Gail India, one of India's top liquefied natural gas buyers, expects US President Donald Trump’s goal of increasing energy production to make fuel imports more viable in the price-sensitive nation.
Cost remains the biggest constraint to boosting LNG shipments into India, Chairman Sandeep Kumar Gupta said in an interview. Indian imports of the fuel peaked in 2020, and have struggled to rebound as prices surged following Russia’s invasion of Ukraine in 2022.
“Since 2022, the prices are unviable,” Gupta said. “The new US administration and leadership is very bullish on oil and gas. We believe that more gas will be available globally at softer prices, especially to the price-sensitive areas of the consumption in the country.”
High natural gas costs have dragged on Prime Minister Narendra Modi’s desire to more than double the share of the fuel in the energy mix to 15% by 2030. The head of the world’s most populous nation faces a minefield in negotiations with President Donald Trump when they meet in Washington this week, and increased imports of US LNG might help narrow the trade gap, though they would increase India’s energy dependence.
Demand for the super-cooled fuel from the world’s fourth-largest buyer will roughly double by 2030, the International Energy Agency said in a report this week. Gas has not kept up with otherwise rapid energy demand growth because India has prioritized affordability and security, but lower prices and infrastructure should boost the role of the fuel.
LNG prices need to be about $8 to $10 per million British thermal units for the fuel to be viable for Indian gas-fired power plants, Gupta said. That compares with North Asia spot LNG rates that are currently around $16 per million Btu.
Gail India will also revive its effort to explore purchasing a stake in a US LNG plant, Gupta said, after the Trump administration lifted a pause on approvals of new export facilities.
The company also recently closed a five-year LNG purchase agreement for about one shipment a month, and will shortly be repeating that, Gupta said. Additional long-term contracts beyond that will depend on domestic demand, he said.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
