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Modi and Trump had in February agreed to expand energy ties, with India offering to increase its purchase of US oil and gas from $15bn in 2024 to $25bn in the coming years
GAIL is India’s leading natural gas company. (GAIL website)
Amid the trade deal talks, India’s leading Natural Gas Company, GAIL (India) Limited, has invited an Expression of Interest (EOI) for acquiring up to 26 per cent stake in a US LNG (liquefied natural gas) project and a 15-year gas sourcing contract. This is significant as India, during Prime Minister Narendra Modi’s trip to the US to meet President Donald Trump in February, offered to increase India’s purchase of US oil and gas by a significant amount.
As per the EOI document seen by CNN-News18, GAIL has said it is interested to source 1 Million Metric Tons Per Annum (MMTPA) of LNG from an existing or upcoming Natural Gas (NG) liquefaction project in USA on a Free on Board (FOB) basis for a period of 15 years on mutually acceptable terms and conditions. “The contract period for LNG supply may be extended further by 5/10 years on a mutual basis. LNG supply / offtake shall commence tentatively in Calendar Year (CY) 2029 to 2030 from existing Project and in CY 2030 from upcoming Project. GAIL will source LNG from the company which has the right to sell LNG from the Project,” the EOI document says.
GAIL has said it will have the option to acquire “Target Equity” at Par in the Existing Project in the USA, or an Upcoming Project in the USA which is scheduled for commissioning latest by CY 2030.
The document says that if the entire value chain of the project such as asset ownership, LNG sale rights, operation & maintenance, etc. is undertaken by a single company, Equity Option shall be exercised by GAIL in that company.
If different companies are handling the value chain of the project such as asset ownership, LNG sale rights, operation and maintenance, etc, Equity Option shall be exercised by GAIL in the Holding Company which has 100 per cent beneficial ownership of entire value chain of the Project.
“For both the above cases, the Equity Option would be on the following basis (a) LNG Company / Holding Company having upto 5 MMTPA capacity, GAIL shall have Equity Option equivalent to 26% Equity (b) LNG Company / Holding Company having more than 5 MMTPA capacity but less than or equal to 10 MMTPA capacity, GAIL shall have Equity Option equivalent to 15% Equity (c) LNG Company / Holding Company having more than 10 MMTPA capacity, GAIL shall have Equity Option equivalent to 10% Equity.”
Modi and Trump had in February agreed to expand energy ties, with India offering to increase its purchase of US oil and gas from $15bn in 2024 to $25bn in the coming years. GAIL is India’s leading natural gas company with a presence along the entire natural gas value chain, comprising of Exploration & Production, Liquefied Natural Gas (LNG) imports, Gas Transmission & Marketing, Gas Processing, Petrochemicals, LPG transmission and City Gas Distribution. GAIL is listed on the National Stock Exchange of India, the Bombay Stock Exchange and the London Stock Exchange (in the form of GDRs) with the market capitalisation of around US$ 14 billion as on March 31, 2025.
GAIL has said the EOI is an intent to source LNG along with Equity Option in an NG Liquefaction Project in the USA and its provisions are non-binding in nature.
Bids have been invited with the last date of April 28, showing the urgency of the project.
