GAIL Ltd., India's largest natural gas distributor, announced on Friday, [Insert Date - e.g., April 11, 2025], the issuance of a significant tender seeking both an equity stake in a U.S. liquefied natural gas (LNG) project and a long-term gas import agreement. This strategic initiative is aimed at bolstering India's energy security and aligns with broader national efforts to potentially adjust its trade balance with the United States.
According to the tender document published on GAIL's website, the state-run company is inviting initial bids for up to a 26% equity share. This investment target includes either existing U.S. LNG liquefaction facilities or new projects that are expected to be commissioned no later than 2030.
Crucially, the tender couples this equity interest with a substantial supply component. GAIL is seeking 1 million metric tons per year (mtpa) of LNG delivered on a free-on-board (FOB) basis from the chosen U.S. plant over a 15-year term. The agreement includes provisions for potential extensions of five to ten years. The company targets the commencement of these LNG deliveries between 2029 and 2030. Interested U.S. projects have until April 28, 2025, to submit their proposals.
This move supports India's ambitious energy policy goal: to increase the contribution of natural gas to its national energy mix from the current level of approximately 6.2% to 15% by the year 2030. As the world's fourth-largest importer of LNG, securing reliable, long-term supplies is critical for the rapidly growing Indian economy. While Qatar remains India's primary LNG supplier, the United States holds the position of the second-largest source.
The tender also carries geopolitical and economic weight. Increased energy imports from the U.S. could contribute to narrowing India's significant trade surplus with Washington, currently a point of discussion in bilateral economic relations. Reports suggest India is also contemplating measures like eliminating its import tax on U.S. LNG to make American gas more cost-competitive within the Indian market.
This tender marks a renewed effort by GAIL after a similar attempt to acquire a stake in a U.S. LNG facility was put on hold in 2023. That previous process was affected by the Biden administration's decision to implement a temporary pause on issuing new permits for LNG exports to countries without a Free Trade Agreement, pending further review of environmental and economic impacts. By launching this new tender, GAIL is likely targeting projects that may already possess the necessary permits or is navigating the current regulatory landscape with expectations of future policy adjustments or project-specific clearances.
This initiative builds upon GAIL's existing substantial commitments in the global LNG market. As detailed in its 2023-24 annual report, the company already has contracts totalling 15.5 mtpa from diverse suppliers, including entities in Australia, Qatar, and traders like Vitol and Adnoc. Within this portfolio, GAIL holds significant long-term agreements for U.S. LNG, securing 5.8 mtpa combined from Berkshire Hathaway Energy's Cove Point LNG facility and Cheniere Energy's Sabine Pass terminal in Louisiana.
GAIL's latest tender underscores India's proactive approach to securing vital energy resources for its future growth while carefully managing its international trade relationships and adapting to the dynamic global energy policy environment.