News and Articles

• Indian Oil is adding Algeria as a long-term LPG supply source.
• Monthly cargoes are expected to contain 45,000 to 55,000 metric tons.
• India is reducing dependence on Middle Eastern LPG supply routes.
• US LPG purchases have also increased as sourcing becomes more diversified.
• Broader origin coverage can reduce exposure to shipping disruptions.

India is broadening its liquefied petroleum gas supply network as Indian Oil adds Algeria to its term purchasing portfolio. The agreement with Sonatrach provides for one very large gas carrier each month, with cargoes containing a mixture of propane and butane. Each shipment is expected to carry between 45,000 and 55,000 metric tons of LPG.

The arrangement marks a shift in sourcing strategy after disruptions to Middle Eastern energy flows exposed India's dependence on a limited number of LPG origins. India has traditionally sourced a large portion of imported cooking gas from the Middle East, leaving buyers exposed when shipping through the Strait of Hormuz becomes restricted.

For LPG procurement teams, adding Algeria provides another regular supply channel and reduces concentration in one producing region. Term contracts can also give buyers better visibility over monthly cargo availability compared with relying heavily on short-term purchases during periods of market disruption.

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India has already increased purchases from the United States to compensate for reduced Middle Eastern availability. Algerian supply adds another option, allowing importers to balance cargoes across the Atlantic Basin, North Africa and traditional Gulf suppliers.

Shipping terms will remain important. The Algerian arrangement is based on free-on-board purchases, which means the buyer manages transportation after cargo loading. Procurement teams therefore need to consider vessel availability, freight costs, insurance and terminal scheduling when calculating the delivered cost.

The diversification also matters for industrial LPG users. Supply disruptions can affect household allocation policies first, leaving commercial and industrial consumers exposed to tighter availability. A wider import network can reduce the chance that problems in one trade route lead to severe domestic allocation constraints.

India remains highly dependent on imported LPG, so diversification does not remove exposure to international shipping or supplier operations. It does, however, create more sourcing options when one region faces disruption.

For large LPG buyers, supplier geography, contract structure and logistics capability are becoming as important as headline import volumes. A broader supply base can improve continuity and provide more flexibility when international energy flows are disrupted.