Gujarat Energy Signs 10-Year Pact with ADNOC to Procure 4 Million Tonnes of LNG
India's state-backed city gas major Gujarat Energy Limited (GEL)—formerly Gujarat Gas Limited—has entered into a 10-year liquefied natural gas (LNG) sales and purchase agreement (SPA) with Abu Dhabi National Oil Company (ADNOC). Under the agreement, GEL will import up to 4 million tonnes of LNG over a decade, with commercial deliveries scheduled to begin in 2028.
The agreement marks the first sale of molecules from the international portfolio of XRG, ADNOC’s global investment subsidiary, connecting production assets located outside the Persian Gulf directly with the Indian downstream market.
Key Commercial and Operational Terms
The supply arrangement will average approximately 0.4 million tonnes per annum (mtpa)—equivalent to roughly six to seven LNG cargoes annually. The contracted volume is estimated to support between 1.3 million and 1.5 million cubic metres per day of gas supply.
Key contract details include:
- Pricing Mechanism: Deliveries will be linked to the US Henry Hub benchmark, providing tariff transparency and dampening exposure to erratic spot benchmarks.
- Delivery Timeline: Deliveries are set to commence in 2028 and run through 2038.
- Terminal Access: GEL has approved regasification capacity bookings at GSPC LNG's 5 mtpa Mundra terminal in Gujarat, which provides direct pipeline connectivity into western India’s major consuming centers.
Significance for Gujarat's Industrial Hubs
The deal represents a crucial step in cementing fuel availability for Gujarat's industrial corridors, most notably the ceramic cluster in Morbi. The region consumed roughly 1 million cubic metres per day of gas from GEL in recent months, but demand has faced intense competition from alternate liquid fuels such as propane. Long-term indexed LNG enables city gas distributors to offer competitive, stable long-term pricing to industrial and commercial consumers.
Avantika Singh Aulakh, Managing Director of Gujarat Energy, stated that natural gas remains central to driving India's transition to cleaner energy, improving industrial efficiency, and accelerating cleaner mobility and household piped gas networks across the company's footprint covering 44 districts across six states.
Strengthening India-UAE Energy Corridors
The pact marks ADNOC's fifth long-term LNG supply contract in India, following prior off-take agreements with public-sector peers such as GAIL, Indian Oil Corporation, and Hindustan Petroleum Corporation Limited (HPCL).
Executed through ADNOC’s integrated marketing and trading platform established in Abu Dhabi Global Market, the contract underscores how Gulf producers are increasingly building trading flexibility to channel global gas portfolios into high-growth Asian economies. For Indian energy investors, long-term procurement at predictable benchmark-linked pricing provides margin visibility for downstream utilities and strengthens domestic energy security amid ongoing geopolitical fluctuations across global fuel markets.
