GAIL Eyes US LNG Stake and Long-Term Supply Deal Amid Expanding India-US Energy Ties

GAIL Eyes US LNG Stake and Long-Term Supply Deal Amid Expanding India-US Energy Ties

New Delhi: As India looks to strengthen its trade ties with the United States, state-owned natural gas utility GAIL (India) Ltd has launched a global search for a strategic stake in a US-based LNG (liquefied natural gas) project and is seeking a 15-year supply contract for importing LNG. This move aligns with India’s broader agenda of reducing its trade surplus with the US while deepening energy cooperation.

GAIL's Strategic Push: LNG Equity and Long-Term Deal

GAIL has formally invited expressions of interest for acquiring up to 26% equity in an American LNG project, preferably one that is operational or in advanced stages of development. The company is also looking to secure a 15-year LNG offtake agreement, with an annual sourcing volume of at least 1 million tonnes.

The targeted projects are expected to have a capacity of 5 to 10 million tonnes per annum or higher. This initiative positions GAIL to diversify its global energy portfolio while ensuring long-term fuel security for India’s growing energy demands.

Trade Diplomacy Meets Energy Strategy

The move follows high-level discussions between Prime Minister Narendra Modi and US President Donald Trump during a recent summit in Washington. One of the key outcomes of the meeting was a mutual commitment to enhance bilateral energy cooperation.

India has committed to increasing its energy imports from the United States, raising the projected value from $15 billion in 2024 to $25 billion in the coming years. This forms a part of New Delhi's broader efforts to narrow its $45.7 billion trade surplus with the US and push towards the ambitious goal of $500 billion in bilateral trade over the next five years.

India’s Energy Dependency and Diversification

India continues to rely heavily on energy imports, fulfilling 85% of its crude oil and 50% of its natural gas requirements through external sources. The United States ranks as the fifth-largest oil supplier to India and the second-largest supplier of natural gas.

This strategic investment push by GAIL not only aligns with India’s energy diversification goals but also complements the US's increasing focus on energy exports following recent policy shifts under the Trump administration, which lifted the previous freeze on LNG export permits imposed during President Biden’s term.

GAIL's Legacy in US Energy Sector

GAIL is not new to the American energy landscape. During the US shale boom, it was among the first Indian firms to invest in US-based projects. Notably, the company had entered into long-term LNG supply contracts with US exporters as early as 2013, at a time when few viewed the US as a credible LNG supplier.

GAIL’s early bets proved timely, and the company played a pioneering role in shaping India’s LNG import strategy over the past decade.

Rebalancing Investments: Exit from Eagle Ford Shale

In parallel to its new investment plans, GAIL is also exiting its 20% stake in the Eagle Ford shale project in Texas. The decision stems from sustained low gas prices, which rendered the venture unprofitable. The stake was originally acquired in 2011 from Carrizo Oil & Gas Inc., marking GAIL’s initial foray into US energy assets.

The company now seeks more financially viable and strategically aligned LNG assets, particularly those offering stable long-term returns.

Conclusion: Strategic Synergy Between Diplomacy and Energy

GAIL’s current global outreach for a new US LNG stake and supply contract reflects India’s dual-track approach—leveraging diplomatic engagements to unlock strategic energy opportunities while building a robust and diversified fuel supply chain for the future.

As India transitions into a gas-based economy, moves like this not only enhance energy security but also demonstrate how economic diplomacy and trade strategy can be effectively integrated with national energy planning.