First US liquified natural gas cargo leaves for India

Cheniere Energy Inc. has dispatched its first shipment of US liquefied natural gas (LNG) to India through its Sabine Pass LNG terminal in Louisiana.

Houston-based Cheniere signed a 20-year deal with GAIL India Ltd., to supply the subcontinent’s largest natural gas transmission and marketing company 3.5 million metric tons of LNG annually in a deal that would generate more than a billion dollars for the US company, which began exporting in 2016.

In a statement, US Energy Association (USEA) Executive Director Barry Worthington said, "Today’s shipment is significant because it means security for the world’s third largest energy consumer. Other countries are trying to secure their own resources in the face of rising energy demand marked by a projected 30 percent increase in global energy consumption by 2040."

The deal between Cheniere and GAIL aligns with the Strategic Energy Partnership announced by US President Donald Trump during Indian Prime Minister Narendra Modi’s visit to Washington last summer; the two leaders agreed to leverage new opportunities and elevate cooperation.

The U.S. is the world’s largest natural gas producer, a leading supplier of LNG, and is expected to become the largest producer of crude oil this year.

“Concurrently, India is trying to increase its use of natural gas. The fuel comprises about 6 percent of India’s energy mix, while its government is taking steps to move the needle closer to 15 percent within five years. As India tries to secure energy supplies and reduce emissions by using more natural gas, the US is a logical energy partner," he said.

According to Worthington, president Trump is driving an American energy production agenda that removes barriers to all energy production, development, delivery, technological innovation and exports. Creating that energy security in the U.S. will allow us to help our allies--like India--secure their own future and economic growth.

"One-third of the growth of world energy consumption is driven by India, so we anticipate more opportunities for cooperation between US industry and India on clean coal, renewable resources, energy storage, fossil fuel, and smart grid technologies," said Worthington.

USEA has worked with the US Agency for International Development in India for more than 25 years promoting energy security through increased trade, investment and access to clean sources of power and fuel.

“We look forward to continuing that partnership and being a resource for further development in the country.”

On Friday, Cove Point became the second port to export LNG after a tanker owned by a subsidiary of Royal Dutch Shell plc left from Dominion Energy’s export facility on Chesapeake Bay in Maryland.

Cove Point is the second U.S. facility to export LNG sourced from domestically produced natural gas in the Lower 48. Cheniere Energy Inc.'s Sabine Pass LNG terminal in Cameron Parish, LA, began exporting LNG in February 2016. 

India currently imports LNG from Qatar and Australia under long-term contracts at Petronet LNG's Dahej terminal in Gujarat. Shell, too, imports LNG at its Hazira terminal from across various geographies.