Petronet and Deepak Fertilisers announced the signing of the agreement in separate statements on Thursday.
Performance Chemiserve Limited (PCL), a step-down subsidiary of Deepak Fertilisers signed the deal with Petronet.
The deal is for 5.5 years. It is expected to start between May 2026 and July 2026 and end on December 31, 2031.
According to Petronet, the deal is worth 12 billion rupees ($140 million), with an upside potential to generate an additional revenue of up to 20 percent, over the contract duration.
Under the terms of the agreement, Petronet will regasify approximately 25 TBTUs of LNG annually, post an initial ramp-up period, primarily at its Dahej terminal.
The regasified gas will be primarily supplied to Deepak Fertilisers and PCL’s manufacturing facilities.
Deepak Fertilisers said the agreement will help it in “ensuring logistical and commercial arrangements required to receive imported LNG to its manufacturing facilities via the existing national gas grid in Taloja, Mumbai, helping deliver its integrated gas-to-chemicals value chain strategy.”
The company stated that this contract builds upon its LNG supply agreement with Norway’s Equinor, which was signed last year.
In February 2024, Equinor and Deepak Fertilisers signed a 15-year deal for supplies of LNG with deliveries starting in 2026.
The agreement covers an annual supply of around 0.65 million tons of LNG.
Petronet’s expansion
On the other hand, this agreement with Deepak Fertilisers further expands Petronet’s long-term business horizons.
Petronet handled around 18 mtpa of LNG in FY 2024-25 through its Dahej and Kochi terminals.
Last year, Petronet launched two 180,000 cbm LNG tanks at the 17.5 mtpa Dahej terminal in western Gujarat state.
These two tanks add to six existing storage tanks at the Dahej terminal with a total capacity of 932,000 cbm.
In addition, Petronet is currently expanding its Dahej LNG terminal with about 5 mtpa of new capacity.
It expects to launch the new capacity later this year.
