Indian Oil close to signing LPG import deal with Algeria's Sonatrach for 2027; sources say

Business Recorder said Indian Oil Corp, India's largest refiner, has reportedly agreed terms with Algeria's Sonatrach for LPG supplies in 2027, citing three trade sources. Under the arrangement, the state firm would lift one very large gas carrier each month, holding 45,000 to 55,000 metric tons of propane and butane. The cargoes are to be lifted on a free-on-board basis.

The agreement comes as India widens its LPG sources, a cooking fuel, to lessen dependence on the Middle East after a recent Strait of Hormuz blockade disrupted energy flows and forced rationing. Indian Oil had a term contract with Sonatrach several years back, but later shifted its buying to Middle Eastern suppliers, one source noted. A second source said Algerian LPG prices are below the Saudi Aramco Contract Price.

Algerian LPG shipments to India began in June, and about 110,000 tons are expected in August, according to preliminary LSEG trade flow data. India has also raised its intake of US LPG and reportedly plans to source up to a quarter of its 2027 imports from the United States. The three state retailers are also set to launch a combined tender for American LPG, while Indian Oil and Sonatrach have not replied to Reuters emails seeking comment.