India's Petronet LNG is set to sign a deal with US liquefied natural gas (LNG) developer Tellurian Inc worth more than $2 billion in the proposed Driftwood project in Louisiana.
- This deal is a part of wider cooperation between India and the US, with Indian Prime Minister Narendra Modi expected to meet US President Donald Trump in Houston to discuss ways to deepen their energy and trade relationship.
- The deal is an effort on India’s part to showcase India as a major energy consumer and investor, a provider of jobs for Americans, and a destination for future U.S. exploration and regasification projects.
- In India, the oil and gas imports from the U.S is on the rise. India has imported more than three times as much oil and twice as much gas from the U.S. in 2019 as compared to 2018.
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- With the U.S repeatedly expressing its concerns over the trade deficit between the two countries, India hopes that the inflows of Indian oil payments will soften U.S concerns and pave the path for a potential breakthrough in the trade impasse between both countries.
- The current synergy between India and US stems from the fact that India has reduced its oil imports from Iran and Venezuela following the S. sanctions, and China has cut American LNG imports due to ongoing trade war between the two countries.
- Previously too in 2011, GAIL, which is one of the major owners of Petronet, had entered into a 20-year contract to buy 5.8 million tonnes per year of LNG from the U.S.
- However, despite the contract Indian demand for LNG imports couldn’t keep pace with supply due to the long shipping time taken, the slowdown in key manufacturing sectors, as well as Indian industry’s over-reliance on coal.
- But due to recent turn in events and change in global politics both countries are hoping to sign further deals and explore future avenues for cooperation.