New Delhi: State-run Indian Oil Corp. Ltd (IOCL) has signed a term contract with commodities trading major Trafigura for supply of liquefied natural gas (LNG) for a five-year period, said Arvinder Singh Sahney, the chairman and managing director (CMD) of Indian Oil.
Addressing the media on Wednesday, the CMD said that the deal is valued around $1.3-1.4 billion and pricing of the LNG would be based on the US Henry Hub benchmark price. Supplies are likely to begin the second half of this year.
“We are looking at (supplies of) around 2.5 million tonnes (mt), 27 cargoes spread over 5 years starting from H2 of this year at around $1.3-1.4 billion,” he said.
The deal comes at a time when India is looking at securing long term contracts to ensure energy security. Among other sources in its portfolio, Trafigura sources LNG through a long-term agreement with US-based Cheniere Energy. India already is looking at enhancing its energy supplies from the US and talks on the bilateral trade agreement are already underway. India currently imports about 45% of its annual LNG requirement.
In the last financial year, Russian crude accounted for 22% of the crude purchased by the company, down from 30% in FY24.
“This was not due to sanctions since sanctions have come only in January 2025. The crude we are buying is totally on a commercial basis. This was a purely commercial decision,” the CMD said.
Russia has emerged as the top supplier of oil to India since FY22. However, amid the recent sanctions on vessels carrying Russian oil and some producers, the supplies have been impacted.
On Wednesday, the state-run oil marketing and refining major reported a 52.47% growth year-on-year growth in its consolidated net profit for the quarter-ended March at ₹8,367.63 crore.
Its consolidated net profit for FY25, however, fell 68% to ₹13,788.83 crore, from ₹43,161.15 crore in the previous fiscal. Its annual total income for the last fiscal fell 2.5% to ₹8.62 trillion.
The fall in profits can be attributed to lower refining margins and higher expenses. The gross refining margin for FY25 was $4.80 per barrel (bbl) down from $12.05/bbl in FY24
Sahney said that domestic sales of the company for FY25 was 95.375 mt as against 92.311 mt in the previous financial year. Total sales volume including exports is 100.292 mt as against 97.551 mt registering a growth of 3%.
Further, the finance cost for FY25 was ₹8,732 crore against ₹7,328 crore in the previous financial year.
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