Deepak Fertilisers and Petrochemicals Corporation (DFPCL) on Monday said it has entered into a long-term supply agreement for liquefied natural gas (LNG) with global energy major Equinor. It is one of the largest contracts signed by the Norway-based company with a private sector firm in India.
The fertiliser maker said it has signed a 15-year LNG contract with Equinor to strengthen its value chain from gas to ammonia to various downstream fertilisers and industrial and mining chemicals. The deal will ensure annual supplies of up to 0.65 million tonnes, starting from 2026.
The tie-up provides room for trading some LNG parcels amid a rising demand for gas in India. It also accommodates DFPCL’s growing captive needs, Equinor said in a statement, addding that LNG will be delivered to the west coast of India.
The deal will provide a significant boost to DFPCL operations as it is at an advanced stage of connecting the re-gasification terminal and the gas pipeline grid to its plant’s doorstep that is already in place.
DFPCL’s chairman and managing director Sailesh C Mehta said this long-term agreement of LNG would help 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 after signing the deal with Equinor’s executive vice president Irene Rummelhoff.
“It is an example of how we use our position in the Atlantic basin to strengthen our relationship with key players in the growing Indian market. Ammonia is a key building block for the society, being crucial for agriculture and food security,” Helge Haugane, Equinor’s senior vice president for gas & power, said.
Equinor’s growing global LNG portfolio is based on gas from the Equinor-operated plant in Hammerfest, Norway and supply sourced mainly from the US. This portfolio will be the base of supply to DFPCL, which will use the gas mainly as feedstock for the production of ammonia in its newly commissioned plant for manufacturing fertilisers and petrochemicals. The ammonia that DFPCL will produce from the natural gas will be for domestic use.
DFPCL and Equinor will be exploring avenues for further collaboration on petrochemicals feedstocks such as propane and ethane and low carbon ammonia in the future, Haugane said.
