Indian Oil signs five-year LNG contract with Trafigura.
Three trade sources confirmed on Wednesday that Indian Oil Corp, the country's largest refiner, had agreed to a five year liquefied gas (LNG), import agreement with Trafigura. The prices will be linked to the U.S. Henry hub benchmark.
One source said that Trafigura would supply between three and four LNG cargos this year. From next year onwards, Trafigura is expected to deliver six LNG cargoes per year.
Trafigura or Indian Oil did not immediately comment.
One source said that India wants to increase its imports from the United States to improve its trade balance. Traders are also looking to redirect some LNG intended for China to India.
According to Kpler, India was the fourth largest LNG importer in the world, importing 26.58 millions metric tons last year.
The U.S. ranks second in India as a supplier of energy, but both sides want to increase volumes for India's fast-growing economy.
In March, it was reported that India is considering a plan to eliminate import taxes on U.S. LNG in order to increase purchases and reduce its trade surplus with Washington.
GAIL India, a LNG importer from India, had recently also issued a tender for a stake in a LNG project in the U.S. along with a 15 year import deal. (Reporting from Nidhi in New Delhi; additional reporting by Emily Chow, in Singapore; editing by Christian Schmollinger & Savio D’Souza).
(source: Reuters)
