Equinor inks 15-year LNG supply deal with India’s Deepak

Norwegian state-owned energy major Equinor and Indian fertilizer and petrochemical company Deepak Fertilisers and Petrochemicals Corporation Ltd. (DFPCL) have signed a 15-year agreement for supplies of liquefied natural gas (LNG) with deliveries starting in 2026.

Equinor’s portfolio, based on LNG from the LNG plant in Hammerfest, Norway, and LNG supply sourced mainly from the U.S., will be the base of supply to Deepak, Equinor said, adding that Deepak will use the gas mainly as feedstock for the production of ammonia in its newly commissioned plant for manufacturing fertilizers and petrochemicals. The ammonia that Deepak will produce from the natural gas will be for domestic use.

Helge Haugane, Equinor’s Senior Vice President for Gas & Power, stated: “Deepak’s new ammonia plant has created new gas demand in the growing Indian market. I am very happy that we have landed this agreement with Deepak Fertilisers… 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.”

Sailesh C. Mehta, Chairman & Managing Director of DFPCL, commented: “We are very happy to enter into this long-term agreement with Equinor for the supply of LNG. The agreement will provide reliable supplies of feedstock which will further strengthen Deepak Fertilisers’ value chain from gas to ammonia, the key ingredient in fertilisers. The agreement will help us absorb global volatility as well as enhance overall margins. We also look forward to exploring with Equinor further collaboration on feedstock and carbon footprint reduction initiatives.”

Regarding Equinor’s other most recent endeavours, at the end of 2023, the energy major signed a long-term gas sales agreement, as well as a non-binding letter of intent (LoI) on large-scale hydrogen supplies, with German Securing Energy for Europe (SEFE).

Under the gas sales agreement, Equinor will supply SEFE with 111 TWh (circa 10 bcm) of natural gas per year until 2034, plus an option for another five years, at terms reflecting market prices, Equinor revealed, adding that the non-binding LoI was signed with the intention that SEFE will become a long-term off-taker of giga-scale, low-carbon hydrogen supplies from Equinor starting in 2029 and continuing towards 2060.