India has decided to make a “strategic shift” in LNG (liquefied natural gas) sourcing with a “look U.S. policy” for contracting new import volumes. This follows an analysis by the Petroleum Ministry which showed that LNG imports from the Gulf were costlier than from the U.S.
The decision was taken recently at a meeting of the Empowered Group on import of natural gas, LNG and polymers.
The development comes close on the heels of state-run GAIL India entering 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. “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.
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According to the minutes of the meeting held in December 2011 accessed by
It was also decided to explore the possibility of securing more volumes from U.S. market. However, considering the total demand and diversification of supply portfolio, the Committee advises to negotiate and conclude the long-term deals under discussion with RasGas of Oman and Gazprom of Russia whose price offers are indexed to oil.” The Committee was informed by GAIL that price comparison was done among the existing contracts with RasGas and Gorgon (Australia) as well as proposed deals with RasGas, Gazprom, Macquarie Energy (from Freeport project) and Sabine Pass Liquefaction LLC.
It was found that gas from the U.S. company came cheaperThe committee approved that commercial agreement for the purchase of long term LNG of 2 mmtpa (million metric tonnes per annum) from Macquarie Energy be concluded for a 20-year period.
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