GAIL Eyes U.S. LNG Investments As Washington Lifts Export Ban

(MENAFN- KNN India) New Delhi, Feb 11 (KNN) GAIL India Ltd, the country's leading gas distributor, plans to pursue investment opportunities in U.S. liquefied Natural gas facilities or secure long-term supply agreements following Washington's decision to lift its ban on export permits for new projects.

Chairman Sandeep Kumar Gupta indicated that the company will evaluate these options through a formal tendering process for long-term LNG purchases.

The strategic move comes after GAIL had to suspend its 2023 initiative to acquire up to 26 percent stake in a U.S. LNG plant, following then-President Joe Biden's temporary freeze on approvals for new LNG export projects.

This development holds particular significance for India, which currently ranks as the world's fourth-largest LNG importer and aims to substantially increase its natural gas utilisation from 6.2 percent to 15 percent of its energy mix by 2030.

Industry projections suggest a potential softening of global LNG prices post-2026, as new production capacity comes online in various regions, particularly the United States and Qatar.

While Asian spot LNG prices recently reached a two-month peak of approximately USD 15 per million British thermal units, analysts anticipate that expanded supply capabilities will help moderate prices.

The United States is expected to double its LNG export capacity by decade's end, while Qatar plans to expand its liquefaction capacity from 77 million to 142 million metric tons annually by 2027.

GAIL's existing portfolio includes significant long-term LNG contracts totaling 15.5 million tonnes per year, sourced from various global suppliers including the United States, Qatar, Australia, and trading entities such as Vitol and Adnoc.

The company's U.S. arrangements comprise 5.8 million tonnes per year split between Berkshire Hathaway Energy's Cove Point facility and Cheniere Energy's Sabine Pass terminal in Louisiana.

Additionally, GAIL recently secured a five-year agreement with Qatar for monthly LNG cargo deliveries beginning April.

India's gas consumption has shown robust growth, increasing by approximately 12.5 percent to 185 million standard cubic metres per day in fiscal year 2024.

Indian Oil Minister Hardeep Singh Puri projects consumption to exceed 500 million standard cubic metres daily by 2030.

Chairman Gupta suggests that bringing natural gas under the goods and services tax regime could significantly boost consumption by establishing more uniform and competitive pricing across the country.

(KNN Bureau)

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