Indian Oil inks five-year deal with Trafigura to import US-linked LNG

Indian Oil Corp has signed a five-year import deal with trader Trafigura to buy 2.5 million metric tons of liquefied natural gas (LNG) in a $1.3-$1.4 billion deal, Chairman A S Sahney said on Wednesday.

Supplies under the deal would begin from the second half of this year, he said, adding that the price of the LNG is linked to the US Henry Hub benchmark.

Trafigura will supply 2.5 million tonnes of LNG, equivalent to about 27 cargoes under the deal, he said.

Earlier in the day, Reuters had reported, citing sources, that Trafigura will supply three to four LNG cargoes this year and six cargoes annually from next year.

India is looking to raise its imports of US energy to fix its trade balance with the world's top economy, and traders are looking to reroute some of the LNG meant for China into India, one of the sources said.

India is the world's fourth-largest LNG importer, shipping in 26.58 million metric tons of the fuel last year, according to Kpler data.

The US is India's second-biggest supplier, but the two sides are looking to ramp up volumes for India's energy-hungry economy, one of the fastest growing in the world.

Reuters reported in March that India is considering a proposal to scrap import taxes on US LNG to boost purchases and cut its trade surplus with Washington.

LNG importer GAIL India had also recently issued a tender seeking a stake in an LNG project in the US, along with a 15-year import deal.

(Reporting by Nidhi Verma in New Delhi, additional reporting by Emily Chow in Singapore and Sethuraman NR in Bengaluru; Editing by Christian Schmollinger, Savio D'Souza and Louise Heavens)