India’s liquefied natural gas buyers are seeking decades-long supply deals to protect them from price surges, a move that will support the government’s plan to boost the fuel’s use.

Importers are accelerating efforts to lock in fuel, according to traders and executives. Buyers including Petronet LNG Ltd., GAIL India Ltd. and Indian Oil Corp. are in talks with suppliers in the US, Qatar and the UAE for deals that last for 20 years. The trend is a reversal for the nation, which hasn’t signed a long-term deal since 2021, according to contract data from BloombergNEF.

That should help reduce their exposure to the volatile spot market — where prices surged to a record last year and made the fuel too costly for many buyers. It also increases the prospect of imports rebounding in a boost for Prime Minister Narendra Modi’s strategy to more than double the share of gas in the country’s energy mix by the end of the decade to help reduce pollution.

“The lesson learned by the consumers is that they can’t run the business based on spot,” Akshay Kumar Singh, chief executive officer of Petronet LNG, said earlier this month. “Going forward, we will be finding a lot of long-term contracts signed by different stakeholders.”

India’s consumers — from power plants to petrochemical facilities — are highly price-sensitive as gas competes head-to-head with cheaper and dirtier alternatives, but had become too dependent on the spot market, which was far more expensive than long-term contracts last year. The nation’s LNG imports plummeted by nearly 20% after Russia’s invasion of Ukraine upended the market.

While LNG rates have since dropped and India is again purchasing spot shipments, that may not last. Prices are slated to increase in the second half of 2023, impeding demand growth, according to Ayush Agarwal, LNG analyst at S&P Global Commodity Insights.

Petronet is in the middle of negotiations with Qatar to extend an existing deal at a lower price and secure additional volumes, according to executives at the firm, who asked not to be named as the talks are ongoing. The company is in talks with several other suppliers, they said.

GAIL is looking to purchase a stake in a US LNG export terminal, coupled with a 1 million ton per year deal. About nine suppliers have expressed interest, a senior company official said. GAIL is also in talks with several other suppliers outside of the US, another official said.

Spokespersons for Petronet, GAIL and IOC didn’t immediately reply to messages seeking comment on contract negotiations.

Even though there is little supply available before 2027 due to a lack of new projects, long-term contracts are still a way to avoid pitfalls in the spot market, Petronet’s Singh said earlier this month.

“Business can’t be managed with spot,” Singh said. This year’s import level “all depends on how the prices are hovering in international market. We are keeping fingers crossed.”