the volumes needed for Slovakia.
Slovak Prime Minister Robert Fico and Ukrainian President Volodymyr Zelensky plan discussions on the partial resumption of Russian gas transit, representing 25% of the volumes needed for Slovakia.

Advertising