DFPCL secures 0.65 million tonne annual LNG supply from Equinor in 15-year deal

New Delhi: Deepak Fertilisers and Petrochemicals Corporation Limited (DFPCL) and Norway-based Equinor have signed a long-term agreement for the supply of up to 0.65 million tonnes of Liquefied Natural Gas (LNG) annually over 15 years, starting from 2026.

"With this tie-up, DFPCL strengthens its value chain with an attractive long-term LNG contract to solidify its value chain from gas to ammonia to various downstream fertilisers, industrial chemicals and mining chemicals. This end-to-end tie-up shall establish a strong long-term foundation for all of DFPCL's product segments," the company said in a statement.

Equinor, erstwhile Statoil, is amongst the established leaders in the oil & gas sector over the last 50 years, with a market cap of $75 billion wherein majority shares are owned by the Norwegian government.

The agreement signed by Irene Rummelhoff, Executive Vice President, Equinor and Sailesh C. Mehta, Chairman & Managing Director, DFPCL, is one of the largest contracts signed by Equinor with a private sector company in India.

"The tie-up provides room for trading some LNG parcels in the growing LNG demands in India as well as accommodating DFPCL’s growing captive needs. The LNG will be delivered to the west coast of India. DFPCL is at an advanced stage of tying up the regasification terminal with the gas pipeline grid connectivity to its plant's doorstep already in place," it added.

The LNG agreement also encourages the companies to further collaborate on petrochemicals feedstocks and strategic decarbonization pathways in the future.

"This will put on a solid footing Deepak Fertilisers value-chain right from Gas to Ammonia to building block Nitric Acids to downstream Fertilisers, Mining Chemicals and Industrial Chemicals, helping it to absorb Global volatility as well as enhance overall margins," said Sailesh C. Mehta, Chairman & Managing Director, DFPCL. He also highlighted the potential for further strategic collaborations and carbon footprint reduction initiatives with Equinor.

Equinor's Senior Vice President for Gas & Power, Helge Haugane, noted the importance of ammonia as a crucial agricultural component and voiced pride in supporting India's domestic fertiliser supply through this agreement. "We look forward to further developing our relationship with Deepak on feedstocks and low carbon initiatives in the future," Haugane added, emphasizing the mutual benefits and growth opportunities the partnership holds for both companies in the Indian market.