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.

Story Continues

Dallas, TX-based Sunoco LP is a master limited partnership that deals with the distribution of motor fuel to roughly 10,000 customers, including independent dealers, commercial customers, convenience stores and distributors. The Zacks Consensus Estimate for SUN’s 2024 earnings indicates 184.11% year-over-year growth.

Gulfport Energy is an independent natural gas and oil company focused on the exploration and development of natural gas and oil properties in North America. The Zacks Consensus Estimate for GPOR’s 2024 earnings indicates 108.53% year-over-year growth.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Sunoco LP (SUN):Free Stock Analysis Report

Cheniere Energy, Inc. (LNG):Free Stock Analysis Report

Gulfport Energy Corporation (GPOR):Free Stock Analysis Report

Arc Resources Ltd. (AETUF):Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

View Comments