Indian Oil Corp (IOC), India’s largest refiner, has finalized an agreement with Algeria’s Sonatrach to import liquefied petroleum gas (LPG) in 2027, according to three trade sources familiar with the deal.
Under the agreement, IOC will receive one very large gas carrier of LPG each month, with each shipment containing between 45,000 and 55,000 metric tons of propane and butane.
The deal is part of India’s efforts to diversify LPG supplies away from the Middle East after disruptions around the Strait of Hormuz affected energy flows and forced the country to ration supplies of cooking gas.
Algeria’s LPG prices are reportedly lower than Saudi Aramco’s contract prices, while the shipments will be purchased on a free on board basis.
India resumed LPG imports from Algeria in June and is expected to receive about 110,000 tons in August, according to preliminary LSEG trade data.
India is also increasing purchases of U.S. LPG and plans to source as much as 25% of its LPG imports from the United States in 2027. State run refiners IOC, Hindustan Petroleum Corp and Bharat Petroleum Corp are also expected to jointly tender for U.S. LPG supplies.
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