India asks US to export liquefied natural gas

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Arun Kumar | 08 May, 2013
India's ambassador Nirupama Rao has asked the US to start exporting liquefied natural gas (LNG) to India and other energy scarce countries, calling it a 'win-win' opportunity.

"As shale gas has become economically viable to produce, the US has emerged as one of the world's most important gas producing countries," she noted in a keynote address at the American Enterprise Institute (AEI) on "America's Natural Gas: Should Exports be Restricted?"

"Growth in shale gas production in the coming years is now expected to substantially reduce, if not eliminate, the need for the US to import natural gas," Rao said.

She noted that according to US Department of Energy estimates, the total production of natural gas in the US would exceed domestic consumption by 2020.

"This scenario opens up the possibility of the export of liquefied natural gas (LNG) cargoes from the US to other energy scarce countries, including India" where there is significant untapped potential for natural gas demand in all end use segments, she said.

"The advantage is mutual and that natural gas exports represent a 'win-win' co-operation opportunity," Rao said.

She said that India had already invested significantly in the liquefaction terminals that were likely to come up in the US.

"Our companies are scouting for more tie-ups and ownership stakes in the 19 odd terminals which have applied for export of natural gas to non-Free Trade Agreement (FTA) countries," she said.

Besides, other Indian companies, including Reliance Industries Ltd in the private sector, have bought stakes in oil and gas exploration and production companies, a trend which will receive a huge boost if export of natural gas is permitted to India, Rao said.

According to a US Energy Information Administration (EIA) study cited by her, roughly 20 percent of the $133.7 billion invested in US tight oil and shale gas from 2008 to 2012 has come from abroad, with Indian companies accounting for a total investment of nearly $4 billion.

"These investments represent more growth, jobs and progress for the US economy and should, in my view, be welcomed," Rao said.

US natural gas exports will also "bring significant geo-political and strategic advantages to both the US and its partners and allies across the world", she said.