India and Australia on Monday formed a sub-group to prepare a roadmap that would look into ways in providing cheap LNG for power plants in the south Asian country.
“India is willing to consider long-term fixed price contracts for the supply of gas which will enable power producer to enter into a power supply contract at an affordable price,” India’s Power and Coal Minister Piyush Goyal said in a statement released by the Ministry of Petroleum and Natural Gas.
Goyal was addressing a roundtable in Brisbane, Australia on Monday on the business opportunities for LNG and coal bed methane. He further stated that opportunities to control the entire value chain right from gas production, liquefaction, shipping, re-gasification and power generation can be evaluated at the current “historic low prices of many of these activities“.
According to the Minister, India is running one of the world’s largest renewable energy programme which aims to increase the capacity 5 times to 175 GW over the next seven years.
“This will require gas based plants which can act as spinning reserve and supply power during deficit times of day (like evenings) when renewable energy production reduces while stabilizing the grid,” he said.
He added that since coal-based power is available in India at less than 5 cents per unit, the LNG providers should consider supplying gas to India at a price that is comparable.
In order to explore the opportunities to supply Australian LNG to India, an LNG sub-group has been created “under the joint leadership of a Joint Secretary, Ministry of Petroleum and Natural Gas and a senior Australian official“.
They will be further supported by an operating team as well as representatives from NTPC, GAIL, Petronet LNG and shipping companies.
The sub-group will create a roadmap for the collaboration over the next two months, the statement added.