GAIL Seeks 26% Stake in US LNG Project and 15-Year Supply Deal Amid Trade Talks

GAIL (India) Ltd has issued a tender to acquire up to 26% equity in a liquefied natural gas (LNG) project in the United States. The company is also looking to sign a 15-year LNG supply agreement for sourcing 1 million metric tons per annum (MMTPA), with an option to extend the contract by another 5 to 10 years.

As of 9:36 AM on April 15, 2025, GAIL (India) Ltd share price was trading at ₹176.90, a 3.02% up, down 25.64% over the past six months and 15.59% over the past year.

Timeline and Contract Terms

According to the Expression of Interest (EOI) document, LNG offtake is expected to begin around 2029-2030 from an operational project, or from 2030 in the case of a new project. The gas will be sourced on a Free on Board (FOB) basis from a company that holds the right to sell LNG from the project.

The EOI is non-binding and allows GAIL to explore supply and equity participation on mutually agreed terms.

Equity Participation Details

GAIL has proposed different equity limits depending on the size of the project:

• For projects up to 5 MMTPA capacity – up to 26% equity
• Between 5 and 10 MMTPA – up to 15% equity
• Above 10 MMTPA – up to 10% equity

Equity participation will depend on whether the entire value chain is managed by one entity or split among different companies. If managed by different entities, GAIL will consider acquiring equity in the holding company with full ownership of the value chain. Bids must be submitted by April 28, 2025.

Background and Trade Context

This tender comes at a time when India is seeking to increase energy imports from the U.S. This follows earlier discussions during Prime Minister Narendra Modi’s visit to Washington in 2024, where India proposed increasing oil and gas imports from $15 billion to $25 billion.

GAIL had previously paused similar plans in 2023 due to a ban on U.S. LNG export permits. That ban has now been lifted.

India is currently the fourth-largest LNG importer and aims to increase the share of gas in its energy mix to 15% by 2030, up from 6.2%.

Conclusion 

The tender is part of GAIL’s plan to secure long-term LNG supply and take equity in the U.S. based projects expected to start operations by 2030, as India continues to expand its gas sourcing arrangements.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.