FERC Forecasts More Affordability of LNG in India due to Rise in US Supply

Team Industry Outlook | Wednesday, 04 March 2020

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The US chief for energy regulators has expressed that owing to the rise in the number of producers, the LNG supply will increase which would result in more affordability of the same in India.

Neil Chatterjee, Chairman, Federal Energy Regulatory Commission who is on a visit to India said,“Law of supply and demand, more US gas contributing to the global supply, I am optimistic will bring down the cost of gas globally. The efficiency of the US industry when it comes to production, transportation, I am hopeful that the cost of gas will come down to where it will be affordable for India.”

There has been a massive impact of the last decade’s shale revolution on the LNG production of US.

It has increased the production levels of all the leading manufacturers of the country and has resulted in making US, the top manufacturer and exporter of LNG.

When it comes to the primary energy mix, India currently uses six percent og LNG and is making plans to increase that level to 15 percent by the end of the coming decade. Until now, India was unable to import LNG from the US owing to high tax on imports. But now, they will be able to afford LNG imported from the US owing to changes that have taken place in the US LNG industry.

“The US is gradually increasing foothold in the LNG export space, and a recent fall in the LNG rates to record lows hasn’t dented investor interest in setting up new LNG export facilities in the US”, Chatterjee said. He added, “All the signals I see from domestic participants as well as our international allies, people continue to be bullish about the prospects for US LNG. A wider adoption of natural gas in the electricity sector is becoming a big support for increased deployment of renewables in the US.”

Chatterjee further expressed to media,“What we are seeing is increased deployment of renewables in the US is being done on a backbone of gas. And so I think they are complimentary today and will continue to be for the foreseeable future. And I think again that's where India can learn from our experience.”