Sonatrach Finalizes Long-Term LPG Supply Agreement with Indian Oil

Indian Oil Corporation (IOC) has concluded a significant long-term agreement with Algeria's state-owned energy company, Sonatrach, for the import of liquefied petroleum gas (LPG). Under this arrangement, scheduled to commence in 2027, IOC will procure approximately 45,000 to 55,000 metric tons of LPG monthly from Sonatrach. This strategic partnership is poised to bolster India's energy security by reducing its reliance on Middle Eastern suppliers and mitigating potential supply disruptions, such as those associated with tensions in the Strait of Hormuz.

A key aspect of this agreement is the competitive pricing offered by Algeria. The LPG supplied by Sonatrach is noted to be more cost-effective than prices from Saudi Aramco, presenting an economic advantage for India while also diversifying its energy import portfolio. The deal, structured on a 'Free-on-Board' (FOB) basis, specifies that the responsibility for transportation will transfer to Indian Oil Corporation once the cargo is loaded onto the vessel, with the shipments comprising a mixture of propane and butane gas.

This landmark agreement underscores Algeria's growing role as a reliable and competitive energy exporter on the international stage. By securing a major supply deal with one of the world's largest energy consumers, Sonatrach solidifies Algeria's position as a significant contributor to global energy markets and highlights its capacity to meet international demand with favorable terms.