Agastya Green Fuels Secures 250,000 TPA Green Methanol Offtake Deal with Sri Lanka’s SAR Group

India’s Agastya Green Fuels has signed a long-term green methanol offtake agreement with Sri Lankan bunker supplier SAR Maritime Agencies, marking a significant development in the emerging green fuel market across the Indian Ocean region.

Under the agreement, SAR Maritime Agencies, part of the SAR Group, will procure 250,000 metric tonnes of EU RFNBO RED III-compliant green methanol annually from Agastya Green Fuels.

The deal is expected to support the development of a green maritime energy corridor linking India and Sri Lanka, while strengthening alternative fuel infrastructure for the shipping sector.

Green Methanol to Be Supplied from Andhra Pradesh Hub

The green methanol will be produced at Agastya Green Fuels’ planned facility at Mulapeta Port in Andhra Pradesh, where the company is developing a large-scale export-oriented green methanol hub.

According to Agastya, the project will involve an investment of approximately US$6 billion over the next six years and is expected to reach a production capacity of 1 million tonnes of green methanol per year.

The facility is being developed to serve growing international demand for low-carbon fuels, particularly from the maritime sector as shipping companies seek compliance with tightening emissions regulations.

Focus on Green Bunkering Infrastructure

As part of the partnership, Agastya Green Fuels and SAR Group will collaborate on the development of green methanol storage, bunkering and marine fuel infrastructure in Sri Lanka.

The initiative is expected to support the positioning of Colombo, Hambantota and Trincomalee as future alternative-fuel bunkering hubs serving international shipping routes across the Indian Ocean.

The agreement aligns with increasing industry interest in methanol as a marine fuel due to its potential to reduce lifecycle greenhouse gas emissions and support compliance with emerging global and regional decarbonisation requirements.

Supporting Maritime Decarbonisation

Green methanol is gaining traction as one of the leading alternative fuels for shipping, supported by a growing orderbook of methanol-capable vessels and investments in fuel production and bunkering infrastructure worldwide.

The agreement reflects broader efforts to establish supply chains capable of supporting the transition to lower-carbon marine fuels across key global trade corridors.

Commenting on the development, Shashi K Reddy Arjula, Founder and Group CEO of Agastya, said:

“The Indian Ocean is emerging as the world’s next green fuel corridor. Agastya Green Fuels intends to be at its center.”