India LNG Buyers Negotiate US Deals Before Modi-Trump Summit

(Bloomberg) --

India’s top importers of liquefied natural gas are holding talks to buy more fuel from US suppliers, ahead of Prime Minister Narendra Modi’s expected meeting with President Donald Trump in Washington this week.

Indian Oil Corp., Bharat Petroleum Corp Ltd and Gail India Ltd. are considering purchases, India’s Oil Secretary Pankaj Jain told reporters in New Delhi on Monday, adding some companies could also be open to buying shares in US LNG projects.

“We are talking with US on both crude and LNG, but LNG is a bigger priority than crude,” Jain said.

People familiar with the matter had earlier said that Indian buyers including Indian Oil were in discussions to buy LNG on a long-term basis from US export giant Cheniere Energy Inc. and other companies with access to American supply. Gail India Ltd. is also considering investing in a US project, some of the people said.

Buyers will hold meetings over the next few days as energy producers and purchasers gather for the India Energy Week conference in Delhi, said the people, who asked not to be identified discussing sensitive matters. 

Indian importers are under pressure from the government to reach deals that could smooth relations with Trump, the people said, but they will be looking for the best possible terms before signing any agreements. 

Cheniere declined to comment. India’s Ministry of External Affairs, Indian Oil, and Gail did not respond to Bloomberg requests for comment.

The discussions in the Indian capital come as Modi prepares to travel to Washington later this week. He may well follow the example of Japan’s prime minister Shigeru Ishiba, who, in a meeting last week, pledged to buy more LNG from the US in order to reduce its trade surplus. 

Modi has shown himself willing to appease the US president, showing no resistance to accepting the return of undocumented Indian migrants and making clear the nation will stick to the dollar as a trading currency. Indian officials have said he is prepared to discuss reducing import tariffs and buying more defense equipment as well as energy.

India is not alone. Other governments across Asia, including Taiwan, Japan, South Korea, and the EU are considering purchasing more US LNG to head off Trump’s tariffs and reduce their trade surplus with the world’s biggest economy.

The US is the world’s top exporter of LNG, while Indian demand for the power plant and industrial fuel is set to rise through the decade as the nation seeks to curb dependence on dirtier options. 

Indian companies and officials have stepped up conversations with US suppliers following Trump’s election victory last year. It isn’t clear how many deals will actually materialize. Any new deals likely wouldn’t start until later this decade, as there is little spare supply available now.

(Updates with oil secretary comments in second and third paragraphs.)

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