GAIL India Acquiring 26% Stake in US LNG Project

GAIL India Ltd has issued a tender inviting  initial bids from companies interested in acquiring up to a 26% stake in a liquefied natural gas (LNG) project in the United States, along with a 15-year gas import agreement. This move is part of New Delhi's strategy to reduce its trade surplus with Washington.

As India aims to be among the first nations to finalize a trade agreement with the U.S., the ongoing trade tensions with China, exacerbated by President Donald Trump's imposition of significant tariffs, have prompted various countries to seek negotiations. Trump has indicated that U.S. gas exports could play a crucial role in these discussions.

GAIL, India's largest gas distributor, is looking for equity in either an existing LNG liquefaction project or a new one that is expected to be operational by 2030 at the latest. The tender document, available on GAIL's website, outlines the company's desire to secure 1 million metric tonnes of LNG annually from a U.S. facility on a free-on-board basis for a duration of 15 years, with the possibility of extending the agreement by an additional five to ten years. GAIL aims to begin receiving LNG from the U.S. project by 2029-2030, with a deadline for bid submissions set for April 28.

To enhance its imports of U.S. energy, India is also contemplating the removal of its import tax on U.S. LNG to improve its price competitiveness and help reduce its $45.7 billion trade surplus with the United States. GAIL had previously paused a similar initiative in 2023 due to a ban on export permits for new and pending LNG projects imposed by then-President Joe Biden. However, with the lifting of this ban by the Trump administration, GAIL has revived its tender.

As the world's fourth-largest LNG importer, India aims to increase the proportion of gas in its energy mix from the current 6.2% to 15% by 2030. GAIL has already secured contracts for 15.5 million tonnes of LNG annually, including supplies from Australia, Qatar, and the United States, as well as from traders like Vitol and Adnoc. Its long-term agreements with U.S. companies include the purchase of 5.8 million tonnes per year of LNG from Berkshire Hathaway Energy's Cove Point facility and Cheniere Energy's Sabine Pass site in Louisiana.