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Cheniere Energy, Inc. LNG and Indian Oil Corporation, one of India’s largest state-run energy firms, are negotiating a major long-term liquefied natural gas (LNG) supply agreement. The deal, expected to span 15 years, will secure 1.5 to 2 million metric tons of LNG annually, beginning in April 2027.
Reasons Behind the Deal
This potential agreement is part of a broader push by Indian energy companies to secure stable LNG supplies from the United States as part of a drive to avoid the tariff spree of the new U.S. administration. Following President Trump’s recent decision to lift restrictions on new U.S. LNG export permits, Indian companies are intensifying their efforts to finalize such agreements.
Indian Oil’s Energy Expansion Strategy
Indian Oil is currently undergoing key refinery expansion projects, anticipating the commencement of operations at its Panipat refinery by 2026 with a capacity of 500,000 barrels per day (bpd).
The company is also awaiting regulatory approval for the construction of a 180,000 bpd refinery in Nagapattinam, Tamil Nadu. Once approved, the construction process of the facility will take around 40-50 months.
India’s Attempt to Strengthen Energy Ties
In the financial year 2026, India projects a rise in fuel consumption, with the demand for petrol and diesel expected to grow by 6-7% and 4%, respectively. India looks forward to securing cost-effective energy imports from diverse sources and has increased the number of suppliers from 27 to 39, Argentina being one of them.
Indian companies like Indian Oil, GAIL India and Bharat Petroleum Corporation Limited are actively engaging with American suppliers to secure additional LNG. As part of these efforts, GAIL India is considering an LNG offtake agreement and potential equity stakes in the U.S. export projects to foster strong energy ties with the United States.
LNG’s Zacks Rank and Key Picks
Houston, TX-based Cheniere Energy Inc. is primarily engaged in businesses related to liquefied natural gas. Currently, LNG has a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at some top-ranked stocks like ARC Resources Ltd. AETUF, Sunoco LP SUN and Gulfport Energy Corporation GPOR.While ARC Resources and Sunoco currently sport a Zacks Rank #1 (Strong Buy) each, Gulfport Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Calgary, Canada-based ARC Resources Ltd. is engaged in the exploration, acquisition and development of oil and natural gas properties in western Canada. The Zacks Consensus Estimate for AETUF’s 2024 earnings indicates 62.77% year-over-year growth.