GAIL Eyes Long-Term Supply Deal With Alaska LNG: All You Need To Know About Trump-Backed Project

(MENAFN- Live Mint) India's state-run GAIL is in initial talks to secure a long-term liquefied natural gas (LNG) supply deal from the proposed Alaska LNG project.

The move aligns with India's goal to raise its energy imports from the United States to narrow its trade surplus, which falls under a broader trade agreement with Washington to avoid significant US tariffs.

Key considerations

GAIL's discussions are preliminary as the landed cost of LNG will be an important deciding factor for the deal, reported Reuters.

Glenfarne, the developer of Alaska LNG, revealed last month that 50 firms had formally shown interest in contracts with Alaska LNG so far.

The project, supported by US President Donald Trump, has been stuck on the drawing board for more than a decade.

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"Glenfarne does not comment on or confirm individual commercial negotiations, but Alaska LNG's growing commercial momentum reflects the project's competitive economic and geostrategic advantages," the company told Reuters.

India's expanding energy ambitions

India, the world's fourth-largest importer of LNG, aims to reduce its carbon footprint by increasing the share of gas in its energy mix to 15 per cent by 2030, up from about 6 per cent currently.

GAIL plans to increase the capacity of its 5 million metric tons per year Dabhol LNG terminal to 6.3 million tons per year by mid-2027 and to 12.5 million tons per year by 2031-32, the news agency reported.

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Earlier this year, GAIL also invited initial bids from companies to buy equity in an existing LNG project or a new project that would be commissioned by 2030 at the latest.

Alaska LNG project progress

The Alaska LNG project, valued at $44 billion, has the capacity to export up to 20 million metric tons of superchilled gas every year.

Alaska Governor Mike Dunleavy said in March that the project could start exporting LNG by 2030.

Glenfarne is expected to make a final investment call in the fourth quarter of this year. If approved, the first phase of the project, a 1,231-km pipeline, will deliver gas from the state's far north to its Anchorage region.

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Other interested players in the Alaska LNG project include Thailand's state-owned oil and gas giant PTT, which signed a 20-year agreement last month to buy 2 million tons per year of LNG.

South Korea and Japan's top power producer JERA are also awaiting clarity on the financing and cost of the project.

GAIL has contracts to buy 15.5 million tons annually of LNG, including 5.8 million tons from the United States, the news agency reported.

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