India’s Torrent Power signs LNG supply deal with BP

Spanish Market: Natural gas
02/06/25

India's Torrent Power has signed a long-term LNG deal with BP, with Torrent receiving six LNG cargoes a year in 2027-36 under a tender that was issued in July 2024, sources tell Argus.

This is BP's first LNG supply deal with an Indian major, which is heard to be priced at 10.99pc slope to Brent, the lowest heard for India in the recent years, sources said.

Torrent Power will receive a total of 410,000 t/yr of LNG on a delivered basis at the 17.5mn t/yr Dahej LNG terminal on India's west coast, assuming an LNG cargo of 68,000t.

Under the deal, BP will supply cargoes mostly during the summer, with an option that allows Torrent Power to adjust the volume and timing of deliveries.

Torrent Power is set to utilise two cargoes each for its gas-based power generation with a combined capacity of 2730MW, a city gas distribution business under Torrent Gas, as well as merchant power and gas trading, sources close to the deal said.

The firm was last in the market seeking 14 LNG cargoes for delivery in July 2025-May 2030 in a tender that is scheduled to close on 4 June. The combined deals would help Torrent Power to secure its overall gas needs to meet peak power demand during the summer.

BP is set to secure supplies for the deal from its 3.4mn t/yr Coral South FLNG offshore Mozambique and from Oman LNG's 11.4mn t/yr Qalhat facility, sources added.

The deal is likely to bolster BP's expansion in India's gas market, especially as its exploration business with Reliance Industries (RIL) weakens as output has started to decline from the KG-D6 eastern offshore block, which produces a third of India's domestic natural gas.

RIL reported output from KG-D6 at 26.7mn m³/d in January-March, down by 11pc on the year and by 5pc on the quarter, as per its latest earnings presentation.

In a separate deal, BP is also set to supply 4-6 LNG cargoes a year to India Gas Solutions (IGS), another joint venture with RIL that focuses on sourcing, marketing and transporting natural gas in India, sources tell Argus.

LNG supplies under the deal are expected to start in 2028, wherein IGS would use Torrent Power's regasification capacity at the Dahej import terminal to import the cargoes, it added.

IGS is currently marketing and contracting domestic HPHT gas from RIL's KG-D6 block to downstream city gas distribution entities.

LNG supplies under IGS are expected to be redirected towards RIL's 1.36mn b/d Jamnagar refinery, which receives 7-8mn m³/d of HPHT gas from the KG-D6 block.

By Rituparna Ghosh

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