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Deepak Fertilisers and Petrochemicals Corporation Limited (DFPCL) has announced a significant strategic move to bolster its operational efficiency and secure long-term access to cost-effective natural gas. Its subsidiary, Performance Chemiserve, has entered into a landmark 5.5-year LNG regasification agreement with Petronet LNG Limited (PLL), a leading player in India's LNG import and regasification sector. This collaboration underscores the growing importance of natural gas in India's fertilizer industry and the strategic partnerships driving its expansion. The deal is expected to generate ₹1,200 crore in revenue for PLL and marks a substantial step forward in India's energy security landscape.

Deepak Fertilisers Secures Long-Term LNG Supply: A Game Changer for the Indian Fertilizer Industry

This agreement, effective from July 2026 to December 2031, will see Performance Chemiserve receive regasified liquefied natural gas (LNG) sourced from Equinor, a major international energy company. This strategic sourcing of LNG ensures a reliable supply of crucial feedstock for Deepak Fertilisers' manufacturing facilities, significantly enhancing their operational efficiency and reducing reliance on fluctuating and potentially more expensive alternative fuel sources. The move highlights the company's commitment to long-term sustainability and cost optimization.

Key Highlights of the Deepak Fertilisers-Petronet LNG Agreement:

• Significant Revenue Generation: The agreement is projected to generate ₹1,200 crore in revenue for Petronet LNG over its 5.5-year duration. This reflects the substantial volume of LNG to be regasified and supplied.

• Long-Term Supply Security: The 5.5-year contract provides Deepak Fertilisers with the certainty of a stable and reliable LNG supply, mitigating risks associated with fluctuating energy prices and supply disruptions.

• Enhanced Operational Efficiency: Access to cost-effective natural gas will optimize Deepak Fertilisers' manufacturing processes, leading to improved production efficiency and reduced operational costs.

• Strategic Partnership: The collaboration between Deepak Fertilisers, Petronet LNG, and Equinor signifies the growing strategic alliances within India's energy sector and its commitment to secure and sustainable energy sources.

• Boost to India's Energy Security: This agreement contributes to India's broader energy security strategy by promoting the utilization of LNG as a cleaner and more efficient fuel source for key industrial sectors.

The Growing Role of LNG in India's Fertilizer Industry

India's fertilizer industry is a significant consumer of natural gas, a key feedstock in the production of ammonia and urea, essential components of fertilizers. The increasing demand for fertilizers to meet the growing agricultural needs of the country necessitates a reliable and cost-effective supply of natural gas. LNG imports are playing a critical role in meeting this demand, particularly in regions with limited access to domestic natural gas pipelines.

Benefits of LNG for Fertilizer Manufacturers:

• Reduced Production Costs: LNG offers a competitive price advantage compared to other fuel sources in many cases, leading to lower production costs for fertilizer manufacturers.

• Improved Environmental Performance: LNG is a relatively cleaner fuel compared to other fossil fuels, contributing to reduced greenhouse gas emissions and improved environmental sustainability.

• Enhanced Energy Security: Diversifying energy sources through LNG imports strengthens India's energy security and reduces reliance on a single source of fuel.

• Technological Advancements: Regasification technologies are continuously improving, making LNG a more efficient and cost-effective option for fertilizer manufacturers.

Petronet LNG: A Key Player in India's LNG Landscape

Petronet LNG is a crucial player in India's LNG import and regasification infrastructure. The company's extensive network of regasification terminals enables efficient distribution of LNG across the country, facilitating access to this crucial fuel source for a wide range of industries, including the fertilizer sector. This agreement with Deepak Fertilisers further solidifies Petronet LNG's position as a leading provider of LNG solutions in India.

Equinor's Contribution to India's Energy Transition

Equinor's involvement in this agreement highlights the increasing participation of international energy companies in India's energy sector. Equinor's commitment to supplying LNG underscores the growing global interest in supporting India's energy transition and meeting its growing energy demands.

Conclusion: A Win-Win for All Stakeholders

The Deepak Fertilisers-Petronet LNG regasification agreement represents a significant win-win scenario for all parties involved. Deepak Fertilisers secures a reliable and cost-effective supply of natural gas, enhancing its operational efficiency and competitiveness. Petronet LNG benefits from a substantial long-term contract, boosting its revenue and reinforcing its position in the LNG market. Equinor contributes to India's energy security and demonstrates its commitment to the Indian market. Furthermore, this collaboration paves the way for increased efficiency and sustainability within India’s crucial fertilizer industry, ultimately benefiting Indian agriculture and the national economy. This deal serves as a strong indicator of the evolving landscape of the Indian energy market and the increasing importance of LNG in supporting its continued growth and development.