Deepak Fertilisers, Equinor ink major LNG supply deal to boost India’s chemical and fertiliser sectors

Deepak Fertilisers and Petrochemicals Corporation Limited (DFPCL), a pivotal player in India’s industrial chemicals and fertilisers production, has forged a significant long-term supply agreement with Equinor, the Norway-based international energy giant. This strategic alliance marks a monumental step for DFPCL, enhancing its comprehensive value chain from gas through ammonia to a broad spectrum of downstream fertilisers, industrial chemicals, and mining chemicals. This end-to-end partnership is poised to lay a robust foundation for the long-term sustainability and growth of all DFPCL’s product segments.

Equinor, formerly known as Statoil, has been a leading force in the oil and gas sector for over five decades, boasting a market capitalization of USD 75 billion, with the Norwegian Government holding a majority share. The agreement, signed by Irene Rummelhoff, Executive Vice President of Equinor, and Sailesh C. Mehta, Chairman & Managing Director of DFPCL, stands as one of Equinor’s most significant contracts with a private sector entity in India.

Under the terms of this landmark agreement, Equinor will supply up to 0.65 million tonnes of Liquefied Natural Gas (LNG) annually to DFPCL for a duration of 15 years, starting from 2026. This arrangement not only caters to the burgeoning LNG demands within India but also supports DFPCL’s escalating captive needs. The LNG will be delivered to India’s west coast, with DFPCL in the advanced stages of finalizing the Regasification Terminal, ensuring seamless gas pipeline grid connectivity to its plants.

Furthermore, the agreement opens avenues for future collaborations between the two companies in the realms of petrochemical feedstocks and strategic decarbonization pathways. Sailesh C. Mehta expressed enthusiasm about the partnership, highlighting its potential to stabilize DFPCL’s value chain amidst global volatility and enhance margins. He also noted the possibility of exploring further strategic tie-ups in the chemical sector and initiatives to reduce the carbon footprint.

Helge Haugane, Senior Vice President for Gas & Power at Equinor, echoed Mehta’s sentiments, emphasizing the importance of ammonia as a crucial component for agriculture and food security. Haugane praised the agreement’s role in strengthening Equinor’s position in the Atlantic basin and its relationship with key players in the rapidly expanding Indian market. He expressed pride in supporting India’s domestic fertiliser supply through natural gas feedstock and anticipates further collaboration on low carbon initiatives.

The agreement between Deepak Fertilisers and Equinor is a testament to the evolving landscape of India’s energy and chemical sectors, aiming for sustainability and efficiency. This partnership not only ensures a steady supply of crucial raw materials but also signals a shift towards cleaner energy sources and a commitment to reducing environmental impact. By leveraging Equinor’s global expertise and resources, Deepak Fertilisers is poised to enhance its competitive edge, sustainability credentials, and contribution to India’s self-reliance in fertiliser production.