GAIL Ltd plans to buy stake in US LNG as Trump Administration lifts ban on export permits
The decision to relax the restriction will increase the availability of LNG, and we will resurrect our plans to purchase US LNG under long-term agreements or to purchase a stake.
GAIL Ltd plans to buy stake in US LNG as Trump Administration lifts ban on export permits
After the Trump administration relaxed a prohibition on export permits for new projects, state-owned GAIL India Ltd. plans to either secure a long-term US LNG supply or purchase a stake in a US liquefied natural gas facility, according to chairman Sandeep Kumar Gupta.
The decision to relax the restriction will increase the availability of LNG, and we will resurrect our plans to purchase US LNG under long-term agreements or to purchase a stake. According to him, the business will choose whether to run a tendering procedure for long-term LNG acquisitions.
After then-President Joe Biden halted permits for ongoing and future applications to export LNG from new projects, GAIL was forced to postpone its 2023 plan to purchase a stake of up to 26% in an LNG facility in the United States.
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Gupta said global LNG prices could soften after 2026 as new projects are expected to come onstream in the US and elsewhere, adding to supply. Gupta said India's consumption will increase sharply if the government brings gas into the goods and services tax regime, instead of the multiple taxes on gas at present, to make prices cheaper and uniform across the country.
GAIL has contracted to purchase 15.5 million tons per year (tpy) of LNG, which includes supplies from the United States, Qatar, Australia, and traders Vitol and Adnoc, according to its annual report for 2023-24.
GAIL's long-term agreements with companies in the U.S. involve the purchase of 5.8 million tpy of LNG, divided between Berkshire Hathaway Energy's Cove Point plant and Cheniere Energy's Sabine Pass facility in Louisiana.
Additionally, it has awarded a five-year tender to Qatar to purchase one LNG cargo per month starting in April, as reported by sources in December.
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