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Friday / March 29. 2024
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This agreement is for annual supplies of up to 0.65 million tonnes over a period of 15 years, beginning 2026. 

Deepak Fertilisers and Petrochemicals Corporation Limited (DFPCL), one of India’s leading producers of industrial chemicals and fertilisers, and Equinor, an international energy company headquartered in Norway, have entered into a long-term supply agreement for Liquefied Natural Gas (LNG).

With this tie-up, DFPCL strengthens its value chain with an attractive long-term LNG contract to solidify its value chain from Gas to Ammonia to various downstream Fertilisers, Industrial Chemicals and Mining Chemicals. This end-to-end tie-up shall establish a strong long-term foundation for all of DFPCL’s product segments.

Equinor, erstwhile Statoil, is amongst the established leaders in the oil & gas sector over the last 50 years, with a market cap of USD 75 Billion wherein majority shares are owned by the Norwegian Government.

The agreement signed by Irene Rummelhoff, Executive Vice President, Equinor and Sailesh C. Mehta, Chairman & Managing Director, DFPCL, is one of the largest contracts signed by Equinor with a private sector company in India.

This agreement is for annual supplies of up to 0.65 million tonnes over a period of 15 years, beginning 2026.  The tie-up provides room for trading some LNG parcels in the growing LNG demands in India as well as accommodating DFPCL’s growing captive needs. The LNG will be delivered to the west coast of India. DFPCL is at an advanced stage of tying up the Re-gasification Terminal with the Gas pipeline grid connectivity to its plant’s doorstep already in place.

The LNG agreement also encourages the companies to further collaborate on petrochemicals feedstocks and strategic decarbonization pathways in the future.

“We are very happy to enter into this long-term agreement with Equinor for supply of LNG. This will put on a solid footing Deepak Fertilisers value-chain right from Gas to Ammonia to building block Nitric Acids to downstream Fertilisers, Mining Chemicals and Industrial Chemicals, helping it to absorb Global volatility as well as enhance overall margins.  We also look forward to exploring with Equinor, strategic tie-ups in our Chemical Business, as well as carbon footprint reduction initiatives.” said Sailesh C. Mehta, Chairman & Managing Director, DFPCL.

“I am happy that we have entered into this agreement with Deepak, and it is an example of how we use our position in the Atlantic basin to strengthen our relationship with key players in the growing Indian market. Ammonia is a key building block for the society, being crucial for agriculture and food security. Deepak’s new ammonia plant will provide new, domestic fertiliser supply to India and we are proud to provide its feedstock in the form of natural gas. We look forward to further developing our relationship with Deepak on feedstocks and low carbon initiatives in the future”, says Equinor’s Senior vice president for Gas & Power Helge Haugane.

This agreement is for annual supplies of

A landmark and first of its kind long term association between two Indian chemical majors to augment each other’s business needs

Aarti Industries Ltd (AIL) and Deepak Fertilisers & Petrochemicals Corporation Ltd (DFPCL) have signed a binding term sheet for a 20-year period for offtake and supply of Nitric Acid. The parties plan to execute the formal agreement before the close of this calendar year. The supply arrangement comes into effect from April 1, 2023.

DFPCL is the largest manufacturer of Nitric Acid in South East Asia and AIL is one of the largest Nitric Acid consumers in India. This arrangement is a landmark and first of its kind long term association between two Indian chemical majors to augment each other’s business needs and mutual interests. The deal provides specific volume commitments with supply or pay, take or pay obligations by either party thereby providing adequate assurance, financial security and protecting either party’s commercial interests.

The deal benefits AIL by way of a long-term supply security for a key raw material. This would meet a majority of AIL’s requirements. It also helps AIL have a greater assurance in sourcing the key RM from DPFCL, who is an existing and the largest integrated nitric acid producer in India with multiple production sites. AIL, being a manufacturer for specialty chemical and downstream products, the present deal provides a strong supply security and enables AIL to focus on future growth opportunities, introduction of new value-added products and value chains for niche applications.

DFPCL, along with its subsidiaries, is the largest player in India for Nitric Acid and has a capacity of about 8.9 Lakhs MT for WNA and 2.3 Lakhs MT per annum for CNA. DFPCL is a market leader in the Crop Nutrition, Mining Chemicals & Industrial Chemicals sectors.

A landmark and first of its kind

Initiative to help farmers adopt best practices in soil nutrition, climate-resilient farming

The Asian Development Bank (ADB) has announced that it would fund the farm efficiency initiative of Smartchem Technologies Limited (STL), a wholly-owned subsidiary of Deepak Fertilisers And Petrochemicals Corporation Limited (DFPCL), through a $30 million loan facility with a tenor of 5 years. This is ADB’s first agribusiness ‘Blue Loan’, and the first such blue loan in India in the agribusiness sector across institutions. The loan will be used to finance capital expenditure as well as research and development of enhanced-efficiency speciality fertilisers.

STL was chosen as a suitable candidate for Asian Development Bank (ADB) support because of its leading market position in the enhanced efficiency specialised fertilisers (EESF) segment, with advanced technical capability and satisfactory financial performance. Growth potential from the enhancement of fertiliser production capacity to provide quality inputs.

Actions to encourage the application of EESFs, which will support the sustainable transformation of agriculture in India while improving its resilience to climate change.

ADB has also given approval for a technical assistance grant of $5,00,000 for building capacity for Soil Nutrition Management among Smallholder Farmers and Climate Resilience in India. The said grant is in addition to financing of $30 Million (“Blue loan”).

Enhanced-efficiency speciality fertilisers have shown increased output while reducing the need for fertiliser application rate and also reduces environmental impact and supports Nutrient uptake efficiencies and thus delivers better productivity leading to improved food security.

Initiative to help farmers adopt best practices