The Indian government on Friday announced a $US5 billion (Rs4.3 billion) foreign exchange deal with US companies to develop a liquefaction project in the US state of Wyoming.
The deal, which was signed by Indian Prime Minister Narendra Modi and US President Donald Trump, will see US firms take part in the project in exchange for $US250 million.
The project will see LNG exported via the Dakota LNG pipeline, which will run between Wyoming and Montana.
Modi said the agreement with US oil companies was a “win-win” as the liquefiability deal with Wyoming would help bring India closer to US oil and gas markets.
“The Indian government has been engaged in a comprehensive process with the US oil company to develop an LNG export pipeline from the Caspian Sea to US ports and markets,” he said.
“In this way, India and the US can continue to work towards a comprehensive energy security and development agenda.”
A US government official said the deal would “provide additional financing” for the project.
“The Indian Government has a clear vision for the LNG market.
This agreement will support our efforts to develop the pipeline infrastructure in a manner that maximises Indian LNG exports to US consumers,” said US Energy Secretary Ernest Moniz.
The Indian oil minister, Dharmendra Pradhan, said the liquifiability agreement was “in the national interest”.
“This agreement will help India move closer to the US market,” he told reporters in New Delhi.
“This will give the US a new export platform for LNG and help it expand its LNG capacity to meet its needs in the Indian Ocean.”
India is expected to start exporting LNG from its Lekhtar field this year.
India has been struggling with low oil prices, a shortage of oil, and a glut of gas.
In January, it announced a plan to buy more than 100 million barrels of gas a day from the US.