In a move which would open floodgates of shale gas exports from the US to India, the Obama Administration on Saturday granted conditional authorisation to export domestically produced liquefied natural gas (lNG) to nations that do not have Free Trade Agreement (FTA) with it.
The Pioneer had first reported in February 2013 on how the US Government had given an in-principle approval to a third party study conducted by an agency on long ranging effects of exporting lNG to countries with which it has no Free Trade Agreement (FTA) like India. A development considered as a positive move aimed at allowing shale gas shipments to New Delhi.
Despite opposition from a strong domestic petrochemical lobby to the US Government's approval to the study, sources in the Petroleum Ministry in New Delhi had informed that India had perceived some opposition from the US' domestic sectors on the proposed move, however it was confident that there won't be any problem as in the long run export of lNG would only benefit both the US as well as India.
Meanwhile according to PTI, the US Department of Energy announced that that it has conditionally authorised Freeport lNG Expansion, lP and FlNG liquefaction, llC (Freeport) to export domestically produced lNG to non-FTA countries from Freeport Terminal on Quintana Island in Texas.
Given that the companies from countries like China, Japan and Britain have already have an overwhelming stake in this Texas company, India is unlikely to benefit immediately from this grant of license.
But the decision paves the way for India, which does not has a FTA with the US, to get its companies seek similar licenses for import of much needed gas from the United States in large quantities from other terminals.
The existing federal law generally requires approval of natural gas exports to countries that have an FTA with the United States.
For countries that do not have an FTA with the United States, the Natural Gas Act directs the Department of Energy to grant export authorizations unless the Department finds that the proposed exports "will not be consistent with the public interest."