GAIL has floated a tender to buy up to a 26 per cent stake in a liquified natural gas (LNG) project in the US with the aim to source about 1 million tonne of the green fuel.

The US is the second largest supplier of LNG to India after Qatar. Government-owned GAIL’s effort to secure a 15-year contract to procure LNG comes at a time when India is trying to buy more petroleum products from the US to narrow the trade gap between the two countries, who are racing against time to forge a bilateral trade deal.

The tender showed GAIL wants to start taking LNG from the US project by 2029-2030. The last date for them to submit bids is April 28.

India is the world’s fourth largest LNG importer and aims to raise the share of gas in the country’s energy mixto 15 per cent by 2030 from 6.2 per cent now. In the LNG supply chain, natural gas is liquified at source, chartered by dedicated ships to the user country and re-gassified for consumers.

According to GAIL’s wishlist, it can pick up a 26 per cent stake if the upcoming project has 5mt per annum capacity. It may take 15 per cent if the project size is between 5-10mt capacity and 10 per cent for project capable of producing 10mt LNG.

GAIL has contracted to buy 15.5mt annually of LNG, including supplies from the Australia, Qatar and the US and traders Vitol and Adnoc, according to its annual report for 2023-24.

Its long-term deals with companies in the US include the purchase of 5.8 million tonnes per year of LNG, split between Berkshire Hathaway Energy’s Cove Point plant and Cheniere Energy’s Sabine Pass site in Louisiana.

GAIL had to stall a similar process in 2023 to buy a stake in a US LNG plant after then-President Joe Biden banned export permits for pending and new LNG projects. The PSU has now revived the tender as Trump’s administration has liftedthe ban.