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LNG imports: India to ask US for special status

The first option India will pursue is a special status outside the non-FTA category to source LNG.

Written by Amitav Ranjan | New Delhi | Published: January 2, 2015 1:42:52 am

Prime Minister Narendra Modi would seek a special status for India for uninterrupted natural gas supplies when US President Barack Obama comes calling this month.

A draft note on India-US Cooperation in Oil and Gas Sector emphasises that New Delhi must seek support from Washington for sourcing LNG from the US in the form of “a special status to India (outside the non-FTA category) that will benefit meeting the energy requirement in India”.

In case President Obama does not agree to that, Plan B is to seek “special exceptions” for facilitating LNG exports to India from all export projects that have free trade agreement (FTA) licenses.

Currently, American domestic laws allow exports only to countries with which Washington has signed an FTA. Non-FTA countries are given conditional project-specific authorisation by the US Department of Energy for export of liquefied natural gas.

So far, GAIL India has got project-specific waiver for two deals to buy 3.5 million tonnes per annum of LNG from Cheniere Energy and another 2.3 MTPA at Dominion Energy’s Cove Point liquefaction plant.

Other companies like Indian Oil Corp, Reliance Industries and Oil India have bought stakes in different shale gas projects in the US.

New Delhi has been seeking a general waiver for all Indian companies to tie up LNG supplies from the US shale gas reserves but the joint statement last September did not include any action point on the hydrocarbon sector.

New Delhi also wants Washington to allow Indian companies to do energy trading with countries sanctioned by the US besides seeking removal of state-run ONGC from the “active” category for having invested in Iran so as to enable ONGC to invest in US projects, especially the upstream sector. An MoU is also likely to be signed on cooperation in the field of gas hydrates, said sources.

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