Petronet LNG Inks ₹1,200 Crore Regasification Deal with Deepak Fertilisers Subsidiary

11 Jul 2025 , 04:02 PM

In a move aimed at reinforcing long-term partnerships within India’s industrial gas sector, Petronet LNG Ltd. (PLL) has entered into a regasification agreement with Performance Chemiserve Ltd. (PCL), a group company under Deepak Fertilisers.

The contract, signed Thursday, covers the handling of around 25.6 TBTUs of LNG annually at Petronet’s Dahej terminal. The agreement is scheduled to begin between May and July 2026, with services extending until the end of December 2031.

This is a 5.5-year commitment valued at ₹1,200 crore, with an upside clause that may push revenues higher by up to 20%, depending on offtake and utilisation. The LNG to be regasified under this arrangement will support DFPCL’s manufacturing operations at Taloja, where natural gas is a key input for multiple downstream products.

Petronet will manage the full range of regas operations receiving, storing, and converting the imported LNG for industrial use. According to people close to the deal, the initial ramp-up will take place in 2026, after which volumes are expected to stabilise.

The signing was attended by A.K. Singh, Managing Director & CEO of Petronet LNG, and Sailesh C. Mehta, Chairman of PCL and its parent firm Deepak Fertilisers and Petrochemicals Corporation Ltd. The event was held at PLL’s corporate office in Delhi.

This agreement follows a recent LNG sourcing deal between DFPCL and Norwegian energy major Equinor, positioning Deepak Fertilisers to manage supply and infrastructure together from imports to final use.

For Petronet, this contract reinforces its place in the industrial gas value chain. The company, promoted by PSU giants including GAIL, ONGC, IOCL, and BPCL, currently manages two-thirds of India’s LNG imports and accounts for 43% of the country’s regasification capacity.

In FY 2024–25, PLL reported handling nearly 18 MMTPA of LNG through its Dahej and Kochi terminals. It generated revenue of approximately ₹51,000 crore, supplying about one-third of India’s total natural gas demand.

The company is now working on capacity expansion at Dahej and developing a greenfield terminal at Gopalpur, Odisha, as part of its east coast entry. It is also constructing a PDH/PP complex and a versatile jetty to accommodate LNG, ethane, and propane at Dahej.

Meanwhile, Deepak Fertilisers continues to build its vertical integration across fertilisers, chemicals, and mining solutions. Through PCL, it is tightening control over energy sourcing a critical input for its ammonia and nitric acid-based product lines.

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