Equinor Signs 15-Year Deal to Supply LNG to Deepak Fertilisers
Norwegian energy company Equinor has recently announced a significant 15-year agreement to provide liquefied natural gas (LNG) to Deepak Fertilisers, an Indian fertilizer and petrochemical company. This deal is set to cover an annual supply of approximately 650,000 metric tons of LNG, equivalent to 9 terrawatt hours, starting in 2026.
Deepak Fertilisers plans to utilize the LNG predominantly as feedstock for its newly established plant, which focuses on the production of ammonia for the manufacturing of fertilizers and petrochemicals. With this agreement in place, the company aims to enhance its value-chain from gas to ammonia, the essential ingredient in fertilizers, while also ensuring reliable and stable supplies of feedstock.
Sailesh C. Mehta, the Chairman and Managing Director of Deepak Fertilisers and Petrochemicals Corporation, expressed his optimism about the deal, stating, “The agreement will provide reliable supplies of feedstock which will further strengthen Deepak Fertilisers’ value-chain from gas to ammonia, the key ingredient in fertilizers. The agreement will help us absorb global volatility as well as enhance overall margins.”
Unfortunately, financial terms of this agreement were not disclosed to the public. However, Equinor’s partnership with Deepak Fertilisers is expected to contribute to increased stability and enhance profitability for both entities.
Equinor’s long-term commitment to Deepak Fertilisers highlights the growing importance of LNG supply in the petrochemical and fertilizer industry. With this deal, Equinor reinforces its position as a reliable and significant supplier of LNG, catering to the increasing demands of companies worldwide.
As the world continues to seek cleaner and more sustainable sources of energy, Equinor’s role as a provider of LNG will become an integral part of the global energy transition. This agreement with Deepak Fertilisers serves as a testament to Equinor’s dedication to meeting the evolving needs of its customers and contributing to a more environmentally-conscious future.
Analyst comment
Positive news: Equinor signing a 15-year deal to supply LNG to Deepak Fertilisers is positive for both companies. It will provide Deepak Fertilisers with reliable and stable supplies of feedstock for its ammonia production, enhancing its value chain and overall margins. Equinor solidifies its position as a significant LNG supplier, contributing to increased stability and profitability for both entities. This deal highlights the importance of LNG supply in the petrochemical and fertilizer industry and aligns with the global energy transition towards cleaner and sustainable sources of energy.
