Trump Promotes a U.S. Gas Trade With India That Already Exists
(Bloomberg) -- In promoting trade with India, President Donald Trump suggested Monday that the U.S. is on the verge of signing long-term agreements to send natural gas to the Asian country.
There’s just one thing: India already has long-term agreements for U.S. gas. And it’s received at least seven cargoes of it since the U.S. started liquefying its shale gas and sending it overseas last year, according to ship-tracking data compiled by Bloomberg.
After a meeting with Indian Prime Minister Narendra Modi, Trump said the U.S. will sign long-term contracts to supply India with American gas, adding that it’s “trying to get the price up a little bit” first. Meanwhile, Indian companies have already secured agreements for supplies from Cheniere Energy Inc.’s Sabine Pass liquefied natural gas terminal in Louisiana; Dominion Energy Inc.’s planned Cove Point LNG plant in Maryland; and Sempra Energy’s Cameron LNG project in Louisiana, company filings show.
At this point, such long-term gas contracts between the U.S. and India are “not new,” said Anastacia Dialynas, an energy analyst at Bloomberg New Energy Finance. "We’ve already had 24 billion cubic feet since we started exporting last year and that will likely increase. The biggest impact this could have is if it signals a new contract being signed."
The White House didn’t immediately respond to a request for comment on already-existing gas contracts with India.
Since the first tanker full of LNG set sail from Cheniere’s Sabine Pass in Louisiana last February, America’s shale gas has landed in more than 20 countries including India, South Korea, Mexico, and Japan. The trade has set the U.S. on a path toward becoming a net gas exporter for the first time in decades, potentially surpassing Australia and Qatar to become the world’s largest LNG supplier by 2035.
Gail India Ltd., India’s state gas utility, signed a 20-year agreement with Cheniere for supplies from Sabine Pass. The contract is slated to begin once the fourth LNG-producing plant at Sabine Pass comes online in the second half of this year.
Gail has also signed a 20-year service agreement with Dominion’s Cove Point project in Maryland, set to come online in late 2017, and Indian Oil Corp. struck a 20-year deal for LNG from Cameron LNG, a project being developed in Louisiana by a group of companies including Sempra, Engie SA and Mitsubishi Corp.
“India is one of the few large LNG importing countries that we estimate still has a decent amount of un-contracted demand in the coming years,” Dialynas said, while adding that LNG buyers including Gail and other Indian companies are now “being very careful” about locking in long-term volumes and prices.