Torrent Power has signed a long-term Sale and Purchase Agreement with Japan’s JERA Co., Inc. for the supply of up to 0.27 MMTPA of LNG over ten years starting in 2027. This LNG will be used to operate its 2,730 MW combined-cycle gas power plants, supporting rising national power demand, managing peak loads, and balancing renewable generation. The agreement addresses the increasing LNG requirements of Torrent Gas Ltd, ensuring reliable supply for various consumers. It aligns with India’s clean energy goals and aims to raise natural gas’s share to 15% by 2030. With current LNG prices declining, Torrent Power and Torrent Gas are looking to explore more procurement options to enhance energy supply reliability.
Strategic Rationale Why This Deal Matters
The recent announcement that Torrent Power has entered a 10-year long-term LNG supply agreement with JERA Co., Inc., Japan’s largest power generation company and a global LNG leader, represents a milestone both for corporate strategy and India’s evolving energy landscape. Under this agreement, JERA will export up to 0.27 MMTPA of liquefied natural gas (LNG) to Torrent Power on a Delivered-Ex-Ship (DES) basis. Deliveries are set to begin in 2027 and will comprise approximately four LNG cargoes per year For Torrent Power, this SPA ensures long-term fuel security a critical factor amid India’s rapidly increasing electricity demand, rising.
Urbanisation, and shifting energy priorities. By securing a steady supply of LNG, the company strengthens its capacity to run its 2,730 MW combined-cycle gas-based power plants, ensuring reliable generation even during periods of high demand. Simultaneously, the agreement supports its city-gas distribution (CGD) business (via its arm Torrent Gas Ltd.), enabling supply of gas for households, commercial and industrial users, as well as CNG vehicles From JERA’s perspective, the deal marks the company’s first long-term LNG export contract outside Japan a strategic diversification of its global LNG portfolio. JERA produces roughly one-third of Japan’s.
Operational & Energy-Sector Implications in India
Electricity and is among the world’s largest LNG buyers and suppliers. Expanding into India allows JERA to leverage complementary seasonal demand patterns: during months when Japan’s domestic LNG demand is low, JERA can supply to India, thereby optimising the utilisation of its global LNG fleet and hedging better against volatile demand cycle Thus, the SPA is not just a commercial contract it represents a cross-regional energy collaboration aligning supply capabilities with demand cycles, reinforcing energy security for both companies and their markets.
For India, the agreement arrives at a time when the government and utilities are increasingly emphasising a gas-based energy transition. Natural gas, owing to its lower carbon emissions compared to coal, is seen as a bridging fuel toward cleaner energy. Through deals like this, utilities like Torrent Power can ensure stable fuel availability for large gas-based power plants and urban gas distribution networks In practical terms, when the LNG arrives and is regasified, it will enable sustained operation of combined-cycle gas plants helping meet base and peak electricity demand, especially during high-load periods like summer. Additionally, as India continues growing its urban CGD footprint, LNG supply.
Stability will directly benefit households, commercial consumers, industries, and CNG-based public/transport networks This deal also underscores a broader trend: as Indian power companies expand renewable capacity, gas-based plants provide vital flexibility compensating for (India) variable renewable supply and ensuring grid stability. Torrent Power, for instance, already carries a diversified generation portfolio combining gas, renewables, and coal. With LNG availability secured for a decade, its gas-based plants can play a key role in balancing renewable generation and meeting demand surges
Corporate Strategy Beyond Immediate Supply
Beyond meeting immediate demand, the SPA signals Torrent Power’s broader ambition to deepen its LNG procurement and distribution infrastructure. The company has indicated that, in addition to this deal, it will explore further medium- and long-term LNG procurement options to support its gas-based plants and CGD business. This multi-deal, multi-supplier strategy helps diversify supply risk, secure competitive pricing, and ensure scale to support growing demand For JERA, the agreement expands its footprint in Asia’s fastest-growing energy market. By locking long-term buyers outside Japan, JERA hedges against domestic demand fluctuations, strengthens.
Its global LNG trading business, and positions itself as a key LNG supplier to emerging economies a strategic shift in a world increasingly sensitive to energy security and emissions Torrent Power’s existing generation capacity is diversified: roughly 4.96 GW across gas-based, renewable, and coal-based power plants. The 2.73 GW gas-based plants are central to the LNG contract. Additionally, the company’s distribution arm supplies nearly 31 billion units of power and caters to over 4.21 million customers across several states and union territories With the added LNG supply, Torrent’s capacity to deliver uninterrupted electricity especially during peak demand receives a boost.
Strategic Timing & Market Context
In parallel, enhanced gas supply for CGD promises better access for residential, commercial, industrial, and transport users (CNG), supporting urban growth, industrial output, and cleaner mobility. The agreement comes at a time when global energy markets face volatility from shifting fossil-fuel prices to supply chain uncertainties. For India, rising electricity demand, urbanisation, and the push for cleaner energy add urgency to secure reliable fuel imports. By locking in a long-term, fixed LNG supply, Torrent Power insulates itself against global LNG price fluctuations, logistical uncertainties, and supply disruptions For JERA, the deal offers an opportunity to monetise.
its global LNG portfolio more effectively by supplying to high-growth, high-demand markets like India. This marks a strategic pivot from being primarily a domestic player to a global LNG trader and supplier expanding its revenue base and strengthening resilience against domestic demand dips This agreement supports India’s broader policy goals of increasing the share of natural gas in its energy mix, improving air quality, reducing emissions, and promoting cleaner fuels for power generation and transport. For end-users households, industries, CNG-vehicle owners it promises much more reliable gas supply and potentially competitive prices over time.
Potential Challenges & Considerations
For the energy sector, it demonstrates an evolving model of long-term, cross-national supply partnerships, underlining how global energy security can increasingly rely on diversified, stable supply chains rather than short-term spot trades At the corporate level, such agreements also provide visibility and stability to investors long-term SPAs reduce supply risk and revenue volatility, (Solar) thereby supporting sustainable growth. While the SPA secures supply, actual benefits depend on timely infrastructure readiness LNG import regasification terminals, pipelines for gas distribution, and efficient logistics. Any delays or bottlenecks could hamper timely supply to plants and CGD networks.
Further, global LNG prices, shipping costs, and geopolitical developments remain uncertain. Though long-term contracts offer some protection, extreme market turbulence or disruptions could still affect cost structures Lastly, demand projections must materialise: while India’s energy demand is rising, ensuring that Rajasthan-level gas-based plant utilisation and CGD uptake deliver the expected volume remains crucial under-utilisation could undermine cost-efficiency The 10-year LNG SPA between Torrent Power and JERA is more than a supply contract it’s a strategic milestone marking the maturation of India’s gas-based power and distribution ambitions.
A deepening of global energy trade ties, and a step forward in building a cleaner, more reliable energy future. For Torrent Power, it means stable fuel, better supply security, and readiness to meet growing demand. For JERA, it demonstrates global ambition, diversified supply footprint, and smarter use of its LNG portfolio. For India’s energy ecosystem from households to industries to transport it translates to the promise of cleaner energy, grid stability, and reliable supply As demand rises and energy transition advances, deals like this will likely form the backbone of India’s path toward a gas-based, low-carbon energy mix with long-term agreements, diversified suppliers, and a strategic blend of generation, distribution, and supply networks.
Q1 What is the deal between Torrent Power and JERA?
A: The agreement is a 10-year LNG Sale and Purchase Agreement (SPA) under which JERA will supply up to 0.27 million tonnes per annum (≈ 4 LNG cargoes per year) to Torrent Power, starting 2027.
Q2 When does the LNG supply begin under this deal?
A: Deliveries under the SPA are scheduled to commence in 2027.
Q3 What will Torrent Power use this LNG for?
A: The LNG will be used to run its 2,730 MW combined-cycle gas-based power plants, and to supply gas via its city-gas distribution arm to households, industries, CNG vehicles, and commercial customers.
Q4 Why is this agreement significant for JERA?
A: This is JERA’s first long-term LNG export deal outside Japan, marking a strategic diversification of its LNG sales footprint, and allowing it to leverage complementary seasonal demand patterns between Japan and India.
Q5 What is the volume of LNG committed annually in the agreement?
A: The commitment is up to 0.27 million metric tonnes per annum (MMTPA), equivalent to about four LNG cargoes a year.
