In a strategic move to bolster its energy security and diversify its energy portfolio, India has entered into substantial liquefied natural gas (LNG) supply agreements with Abu Dhabi National Oil Company (ADNOC). These deals underscore the deepening energy ties between India and the United Arab Emirates (UAE), reflecting India’s commitment to increasing the share of natural gas in its energy mix from the current 6.2% to 15% by 2030.
Key Agreements and Their Implications
Bharat Petroleum Corporation Limited (BPCL) Agreement: ADNOC has agreed to supply 2.5 million tons of LNG to BPCL over a five-year period starting in April 2025. Under this contract, BPCL will receive 40 LNG cargoes, with supply volumes gradually increasing over the first two years. The formal signing is scheduled during the India Energy Week conference.
Indian Oil Corporation (IOC) Agreement: Another major Indian energy firm, IOC, is also finalizing a long-term agreement with ADNOC to secure LNG supplies. This agreement is expected to ensure a steady flow of natural gas to meet India’s growing demand and reduce reliance on spot market purchases, which are often subject to price volatility.
Strategic Importance of the LNG Deals
- Energy Security & Economic Stability: The agreements with ADNOC will provide India with a stable and reliable supply of LNG, reducing exposure to price fluctuations in global gas markets. This is crucial for India’s energy-intensive industries and power generation.
- Strengthening UAE-India Bilateral Ties: The deals further cement the UAE’s role as a key energy partner for India, following previous investments in Indian energy infrastructure.
- Boosting Domestic Gas Consumption: As India aims to transition towards cleaner energy sources, these agreements align with the government’s goal of increasing the share of natural gas in the country’s energy mix.
A Win-Win for Both Nations
For ADNOC, these agreements mark an important step in securing long-term buyers for its LNG output as global energy markets transition towards cleaner fuels. For India, the deals ensure energy security and price stability, supporting its broader economic growth and sustainability goals.
With these landmark agreements, India continues to take significant steps toward securing its energy future while strengthening its strategic ties with the UAE.