The first shipment of LNG from the US under a 20-year deal will reach India on March 30, Union Petroleum Minister Dharmendra Pradhan said today.
State-owned gas utility GAIL India has contracted 3.5 million tonnes per annum of liquefied natural gas (LNG) from Cheniere Energy's Sabine Pass liquefaction facility in Louisiana.
"On March 30, the first long-term LNG consignment from the US will reach Dabhol, Maharashtra," Petroleum Minister Pradhan said here.
The deal will broaden the hydrocarbon engagement between India and the US, Pradhan told reporters after a meeting with the visiting Texas Governor Greg Abbott here.
Pradhan also said India is going to be a huge energy market very soon even as the per capita consumption in the country is very low.
The minister said India's bilateral relation with Texas has always been strong and oil and gas engagement is further augmenting it. Texas being the hydrocarbon hub of the US is a very special state, Pradhan said.
"There is much more we have to gain, through further investments, technological tie-ups and cooperation between universities," Pradhan said.
"Today, fertiliser is the primary consumer, power sector is second consumer, I can visualise a big new consumer base in the steel sector," he added.
Abbot, who also addressed the media, said India is the most prolific economy in the world and it will continue to grow.
"Indian economy is growing and such economies need access to energy to assist their growth. Texas is blessed with huge amount of energy, oil and natural gas," Abbot, who is leading a high-level delegation as part of his efforts to boost trade, economic and cultural ties between resource-rich Texas and India, said.
Abbot said Texas is honoured to engage in trade opportunity with India, including first shipment of US oil arrived India in last October.
"We're looking forward to more shipments to India. We're also honoured about the opportunity to ship natural gas, LNG to India, which will ironically reach India on my last day in India. We will also be adding further export facility for oil. Texas is adding more LNG export facilities to ensure to be able to meet the needs of India as well as other countries," he said.
Last October, India imported its first shipment of crude oil from the US. The US had stopped oil exports in 1975, but the ban was lifted by former US President Barack Obama in 2015.
On price fluctuations, Abbot said as India has entered into a long-term contract so there will be price stability and certainty about the access to the LNG.
Pradhan said he expected a price balance in the market.
"We expect a reasonable price. We are not for a very low price and for very unnatural price... It has to be affordable price...," he said.
On March 6, India began importing natural gas from the US, after crude oil, with the first shipment of LNG under a 20-year deal flagged off from Louisiana.
GAIL had signed a sale and purchase agreement (SPA) with the US LNG exporter Cheniere Energy in December 2011.
Under terms of the agreement, Cheniere will sell and make available for delivery to GAIL about 3.5 million tonnes a year of LNG.
Cheniere's LNG is based on natural gas sourced from the US market, which provides access to abundant and low-cost gas resources.
Cheniere Energy, Inc is the leading exporter of US LNG. It is currently operating and constructing its Sabine Pass LNG facility in Louisiana and is constructing a second liquefaction facility near Corpus Christi, Texas. When both projects are complete, it is expected to be a top-5 global supplier of LNG.
GAIL is India's biggest natural gas transportation and marketing company. It is expanding pipeline network by 4,000 km at an investment of over USD 3 billion to operate over 15,000 km by 2020. GAIL commands 75 per cent market share in gas transmission and has a gas trading share of over 50 per cent in India.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
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