It’s been a busy period in the halls of India Energy Week 2025 with a number of LNG agreements and MOUs being signed in New Delhi.
One of the most eye-catching was India’s first LNG export deal, with IOCL signing a sale agreement with M/s Yogya Holdings Nepal for export of around 1,000 metric tonnes (MT) of LNG to Nepal under a five-year deal, marking the first sale of LNG from India by cryogenic trucks through Dhamra Terminal in Odisha.
But the stand-out one financially saw IOCL and ADNOC sign a 14-year sales and purchase agreement (SPA) for up to 1.2 million tonnes per annum (mtpa) of LNG from 2026, in a deal worth over $7bn.
ADNOC also signed a five-year term LNG offtake with BPCL covering procurement of 2.4 MMT of LNG, starting April 2025, which is extendable by another five year with mutual consent. BPCL also signed an MOU with National Sugar Institute, Kanpur, exploring the potential of sweet sorghum for bioethanol production.
ONGC Videsh and Petrobas signed an MOU for joint collaboration in the upstream industry in Brazil and India, and third countries involving oil and gas projects, and will explore opportunities across low-carbon solutions, digitalisation and human capital.
TotalEnergies and the Gujarat State Petroleum Corporation Limited (GSPC), a state-owned oil and gas company, have signed a 10-year SPA starting in 2026. TotalEnergies will supply GSPC with 400,000 tonnes of LNG, amounting to six cargoes per year. In another novel tie up, BPCL partnered with Eco Wave Power to develop India’s first wave energy pilot project in Mumbai, through a 100kW pilot installation.
In new research, S&P Global Insights finds the acceleration of the expansion of LNG is forging connections between regional gas markets.
“This growth is driven by rising energy demand, lower emissions compared to other fossil fuels, technological advancements that unlock new resources and reduce costs, and increased supply diversity as new market entrants emerge,” it notes.
“Both importing and exporting countries are impacted by the globalisation of gas markets. For instance, LNG-exporting nations like the US may face rising domestic hub market prices due to heightened export demand. Furthermore, pipeline flows can be indirectly influenced by LNG, as market players engage in arbitrage across different gas transport routes.”
The simultaneous growth of the LNG market and the increasing reliance of power generation on gas are driving the emergence of globally interconnected gas and power markets, resulting in significant shifts in market dynamics, it adds.
“Gas prices will have a more pronounced effect on power prices, particularly in liberalised markets where gas-fired power plants often determine the market-clearing price. And the dynamics of power and gas markets will become more globally interconnected, with gas prices serving as a key transmission mechanism.”
Panel discussion: LNG must be affordable
In a panel on ‘Globally traded LNG – Shaping business models for the next era’, delegates heard that India’s gas demand is poised to grow significantly by 2030 but for LNG to be a viable option, it must be affordable and contracts need to be reliable.
Sandeep Jain, Executive Director, Gas, Indian Oil Corporation, highlighted India’s resilience in managing the 2022 energy crisis that led to a price shock and singled out the city gas distribution sector to drive India’s increasing LNG demand, supplemented by demand from industrial and refining sectors.
He pointed out that of 25 GW of installed gas-based power generation, only 16 GW was operational due to unaffordable prices at $16 mmbtu, adding that if natural gas could be made available in the $5-9 mmbtu range, the power generation sector could significantly contribute to LNG demand.
Nakul Raheja, Country Head of Shell Energy, emphasised that India’s shift back to long-term contracts ensures stable supplies, especially after the Ukraine war exposed vulnerabilities and created a 5 MMT supply gap.
Abhilash Gupta, Managing Director and CEO of THINK Gas and AG&P Pratham, highlighted the potential for LNG trucking in India, pointing to China’s success as a model.
He said infrastructure development remains key, and a coordinated approach rather than heavy government intervention could unlock its potential, and also stressed the importance of addressing high logistical costs and integrating natural gas into Goods and Services Tax (GST) to enhance affordability.
The panel agreed that as India strengthens its role in the global LNG market, strategic long-term engagements and infrastructure enhancements will be critical to ensuring energy security, sustainability and economic growth.
LNG imports need to double
India and China have emerged as top LNG markets in Asia in recent years but high prices have impacted demand. India’s plan to add 500 million metric standard cubic metres per day (MMSCMD) of gas consumption by 2030 means it might have to rely heavily on imports.
The limited growth in domestic supply means India’s LNG imports will need to more than double to around 65 bcm a year by 2030 to meet rising demand, according to the International Energy Agency, which forecasts a 60% rise in the country’s natural gas consumption by 2030 to 103 bcm.
The growth trajectory, leading to levels akin to present-day Saudi Arabia, is supported by three trends; the rapid expansion of India’s gas infrastructure, a rebound in domestic natural gas production and an expected easing of global gas market conditions.
As legacy contracts expire, India faces a widening gap between contracted supply and projected demand after 2028, potentially increasing exposure to spot market volatility – hence the need to secure long-term contracts.
LNG import capacity to meet this requirement could fall short by 240 MMSCMD even after the proposed infrastructure expansion, states The Institute for Energy Economics and Financial Analysis (IEEFA).
It notes that gas expansion in India will not be easy, especially with the requirement of expensive infrastructure investments that run the risk of becoming stranded.
“The fact that there is a very concerted effort to use new technologies and India being keen to gain global leadership in producing and exporting greener fuels, such as green hydrogen, will compound the stranded assets risk,” it states.
