India looks for 'right prices' to boost LNG, crude imports from U.S.

FILE PHOTO: A maze of crude oil pipes and valves is pictured during a tour by the Department of Energy at the Strategic Petroleum Reserve in Freeport, Texas, U.S. June 9, 2016. REUTERS/Richard Carson

HOUSTON (Reuters) - India might increase imports of liquefied natural gas (LNG) from the United States at the right price, the oil minister said on Monday, even though some buyers in the South Asian country are trying to get rid of costly U.S. supplies.

India’s state-run company GAIL Ltd signed a swap deal with trader Gunvor to sell some of its U.S. LNG as the firm tries to cut costs for price-sensitive customers after a sharp fall in Asian spot prices made its U.S. gas unattractive, according to sources.

GAIL has contracted for most of the capacity from one of Sabine Pass’ liquefaction trains in the U.S. Gulf Coast, with deliveries expected to start in late 2017.

But Indian Oil Minister Dharmendra Pradhan said supplies of LNG and even crude from the U.S. might increasingly flow to India at the right prices.

“At the kind of reasonable price we are finding in America, we might have some more investment in America,” he said during a press conference at CERAWeek in Houston.

GAIL in 2011 signed a 20-year sales agreement with Sabine Pass Liquefaction LLC, a unit of Cheniere Energy Inc, for the supply of 3.5 million tonnes per year.

Under the recent agreement between GAIL and Gunvor, the trading firm will supply 15 cargoes or about 800,000 tonnes of LNG for India’s west coast from April through December, while GAIL will sell about 600,000 tonnes in 2018 from Sabine Pass at a premium to its pricing formula.

Pradhan said India’s current booking capacity for LNG is around 6 million tonnes per year. Its current crude imports are around 4.5 million barrels per day (bpd).

Reporting by Marianna Parraga; Editing by Lisa Shumaker