Oil & Gas

India’s state-run GAIL is in early-stage discussions with Glenfarne Group to secure a long-term liquefied natural gas (LNG) supply deal from the long-delayed $44 billion Alaska LNG project. As India aims to diversify its energy sources and meet its growing natural gas demand, the outcome of these talks could shape the country's LNG import landscape significantly. GAIL, which already has contracts to import 15.5 million tons annually including 5.8 million tons from U.S. suppliers is looking to increase the share of natural gas in India’s energy mix from 6% to 15% by 2030. The firm is also expanding the capacity of its Dabhol terminal to more than double its annual throughput by 2031. However, industry insiders caution that the deal hinges on the landed cost of LNG, which must be competitive for GAIL to commit.

The discussions are part of a broader geopolitical and trade strategy, as India works to strengthen economic ties with the United States and narrow its trade surplus. A long-term LNG deal would support energy cooperation and balance trade terms, potentially easing Washington's tariff concerns on Indian goods. The Alaska LNG project, a key initiative backed by President Donald Trump, is positioned as both a commercial and strategic venture, offering energy security to allies in Asia. Thailand’s PTT recently signed a 20-year deal for 2 million tons per year from the project, while major importers such as Japan’s JERA and firms in South Korea are waiting for more clarity on financing and cost structures before committing.

Economically, Glenfarne is hoping to lock in anchor customers like GAIL before moving ahead with a final investment decision (FID) later this year. The first phase involves constructing a massive 765-mile pipeline to transport natural gas from Alaska’s north to its southern ports for liquefaction and export. With global LNG markets tightening and long-term contracts gaining popularity, a successful deal with GAIL would not only boost the project's credibility but also reaffirm India's role as a major player in the global LNG market. However, the viability of Alaska LNG remains under scrutiny, as the high infrastructure costs and long lead times must align with global demand forecasts and competitive pricing to ensure long-term success.