New Delhi - In another move to boost natural gas use in India, the Union Cabinet approved signing of an agreement with Japan towards joint development of a liquid and flexible LNG market and sharing technical knowhow in the area.
"The Memorandum of Cooperation (MoC) between India and Japan provides a framework to cooperate in facilitating flexibility in LNG contracts, abolition of Destination Restriction Clause and also explore possibilities of cooperation in establishing reliable LNG spot price indices reflecting true LNG demand and supply," a Petroleum Ministry release said.
Briefing reporters here after the cabinet meeting chaired by Prime Minister Narendra Modi, Petroleum Minister Dharmendra Pradhan said that the MoC would have a "shopping clause" that would allow the parties to exchange supply contracts in order to save on transporting liquefied natural gas (LNG) from overseas.
"For example, we have some gas booked from Australia and Japan has an import contract with Ras Gas of Qatar...this MoC will have a shopping clause whereby we can arrange for Japan to import from Australia, which is nearer, while India gets that gas from Qatar," he said.
"The agreement also provides for sharing knowledge on LNG technology between India and Japan, which is the world's largest importer of this clean fuel," he added.
"The MoC will promote the bilateral relationship between India and Japan in the energy sector and will contribute to the diversification of gas supplies for India," the statement said.