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India awaits LNG exports from Freeport facility

May 20, 2013 at 3:30 PM   |   Comments

NEW DELHI, May 20 (UPI) -- The U.S. Department of Energy's conditional approval a Texas liquefied natural gas terminal to export to nations that do not have a free trade agreement with the United States is seen as a potential boost for India's energy security.

The Freeport LNG on Quintana Island in Texas is conditionally authorized to export as much as 1.4 billion cubic feet of natural gas a day for 20 years, DOE said Friday.

The approval is seen as a significant indication of how the U.S. government could decide on up to 20 other applications to export LNG.

While India is not likely to benefit immediately from the approval -- as China, Japan and Britain already have a stake in the Freeport facility -- it opens the door for Indian companies to seek similar licenses to import huge quantities of the much-needed gas from the United States as new terminals are approved, Press Trust of India reports.

Indian Ambassador to the United States Nirupama Rao, speaking at the American Enterprise Institute in Washington earlier this month, pushed for the export of U.S. natural gas to India, saying it presented a "win-win" co-operation opportunity for both nations. India does not have a free trade agreement with the United States.

"My country needs to secure more clean energy supplies to foster the sustainable, ecologically balanced, socio-economic development of millions of our people who still live in poverty," Rao said.

India is currently the fourth largest energy consumer in the world after the United States, China and Russia.

Rao said the demand-supply gap of natural gas in India, now estimated about 2.2 trillion cubic feet a year, would likely rise to almost 4 trillion cubic feet by 2016-17. By 2030, India's demand for natural gas is expected to reach 8 trillion cubic feet a year.

Because of its linkage to Henry Hub prices, natural gas from the United States would mean "considerable savings" to India, estimated at $4 to $5 per million metric British thermal units, the ambassador said.

"The point that I would like to stress is that the advantage is mutual and that natural gas exports represent a 'win-win' co-operation opportunity," Rao said.

In May 2011, the DOE granted the first authorization to export LNG to non-FTA countries from the Sabine Pass LNG Terminal in Cameron Parish in Louisiana at a rate of as much as 2.2 billion cubic feet of natural gas a day.

In December of that year, state-run Gas Authority of India Limited announced it had agreed to buy 3.5 million tons a year of LNG for 20 years from the Sabine facility.

Topics: Nirupama Rao
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