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US clears way for shale gas export to India

20 May 2013 Evaluate

With the United States recently granting conditional authorization to export domestically produced liquefied natural gas (LNG) to nations that do not have Free Trade Agreement (FTA) with it, has opened up the prospects of export of shale gas to energy starved India. The decision paves the way for India, which does not have a FTA with the US, to get its companies seek similar licences for the import of much needed gas from the United States in large quantities from other terminals. However, India is unlikely to benefit immediately from this grant of licence.

As per the existing federal law, approval is required for natural gas exports to countries that have an FTA with the United States. For countries that do not have an FTA with the United States, the Natural Gas Act directs the US Department of Energy to grant export authorizations unless the department finds that the proposed exports will not be consistent with the public interest. 

The US department of energy said that the proposed exports are likely to yield net economic benefits to the United States and is unlikely to affect adversely the availability of natural gas supplies to domestic consumers or result in natural gas price increases. Further, the department said that Freeport facility in Texas is conditionally authorised to export at a rate of up to 1.4 billion cubic feet of natural gas a day (Bcf/d) for a period of 20 years. Shale gas has become an increasingly important source of natural gas in the United States over the past decade. 

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