India’s energy pact for LNG imports from US heralds new era of cooperation

New Delhi: With the announcement of signing a letter of cooperation between United States Energy giant Exxon Mobil and state-run Indian Oil Corporation (IOC) for the supply of liquified natural gas (LNG) from America to India, a new chapter in Indo-US collaboration was opened here on Tuesday.

The deal was formally announced by the US President Donald Trump during a joint media briefing on the lawns of Hyderabad House in the Indian capital.

Along with this, two memoranda of understanding (MOU) were signed between the two countries for collaboration in fields of health and safety of medical products. The $3 billion (Dh11 billion) agreement for the sale of Apache and Romeo helicopters by India from the US was the other highlight of a slew of agreements signed by the two countries during the US president’s current two-day tour of India that concludes later on Tuesday.

However, the agreement between Exxon Mobil and IOC is the most significant because of a rising trajectory of Indo-US energy trade. With this deal, New Delhi has made it amply clear that it now seriously considers the US as a major alternative source of energy – particularly clean energy.

The current value of India’s energy trade with the US is estimated to be worth $6.7 billion annually and it is still growing. With the Exxon Mobil-IOC pact, this figure will be upwardly revised over the next few years, adding more credence and substance to a new era of cooperation in sustainable, green energy, from a source market that has not been a traditional supplier of energy to India.

India is the world’s third-largest oil importer and the fourth-largest buyer of LNG globally.