Indian Govt Focuses on LNG Imports from US

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Under a strategic move, Govt of India has decided to go for LNG from US in the future. Strategic shift turns when India is desperately searching for another source of energy to meet the domestic requirements as Reliance failed to achieve D6 production & Bombay High shivering from the dark ages.

LNG market seems environmentally stable & secured, therefore ministry of Petroleum & Natural Gas followed a series of analysis to understand the difference between imported LNG from Gulf & US. It was found that LNG imports from the Gulf are quite costlier from the US. According to govt sources, Govt has initially taken decision to go with LNG imports from US market.

Entire development comes closer & got clear image when state-run GAIL India went into an agreement for supply of 3.5 million tonnes per annum liquefied natural gas with Sabine Pass Liquefaction, LLC, a subsidiary of Cheniere Energy Partners, L.P., U.S. It clearly observed from the price of LNG based on Henry Hub (HH) from U.S. market was cheaper by $2-3 mBtu (million British thermal unit) compared to that based on oil index (Brent/JCC) from other sources.

“The imports of LNG from U.S. are cheaper and stable. This is the reason, we are now looking towards West to meet our requirements for the future,” a senior Petroleum Ministry official remarked. (Courtesy: the Hindu)

Even there was news in the market that Govt also exploring the similar sorts of contractual agreements from RasGas of Oman & Gazprom of Russia. Later Committee asked for price index quotations from Russian & Oman counterparts too. But at the end, US Company has received the proposal because of Cheaper in Pricing. Of course deal was more on commercial terms in spite of technical or qualitative measures. American technology is the most trusted across the globe, could be one of the possible reason behind selecting US firm for LNG imports apart from pricings.


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