Dine with me, get your photo-ops but promise to buy American LNG.
That’s the implicit message going out from the Trump White House to the parade of global leaders who turn up at the Oval Office.
For Trump, drones and planes come further down the scale.
Trump dined with Indian PM Modi June 26, he dined with South Korean president Moon Jae-in within 48 hours, he sent the same message to both countries -I’ll negotiate hard but if you buy LNG from us, I’ll be nice, I may not tweet something nasty that’ll make your trip’s optics dead on arrival in your home country.
South Korea has lost no time. Trump is lauding the South Koreans for signing a 20 year pact with Cheniere to import 3.5 million tons of LNG annually.
Not so easy with India. Gas Authority of India Limited and Cheniere of the United States are in the process of re-negotiating a long-term supply contract signed in 2011 for an estimated $22 billion.
Cheniere, currently the only U.S. company exporting LNG, has reportedly said it is not open to a lower price.
GAIL has deals to buy 5.8 million tonnes of U.S. LNG per annum for 20 years, mostly with Cheniere, but is now asking to re-negotiate. Supplies will likely start only in 2018.
Asian markets account for about 70% of global LNG shipments, and India is one of the fastest-growing importers.
Trump’s push to export US produced liquified natural gas is a roaring hit for the domestic audience and giving the US President the best press he’s got since his inauguration six months ago.
For an India synchronising itself with Trump’s America First agenda, America’s LNG shop is open for business and reporting back to the most powerful office in America on who’s buying in and who’s not.
In 2016, maximum LNG imports came from countries in the Middle East and South Asia. An Economist Intelligence Unit forecast says China and South-east Asian countries will absorb much of the additional supply in 2017-18.
On the supply side, LNG exports will expand in 2017‑18 driven by new supplies from the US and Australia. For Trump, it is important to get deals signed before the first train from the massive 22.5m-t/y Yamal project in Russia starts commercial operations, with the second and third trains expected to start in 2018 and 2019.
“We’re looking forward to exporting more American energy to India as your economy grows, including major long-term contracts to purchase American natural gas, which are right now being negotiated, and we will sign them. Trying to get the price up a little bit”, Trump said even as his last swipe admitting to haggling over the price tag took the Indian team aback for a few seconds in the sun soaked Rose Garden.
Trump has made the sale of US produced liquefied natural gas top priority and he’s looking increasingly comfortable in the political sweet spot that it creates - it speaks to his most loyal voters deep in America’s heartland of a muscular America, at once wealthy and self sufficient.
See what he said to South Korea’s president: “South Korea is giving very, very big orders to the United States for -- as you know, for military. They're buying many F-35 fighter jets from Lockheed, and they're buying other military equipment at a level that they've never reached before. So that's good. Also, I understand you're dealing with Alaska -- great state -- on natural gas, and other parts of the United States. We have a lot of natural gas, so we love that you're going to do that.”
It’s not only Trump who is beating the drum on LNG. The day immediately after Modi took wing from Washington DC, Vice President Mike Pence spoke at the USIBC, the premier Indo-US business lobby, setting a high bar for two way trade at “$500 billion” by the end of Trump’s term.
“President Trump has put a renewed focus on American energy, approving the Keystone and Dakota Pipelines. America is open for business once again”, Pence told the cream of Indian business leaders.
For the last few weeks, especially after the high drama of the Comey testimony settled down, Trump has been relentless on his government’s LNG push. “We’re here today to usher in a new American energy policy -- one that unlocks million and millions of jobs and trillions of dollars in wealth. For over 40 years, America was vulnerable to foreign regimes that used energy as an economic weapon. Americans’ quality of life was diminished by the idea that energy resources were too scarce to support our people. We always thought that, and actually at the time it was right to think. We didn’t think we had this tremendous wealth under our feet. Many of us remember the long gas lines and the constant claims that the world was running out of oil and natural gas”, he said soon after seeing off Modi.
Trump has come in for some serious praise across the aisle from the best names in financial reporting for unveiling his most substantial initiatives in the natural gas sector to date.
Trump’s push for America-produced LNG exports is all the rage in America’s leading financial dailies. The White House is making a special effort to highlight Trump’s LNG export-led wins in its daily media briefings.
Trump, like Obama, is using natural gas exports as an instrument of trade policy, declaring openly and often that the goal is twofold - to create jobs at home and reduce trade deficits.
Although LNG contracts are typically signed between private companies, the US government plays a powerful role in oiling the wheels for quick approvals.
Published Date: Jul 01, 2017 01:22 am | Updated Date: Jul 01, 2017 01:22 am