Cheap oil-linked LNG supply to India trumps US gas amid trade talks

Asurge in US natural gas benchmark prices Henry Hub (HH) and volatile freight rates are making Indian fuel importers review their plans to purchase US LNG on a long-term basis, a key demand of the (US President) Donald Trump administration, senior industry sources told Business Standard.

- S DINAKAR

This comes even as India accelerates talks with the US to conclude a much-delayed bilateral trade deal.

Senior officials from two state-run refiners said that the ardour for US LNG had cooled in the last few months compared to what was seen last year, after a volatile HH soared to multiyear highs in the last few months.

GAIL is yet to make progress in an April tender seeking to source 1 million tonnes/year of LNG for 15-25 years from a US liquefaction project.

Indian state oil companies and gas consumers concluded around six-term LNG deals priced off HH in the late 2024-early 2025 period, totalling around 10 million tonnes per year of LNG, according to UK market intelligence provider Energy Intelligence. But three recent deals were linked to crude oil, industry data shows.

Besides offering access to agricultural products, central to a US trade deal with any nation is purchase of energy.

Pledges to buy more US LNG have underpinned deals with the European Union (EU), Japan and South Korea, according to US government data.