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GAIL aims to buy stake in US LNG plant or line up

long-term

supply deals

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Plans stalled in 2023 with US freeze on new export permits

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GAIL sees LNG prices softening after 2026 on strong supply

growth

By Nidhi Verma and Sethuraman N R

NEW DELHI, Feb 10 (Reuters) - GAIL India Ltd

will seek to buy a stake in a U.S. liquefied natural gas plant

or secure long-term U.S. LNG supply after the Trump

administration lifted a ban on export permits for new projects,

chairman Sandeep Kumar Gupta said.

"Their (Washington's) decision to lift the ban will improve

LNG supply and we will revive our plans to either buy a stake or

buy U.S. LNG under long-term deals," Gupta told Reuters ahead of

the India Energy Week.

He said the company would make a decision after holding a

tendering process for long-term LNG purchases.

India is the world's fourth largest LNG importer and aims to

raise the share of gas in the country's energy mix to 15% by

2030 from 6.2% currently. GAIL is India's top gas distributor.

GAIL had to stall its 2023 process to buy a stake of up to

26% in an LNG plant in the United States after then-President

Joe Biden paused approvals for pending and future applications

to export LNG from new projects.

Gupta said global LNG prices could soften after 2026 as new

projects are expected to come on stream in the U.S. and

elsewhere, adding to supply.

Asia spot LNG prices hit a two-month high last week

at close to $15 per million British thermal units, tracking a

rally in European gas prices. Ample supply will be coming from

the U.S. and Qatar later this decade to cap prices, analysts

say.

The U.S. is expected to nearly double its LNG export

capacity by the end of the decade, while Qatar plans to expand

its liquefaction capacity to 142 million metric tons per year by

2027 from 77 million.

Gas consumption in India is expected to rise to over 500

million standard cubic metres a day (mmscmd) by 2030, Indian oil

minister Hardeep Singh Puri said last year.

India's gas consumption rose by about 12.5% to about 185

mmscmd in fiscal year 2024 from the previous year, according to

the oil ministry's Petroleum Planning and Analysis Cell.

Gupta said India's consumption will increase sharply if the

government brings gas into the goods and services tax regime,

instead of the multiple taxes on gas at present, to make prices

cheaper and uniform across the country.

GAIL has contracted to buy 15.5 million tpy of LNG including

supplies from the U.S., Qatar, Australia, and traders Vitol and

Adnoc, according to its annual report for 2023-24.

Its long-term deals with companies in the U.S. include the

purchase of 5.8 million tpy LNG, split between Berkshire

Hathaway Energy's Cove Point plant and Cheniere Energy's

Sabine Pass site in Louisiana.

It also awarded a five-year tender to Qatar for the purchase

of one LNG cargo a month from April, sources said in December.