India’s minister of petroleum and natural gas Dharmendra Pradhan signed a memorandum of cooperation on LNG with Japanese minister of economy, trade and industry Hiroshige Seko.
Under the MoC signed during Pradhan’s visit to Japan the two countries will work on establishing a liquid, flexible and global LNG market.
The MoC provides a framework to cooperate in facilitating flexibility in LNG contracts, the abolition of destination restriction clause and also explore possibilities of cooperation in establishing reliable LNG spot price indices reflecting true LNG demand and supply.
This agreement would help in promoting bilateral relationship between India and Japan in the LNG sector, the ministry said in a statement.
They also explored joint cooperation in the areas of LNG sourcing, swapping and optimization of LNG sources and commercial exploitation of methane hydrates.
During his visit to Japan, Pradhan held a speech at the LNG conference in Tokyo, noting that the global LNG market is undergoing a major transformation driven by new supplies which has created a situation of oversupply.
He urged the global LNG markets, in which producers and consumers of LNG have equal stakes, to join hands to design flexible terms such as pricing review, flexible take or pay, the abolition of destination restriction clause in the LNG contracts.
Pradhan stressed that these reforms are essential for developing a transparent, efficient, global and balanced LNG market.