US to Soon Sign Long Term LNG Deals with India
The US will soon sign long term contracts with India to supply LNG, president Donald Trump said from the White House June 26.
“We’re also looking forward to exporting more American energy to India as your economy grows, including major long-term contracts to purchase American natural gas, which are right now being negotiated, and we will sign them. Trying to get the price up a little bit,” Trump said as he hosted the Indian prime minister Narendra Modi.
India’s LNG imports have been clocking sharp growth as demand for clean energy expands in the south Asian nation. For the 12-month period ended March 31, 2017, India’s LNG imports were up by 15.5% on year at 24.6bn m³. LNG imports during 2016-17 were the highest during the past four years.
Currently Qatar is the largest supplier of LNG to India but New Delhi is looking to diversify is supply lines. US too is looking to emerging economies in Asia to sell its LNG. Recently, Washington allowed LNG to be exported to China.
Gail India already has a long-term contract to import LNG from the US. It has an agreement to buy 3.5mn mt/yr of LNG from Sabine Pass on a FOB basis for 20 years. It also has a second 20-year deal with Dominion Resources for 2.3mn mt/yr of LNG. Out of the total 5.8mn mt/yr LNG that is contracted, Gail has already sold about 0.5mn mt, so from next year the company will get a little over 5mn mt/yr of LNG. The supplies are expected to begin in 1Q of next fiscal year (which is 2Q of calendar 2018).
Shardul Sharma