India's top oil firm IOC has signed deals to import liquefied natural gas from UAE's Abu Dhabi Gas Liquefaction Co Ltd and TotalEnergies of France on a long-term basis. Indian Oil Corporation (IOC) signed the deals during Prime Minister Narendra Modi's visit to France and the UAE last week.

A "Head of Agreement between Indian Oil Corporation Limited and TotalEnergies Gas and Power Ltd (TotalEnergies) to establish a long-term LNG sale and purchase agreement (SPA)," according to the list of agreements put out by the Ministry of External Affairs.

IOC signed a deal to import 1.2 million tonnes per annum of LNG from Adnoc-LNG for 14 years starting in 2026. The deal with TotalEnergies is for the import of 0.8 million tonnes a year of LNG for 10 years starting in 2026.

This is the 1st long-term deal TotalEnergies has signed with an Indian company. Also, this is the 1st time an Indian company has signed a long-term LNG import deal with Adnoc.

TotalEnergies is the 3rd largest LNG supplier in the world and would be supplying LNG to IOC from their diversified portfolio across the world.

IOC is sewing new deals in line with the government goal of increasing the share of natural gas in the energy basket to 15 per cent by 2030 from the current 6.2%.

Long Term LNG contracts play an important role in balancing out the inherent volatility of spot LNG market and thus make it an affordable and reliable LNG supply.

These agreements would not only diversify the supply source of LNG for IOC but also would help in meeting the growing demand for cleaner and more sustainable fuel sources, an official said.

ADNOC LNG is the national oil and gas company of the Abu Dhabi government and is the oldest supplier of natural gas from the Middle East.

India and UAE have a CEPA (Comprehensive Economic Partnership Agreement) with UAE Govt which provides for zero customs duty to be applied on LNG imports from UAE against an applicable customs duty of 2.5 % plus surcharge, the official added.

LNG is natural gas that has been cooled to minus 162 degrees Celsius, changing it from a gas into a liquid that is 1/600th of its original volume. This allows it to be shipped in specially designed LNG vessels.

India has seven LNG import facilities on the east and west coasts. IOC operates a 5 million tonne a year import terminal at Ennore in Tamil Nadu.