India has taken a major step to secure its long-term energy needs by extending a crucial liquefied natural gas LNG Partnership import agreement with Qatar. In a landmark move, Petronet LNG Ltd, India’s largest LNG importer, has signed a $78 billion deal with QatarEnergy to continue purchasing LNG for another 20 years, until 2048. This agreement is not only about energy but also about building a stronger strategic partnership between the two nations.
This renewed contract comes at a time when India is working hard to shift towards cleaner energy sources. The government aims to raise the share of natural gas in the country’s energy mix from about 6% to 15% by the year 2030. Natural gas is a cleaner-burning fuel compared to coal and oil, making it a key part of India’s plans to reduce carbon emissions and promote sustainable development.
What the Deal Means for India
Under the new deal, India will continue to import 7.5 million tonnes of LNG annually from Qatar. The agreement is expected to bring substantial financial benefits to India. Experts say the revised pricing formula will help India save around $6 billion over the duration of the contract compared to what it would have paid under the old terms. This is a major win for India, especially at a time when global energy prices remain volatile.
The LNG imported from Qatar is mainly used to generate electricity, run factories, power city gas distribution networks, and even fuel vehicles in some parts of the country. By locking in a long-term supply at favorable prices, India is ensuring energy security for its industries, households, and growing population.
A Boost to Bilateral Relations
The agreement was finalized during the state visit of Qatar’s Amir, Sheikh Tamim bin Hamad Al-Thani, to India. This high-level visit further strengthened diplomatic and economic ties between the two countries. During discussions, both sides expressed a desire to double their bilateral trade, aiming to reach $28 billion annually by 2030.
India and Qatar have shared strong trade and cultural ties for decades. Qatar is home to over 800,000 Indian expatriates, making it one of the largest Indian communities abroad. These Indians contribute significantly to Qatar’s economy and also send billions of dollars in remittances back home. Energy cooperation now adds another strong pillar to this long-standing relationship.
Why Qatar Matters in India’s LNG Strategy
Qatar is the world’s second-largest LNG exporter and has been one of India’s most reliable energy partners. In the financial year 2022-23, Qatar accounted for more than half—about 54%—of India’s total LNG imports. This long-standing trust and mutual reliability made the renewal of the deal almost a certainty, but the new terms are clearly more favorable for India.
Petronet LNG has been sourcing gas from Qatar since 1999, and over the years, this relationship has expanded and matured. The renewed agreement shows that Qatar is willing to support India’s long-term energy vision.
India’s LNG Demand Set to Soar
India’s energy demand is growing rapidly as the economy expands and more people gain access to electricity, gas, and infrastructure. According to estimates from global energy analysts, India’s natural gas consumption is expected to grow by nearly 60% by 2030 compared to current levels.
To meet this demand, LNG imports will have to increase substantially. India currently imports about half of its natural gas needs and is planning to boost that number. The government is investing in building new LNG terminals, expanding gas pipeline networks, and promoting the use of natural gas in sectors such as transportation and manufacturing.
India sees natural gas as a “transition fuel” that will help bridge the gap between traditional fossil fuels and cleaner renewable energy sources like solar and wind. LNG is particularly useful because it is easy to store, transport, and use across a wide range of applications.
Diversifying Beyond Qatar
Even though Qatar is a key supplier, India is not putting all its eggs in one basket. In recent years, Indian oil and gas companies have been working to diversify their LNG sources. New deals have been signed with companies from the United Arab Emirates, the United States, and France to ensure a steady and flexible supply of gas from different regions.
For instance, GAIL (India) Ltd, one of the country’s top gas companies, has signed an agreement to take a 26% stake in a U.S.-based LNG project. Starting in 2029 or 2030, GAIL will import 1 million tonnes of LNG annually from this American facility. This not only diversifies India’s sources of energy but also helps in managing global price risks.
The government is also encouraging companies to invest in LNG shipping and storage infrastructure so that India can handle higher import volumes in the coming years. These steps are crucial for building a robust, future-proof gas supply chain.
Cleaner Fuel, Greener Future
The renewed LNG deal also supports India’s efforts to transition to cleaner fuels. Natural gas emits significantly less carbon dioxide than coal and oil. It also doesn’t produce harmful pollutants like sulfur dioxide or particulate matter, which cause health issues and air pollution.
By increasing the use of natural gas, India can reduce its reliance on dirtier fuels, especially in power generation and industrial applications. This will contribute to improved air quality and help the country meet its global climate commitments under the Paris Agreement.
The Road Ahead
India’s long-term partnership with Qatar marks a new chapter in the country’s energy journey. As India works to become a $5 trillion economy, access to reliable and affordable energy is key. With LNG expected to play a central role in that journey, the deal with Qatar ensures that India has a secure and predictable supply for decades to come.
This agreement is not just a business transaction—it’s a strategic move that will impact India’s economy, environment, and international relations for years to come. The coming years will likely see more such energy partnerships as India continues to balance growth with sustainability.
