GAIL sees scope for more US LNG share

State-run energy corporation GAIL (India) Ltd is looking to expand its imports of liquefied natural gas (LNG) from the US as trade talks between the two countries continue.

GAIL chairman and managing director Sandeep Kumar Gupta said on Tuesday that securing LNG from the US is a cost-effective option at current prices.

According to him, India already has a strong gas import portfolio that includes 5.8 million tonnes per year from the US, and stakeholders can further increase their purchases from the American market.

Gupta added that if Henry Hub prices remain between $3.4 and $4 per MMBtu, it would be logical for India to import more LNG from the US. He also pointed out that contracts based on a freight-on-board basis provides flexibility to swap cargoes when needed.

Director (business development) Rajeev Kumar Singhal noted that five proposals from US-based firms are currently under review in response to GAIL’s tender to acquire up to a 26% stake in a US LNG project, The Economic Times reported. Each proposal includes a long-term supply agreement for one million tonnes of gas annually.

However, individuals familiar with the matter told the business daily that two of the proposals are from Louisiana-based developers, of which one received recent US government approval to export gas to non-free trade agreement (FTA) countries.

This tender brings back a plan started in FY23, which was paused after thhe US had stopped approving new LNG export permits.

The new proposals plan to ensure long-term gas supply and help lower India’s trade surplus with the US, which was discussed during talks between Prime Minister Narendra Modi and former President Donald Trump in Washington.

Gupta also noted that GAIL has completed construction of the breakwater facility at the Dabhol LNG terminal in Maharashtra’s Ratnagiri district, which was initially planned during the Enron era. He said the company expects to receive regulatory clearances soon, which would allow LNG operations to continue during the monsoon season.