President Trump and Prime Minister Modi in Houston for "Howdy, Modi!"

Indian Company Petronet LNG Plans to Sign a Texas Gas Deal Coinciding with Trump’s Visit


India’s top natural gas exporter, Petronet LNG, will sign a multi-billion dollar gas deal with Texas-based Tellurian coinciding with Trump’s state visit to India on February 24. Petronet will invest $2.5 billion over five years in Tellurian’s $27.5 billion Driftwood liquefied natural gas (LNG) export project. This deal will give Petronet rights to up to five million tons of LNG a year, and strengthen already close energy ties between India and Texas.

Texas is the biggest beneficiary of Indian investment in the United States, due mostly to recent investment increases in the energy sector. Indian investment in Texas was below $50 million in 2017, but increased to more than $666 million in 2018. India is now the fourth largest importer of US oil, which is mostly facilitated through Texas-based companies such as Tellurian. This energy market is expected to continue its growth and provide an impetus to closer overall trade ties between India and the United States.

The Petronet deal is expected to be formally announced when Trump is in New Delhi for his state visit with Indian Prime Minister Narendra Modi and fits in with his stated plans to deepen energy ties with India. The state visit will take place amongst a backdrop of ambivalent relations between the two nations, especially regarding recent trade tensions. The Trump Administration levied tariffs on imports of steel and aluminum from India, which led to Indian tariffs being placed on agricultural goods and restrictions on medical devices from the United States. Furthermore, the United States retaliated by removing India from a decades-old preferential trade program. Despite this, a broadly stated goal of the visit is to solidify a limited trade deal between the two countries to address these growing concerns.

The United States and India have developed close ties in other areas despite the trade tensions. Trump and Modi have developed a close relationship recently, which was encapsulated by the “Howdy, Modi!” wave in Houston. The two countries are expected to announce a $2.5 billion deal for US helicopters during the state visit as well, demonstrating that while trade relations are being re-configured, the strategic partnership between the United States and India is firm.

Joshua Martelli is a participant of the Young Professionals Program at the East-West Center in Washington. He is a second year undergraduate student at the University of Western Australia studying a Bachelor of Arts, double-majoring in Political Science, International Relations and Asian Studies.