July 16, 2025 [Reuters]- India’s state-run GAIL is in initial talks to buy liquefied natural gas from the proposed Alaska LNG project as the South Asian nation expands its import capacity, three industry sources with knowledge of the matter said.

The talks with developer Glenfarne come as India works to raise its energy imports from the United States to narrow its trade surplus as part of a broader trade agreement with Washington to avoid the imposition of hefty U.S. tariffs.

GAIL’s discussions are preliminary as the landed cost of LNG will be a crucial deciding factor for the deal, the sources said.

Glenfarne said last month that 50 firms had formally expressed interest in contracts with Alaska LNG. The project, championed by U.S. President Donald Trump, has been stuck on the drawing board for more than a decade.

GAIL did not respond to Reuters email seeking comment on the talks.

“Glenfarne does not comment on or confirm individual commercial negotiations, but Alaska LNG’s growing commercial momentum reflects the project’s competitive economic and geostrategic advantages,” it said in an emailed statement to Reuters.

India, the world’s fourth-largest LNG importer, aims to increase the share of gas in its energy mix to 15% by 2030, up from about 6% currently, to reduce its carbon footprint.

GAIL plans to increase the capacity of its 5 million metric tons per year Dabhol LNG terminal to 6.3 million tons per year by mid-2027 and to 12.5 million tons per year by 2031-32.

Earlier this year GAIL invited initial bids from companies as it seeks to buy equity in an existing LNG project or a new project that would be commissioned by 2030 at the latest.

The $44-billion Alaska LNG project could export up to 20 million metric tons per year of the superchilled gas. Alaska Governor Mike Dunleavy said in March the project could start exporting LNG by 2030.

Glenfarne expects to make a final investment decision in the fourth quarter of this year on the first phase of the project – a 765-mile (1231-km) pipeline to deliver gas from the state’s far north to its Anchorage region.

Thailand’s state-owned oil and gas giant PTT last month signed a 20-year agreement to buy 2 million tons per year of LNG from the Alaska LNG project.

Others, including South Korea and Japan’s top power producer JERA, are awaiting clarity on the financing and cost of the project.

GAIL has contracts to buy 15.5 million tons annually of LNG including 5.8 million tons from the United States.