India's Indian Oil to Import up to 660,000 Tonnes of Algerian LPG Annually

en.Wedoany.com Reported - Indian Oil Corp. has finalized an agreement with Algeria's national oil company, Sonatrach, to import liquefied petroleum gas (LPG) throughout 2027. The deal adds a North African supply source for India, coming amid efforts by the country to diversify its procurement following recent disruptions in Middle East energy flows.

Cargoes will be shipped on very large gas carriers on a free-on-board basis. Traders said the contract is priced below Saudi Aramco's contract price. Indian Oil and Sonatrach have not disclosed the contract value, the date of the first cargo loading, the loading port, or the specific pricing formula.

Indian Oil previously executed long-term LPG supply contracts with Sonatrach before shifting its procurement to Middle Eastern suppliers. India resumed imports of Algerian LPG in June 2026, with 22,200 tonnes imported that month and 21,600 tonnes in July; as of August 28, August imports had reached 110,700 tonnes, accounting for approximately 10% of India's total LPG imports that month.

In August, the United States ranked first as a source of India's LPG imports with 622,500 tonnes supplied, the UAE supplied 140,300 tonnes, and Algeria rose to third place. India's LPG imports that month totaled approximately 1.08 million tonnes, down from 1.91 million tonnes in the same period last year.

India consumes approximately 33 million tonnes of LPG annually, with up to about 65% of that depending on imports, and supplies from West Asia accounting for roughly 90% of import volumes. India plans to procure cargoes from the United States in 2027 equivalent to up to 25% of its LPG imports, with Indian Oil, Hindustan Petroleum, and Bharat Petroleum expected to organize joint procurement.

Sonatrach's GP1Z facility in the Arzew industrial zone in Algeria handles LPG processing and loading operations. The company installed and commissioned four new offshore loading arms at the M6 jetty in 2025, with another four loading arms at the D1 jetty scheduled for replacement.