India Poised to be an Important U.S. LNG Export Market

Tuesday April 9, 2013

With its growing energy needs, India is poised to become an important market for U.S. liquefied natural gas (LNG) exports, Nirupama Rao, India's ambassador to the U.S., writes in a Wall Street Journal op-ed.

Rao writes that India's economy has grown quickly and now represents the world's fifth-largest energy consumer, and it expects to increase the portion of its energy that it imports from 75 percent to 90 percent over the next decade.

Meanwhile, natural gas production is rising in the U.S., thanks to the extraction of the fuel from shale.

India has sought a free trade agreement with the U.S. to facilitate gas imports from the country, Indian newspaper the Hindu Business Line reported in November.

Rao noted that all U.S. LNG export terminals can ship the fuel to free trade agreement (FTA) countries, but only one - at Sabine Pass in Louisiana - has authorisation to export to non-FTA nations.

Indian purchases of U.S. LNG would help both nations' economies, she says, and also have environmental benefits by encouraging the use of a cleaner-burning fuel.

"The prospect of increased Indian investment in the U.S. natural-gas market will usher in a new era for a strong and mutually rewarding India-U.S. energy partnership," she writes.

Exports of LNG to non-FTA nations has created some conflict within the U.S. energy industry, as some companies seek export opportunities while others hope to keep the fuel in the country for use as a low-price feedstock.