Equinor on Monday said that it signed a long-term supply contract with Deepak Fertilisers and Petrochemicals Corporation (DFPCL) for supplying liquefied natural gas (LNG), making it the Norwegian company’s largest deal with a private sector firm in India.
The international oil and gas giant will supply 0.65 million tonnes (mt) LNG to the fertiliser major for 15 years, beginning 2026.
“Equinor’s growing global LNG portfolio is based on LNG from the Equinor-operated LNG plant in Hammerfest, Norway, and LNG supply sourced mainly from the US. This portfolio will be the base of supply to Deepak, which will use the gas mainly as feedstock for production of ammonia in its newly-commissioned plant for manufacturing fertilisers and petrochemicals,” the Norway-based international energy company said.
Equinor’s Senior Vice-President for Gas & Power, Helge Haugane, said the ammonia plant has created new gas demand in the growing Indian market. “The agreement is another proof of how we use our position in the Atlantic basin to strengthen our relationship with key players in the growing Indian market. We look forward to developing our relationship with Deepak and to exploring avenues for further collaboration on petrochemicals feedstocks such as propane and ethane and on low carbon ammonia in the future,” he added.
The agreement, signed by Equinor’s Executive Vice-President Irene Rummelhoff and DFPCL Chairman and Managing Director Sailesh C Mehta, is one of the largest contracts signed by Equinor with a private sector company in India, Deepak Fertilisers said.
“This will put Deepak Fertilisers’ value-chain right from gas to ammonia to building block nitric acids to downstream fertilisers, mining chemicals and industrial chemicals on a solid footing, helping it absorb global volatility as well as enhance overall margins. We also look forward to exploring with Equinor, strategic tie-ups in our Chemical Business, as well as carbon footprint reduction initiatives,” Mehta said.
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“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 decarbonisation pathways in the future, DFPCL noted.