The latest version of a bill in the U.S. Congress will expedite approval of exportation of natural gas to WTO countries

The latest version of a bill in the U.S. Congress for expedited approval of exportation of natural gas to World Trade Organization countries that seeks to accelerate exports of US natural gas could help India in meeting its gas requirement.

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 as India, Ukraine,and Japan. The surplus is largely due to rapid advances in the technology andextraction of shale gas and oil over the past few years. However theprocess of exporting LNG is complicated by the fact that US 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 US would like to see less dependent on Russian gas.”The introduction of the legislation H.R. 6, the “Domestic Prosperity and Global Freedom Act”, would remove archaic bottlenecks on American exports.

Having pursued this matter on Capitol Hill since over ayear, 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 newera in US-India LNG trade without restrictions”, said Sanjay Puri, Chairman ofthe US India Political Action Committee (USINPAC).

The proposed legislation introduced earlier this month removes the requirement of an FTA with the importing country, and instead would allow exports to any countries of the WTO, of which India is amember. Indian companies like Reliance Industries Ltd, GAIL India and Oil India are present in the US shale gas business. GAIL had earlier got permission from the US authorities for export of gas from the US to India.

At a time when the price of gas has become a burning issue in India’s elections, India isactively looking at additional and newer sources of gas. It presently importsfrom Qatar and Australia, with several other suppliers in consideration to feedIndia’s voracious appetite for energy security. Imports from the US are expected to cost less as compared to those from Qatar and Australia.

Source: http://www.business-standard.com/article/economy-policy/new-us-gas-legislation-could-boost-exports-to-india-114031300524_1.html