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LNG Imports From United States Of America – Implications For India

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LNG Imports From United States Of America – Implications For India

Date Jan–March 2018
Author Sunil Gupta
Publication Name The Federation of Indian Petroleum Industry (FIPI)

Abstract

With the increase in shale gas production, the United States is poised to become a major exporter of Liquefied Natural Gas (LNG). LNG liquefaction projects with an estimated capacity of approximately 140 MMTPA have been approved and are at various stages of development and construction.

Once these projects become operational, the United States is expected to emerge as one of the top three LNG exporters globally, alongside Australia and Qatar. Countries such as India have been exploring the import of LNG from the United States as a secure source of natural gas, benefiting from Henry Hub-linked pricing and supporting efforts to reduce emissions and diversify their energy mix.

Asian companies were among the largest buyers of U.S. LNG due to its pricing advantage when compared to crude oil-linked LNG contracts. However, following the decline in crude oil prices from 2015 onwards, U.S. LNG became less competitive in global markets.

This paper examines the growth of U.S. LNG exports, the applicable regulatory framework, lessons learned from the sharp decline in crude oil prices, and explores the way forward for sourcing LNG from the United States.

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