Im­port­ing LNG

Southasia - - Briefing -

In­dia’s largest nat­u­ral gas im­porter, Petronet, has signed a sup­ply agree­ment with the United State’s United LNG to re­ceive liq­ue­fied nat­u­ral gas for the next twenty years. Ac­cord­ing to the agree­ment, the U.S. com­pany will sup­ply a min­i­mum of 4 mil­lion tons of LNG per year to In­dia over a pe­riod of two decades through the Main Pass En­ergy Hub in the Gulf of Mex­ico. This is Petronet’s first U.S. LNG sup­ply off-take agree­ment, which is ex­pected to ful­fill In­dia’s grow­ing LNG needs.

Prior to sign­ing the agree­ment with United LNG, Qatar’s RasGas was In­dia’s sole long-term nat­u­ral gas sup­plier. How­ever, In­dia had opted for an­other sup­plier as its LNG needs ac­cen­tu­ated over the years. Of late, the U.S. has emerged as a re­li­able and a cost ef­fi­cient LNG sup­plier and has be­come the world’s tar­get for se­cure LNG. In­dia’s en­ergy de­mand is in­creas­ing at a rate of 5 to 6 per­cent an­nu­ally and has be­come the world’s sixth largest LNG im­porter.

Al­though the U.S. State Depart­ment of En­ergy ap­proved the Main Pass fa­cil­ity as a trade route to ex­port gas to any coun­try that has or will en­ter into a free trade agree­ment with the U.S., ap­proval for ex­ports to non-free trade coun­tries is still pend­ing. Of­fi­cials at Petronet be­lieve that this is a pre­lim­i­nary agree­ment and stressed that the two par­ties will sign the bind­ing agree­ment once United LNG re­ceives the ap­proval from the U.S. En­ergy Depart­ment. In ad­di­tion, if the agree­ment is signed by the end of this year, United LNG will be­gin sup­ply­ing LNG by 2018.

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