Exclusive: In talks to secure crude supplies but won't rush into long-term contracts: Oil Minister

Finance Minister Nirmala Sitharaman in the interim budget announced financial assistance for the procurement of machinery to help in biomass collection.

India won't rush to sign more long-term deals amid concerns of price volatility, Hardeep Singh Puri, Union Minister of Petroleum and Natural Gas, told Moneycontrol in an exclusive interview.

The comments come a day after India signed  a 20-year Liquified Natural Gas (LNG) supply deal with Qatar, extending its current contract which expires in 2028

"If you sign a long-term agreement at a fixed price, and tomorrow the price comes down. People will accuse you of all kinds of things. So the beauty in all these deals is you sign long term, but benchmark it, so that you can’t lose on that," Puri said.

The International Energy Agency said in a report on Feb 7  that it expects India to be the largest source of global oil demand growth by 2030 and projects crude oil imports further to rise to 5.8 million barrels per day  (mb/d) by 2030 from the current 4.6 mb/d.

“I think in the energy reserve we are reaching a station, where, other than us, there are not going to be too many buyers. The US has emerged as the largest exporter of crude oil and gas," Puri added.

Puri said while India may not rush into deals, the country is in talks with potential supply pacts.

“I don’t agree with the Western narrative; you shouldn't vilify fossil fuels. Some countries have a lot of reserves but decide not to enter into long-term agreements, they might find after two, five or ten years that there are no takers for it,” Puri said.

India imported about 21 million tonnes of LNG in 2023, Bloomberg reported on February 5 citing ship-tracking data.

State-run Petronet's deal with QatarEnergy, announced on February 7,  is an extension of an existing LNG supply contract of around 7.5 million metric tonnes per annum (mmtpa)  LNG sale & purchase agreement on an FOB basis, signed on 31st July 1999 for supplies till 2028.

State-run Petronet signs long term LNG agreement with QatarEnergy

IEA in its report noted that India's clean cooking programmes has caused  LPG imports to surge nearly three-fold in the past decade and further initiatives will see demand growth continue through 2030.

(This article is from an exclusive interview of the minister. Full interview of the minister coming up soon.)