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US gas exports to India could see momentum

New Delhi, March 10, 2014: Days after the introduction of a bill in the U.S. Congress that seeks to accelerate exports of U.S. natural gas, the U.S. Secretary of Energy, Mr. Ernest Moniz was in India to take part in the US-India Energy Dialogues which included discussions on gas imports by India.

Over the past year, surplus production of LNG (liquefied natural gas) in the US has given impetus to the prospect of LNG exports to countries such as India, Ukraine, and Japan. The surplus is largely due to rapid advances in the technology and extraction of shale gas and oil over the past few years.

However the process of exporting LNG is complicated by the fact that U.S. law does not allow exports of LNG to countries with whom it does not have a Free Trade Agreement (FTA), unless with special exceptions. This leaves out important partners like India, which do not have a FTA with the US. It also leaves out Ukraine, a country that U.S. would like to see less dependent on Russian gas.

“We welcome introduction of the legislation H.R. 6, the “Domestic Prosperity and Global Freedom Act”, to remove archaic bottlenecks on American exports.  Having pursued this matter on Capitol Hill since over a year, we shall continue to stay engaged with lawmakers such as Congressman Ted Poe to ensure that our efforts meet the desired result of heralding a new era in US-India LNG trade without restrictions”, said Sanjay Puri, Chairman of the US India Political Action Committee (USINPAC).

The proposed legislation removes the requirement of an FTA with the importing country, and instead would allow exports to any countries listed under the WTO, of which India is a member. In fact USINPAC has also set up a dedicated website that tracks latest developments on US-India LNG issues, at http://www.usinpac.com/LNG-Initiative/.

At a time when the price of gas has become a burning issue in India’s elections, India is actively looking at additional and newer sources of gas. It presently imports from Qatar and Australia, with several other suppliers in consideration to feed India’s voracious appetite for energy security.

“Our effort is to help remove policy hurdles in U.S.-India trade. Energy is a great example of a growing partnership that will help with India’s growing energy needs and reduce its dependence on middle east for energy and it will help fuel American jobs.”, said Sanjay Puri.

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