GAIL, India’s largest natural gas provider, has reached the final stages of a deal to purchase liquified natural gas (LNG) from Qatar, industry experts told Reuters on 6 August.
The agreement entails that GAIL, which is 56 percent owned by the Indian government, would acquire 1 million metric tonnes of LNG per year from Qatar. According to three trade and industry sources, the two sides may reach a deal lasting up to 20 years, as India seeks to diversify its sources of energy following disruptions in global energy supplies with the start of the war between Russia and Ukraine in 2022.
This development follows a July agreement between Abu Dhabi’s ADNOC Gas Liquefaction Co Ltd (ADNOC), Indian Oil Corp, and France’s TotalEnergies to supply 1.2 million metric tonnes of LNG per year to New Delhi.
The deal marked the first time an Indian company has signed a long-term LNG import deal with the ADNOC. Indian officials are allocating billions of dollars to bolster its gas infrastructure, seeking to increase the share of natural gas in India’s energy mix to 15 percent from its current 6.2 percent by 2030.
India has also recently sought to reduce its dependency on the US dollar for bilateral trade. In a visit to the UAE on 15 July, India’s Prime Minister Narendra Modi signed an agreement that will allow India to settle trade with the UAE in rupees instead of US dollars, in an effort to cut transaction costs by eliminating dollar conversions.
Following a meeting between Modi and President Sheikh Mohamed bin Zayed Al-Nahyan, India and the UAE also agreed to link India’s Unified Payments Interface (UPI) and UAE’s Instant Payment Platform (IPP) for real-time currency transfers.
Bilateral trade between the two countries was $84.5 billion over the previous year, and it is hoped the two agreements will enable “seamless cross-border transactions and payments, and foster greater economic cooperation,” a statement from the Reserve Bank of India said.