NEW DELHI: Amid ongoing tariff talks, India is stepping on the gas — literally — to reduce its trade surplus with the US in the hope of an early deal. State-run gas utility GAIL has invited expressions of interest for acquiring upto 26% stake in a US LNG (liquefied natural gas) project and a 15-year gas sourcing contract.
The move comes within two months of talks between prime minister Narendra Modi and US president Donald trump in Washington, where both agreed to expand energy ties. India offered to increase its purchase of US oil and gas from $15 billion in 2024 to $25 billion in the coming years, contributing towards reducing the $45.7 billion trade surplus.
India meets 85% of its oil requirement and 50% of gas needs through imports. The US is India’s fifth largest oil supplier of oil and second largest source of gas. Increased US energy imports fits well with the strategic interests of both sides, particularly New Delhi’s bid to diversify its energy souring, and boost efforts to double the bilateral trade to $500 billion over the next five years.
Aligned with this roadmap, GAIL is looking to take equity in new or operational projects with capacities ranging between 5-10 million tonnes per annum or more and a long-term contract for sourcing one million tonne of LNG annually. The Trump administration cleared the way for such deals by lifting a ban on export permits of new LNG projects imposed by predecessor Joe Biden.
GAIL is no stranger to the American shale industry as it had acquired stakes in US projects during the peak of shale boom. It was also the first Indian company to have signed pioneering long-term gas supply contracts in 2013 when nobody thought of the US as an option.
The latest acquisition move comes amid the company’s bid to sell its entire 20% stake in the Eagle Ford shale project in Texas, because of no profit due to low gas prices.GAIL had acquired the stake in 2011 from Carrizo Oil & Gas Inc.