US Could Benefit from LNG Exports to India, China

The US stands to benefit immensely from export of LNG, particularly to the Indian and Chinese markets, where demand for the clean fuel is growing rapidly, Hindu Business Line has reported quoting from a report by NERA Economic Consulting.

At a time when the Indian Government is seeking permission to import shale gas from the US, the report recommends that allowing exports of LNG would cause no change in natural gas prices and do no harm to the overall economy, HBL said.

The report, ‘Macroeconomic Impacts of LNG Exports from the United States’, which was submitted to the US Department of Energy recently, added that liquefied natural gas (LNG) exports would cause no change in natural gas prices and would not harm the overall economy in the US.

Both India and China have some indigenous natural gas resources, but these alone are insufficient to meet domestic demand.

“Natural gas demand in these countries is growing rapidly as a result of expanding economies, improving wealth and a desire to use cleaner burning fuels. LNG will be an important component of their natural gas supply portfolio. These countries demand more than they can produce and the pricing mechanism for their LNG purchases reflects this,” it said.

The US currently has allowed only Cheniere Energy to export LNG to countries that have not signed a free-trade agreement.