India and Australia to enter in to gas supply pact

Mumbai: India and Australia are finalising a proposal for India to source LNG from Australia's North West Shelf (NWS) venture. The deal envisages the supply of a 2.5-million tonne LNG supply commencing 2011 for 25-years.

The deal is expected to be signed with Australia in the first quarter of 2007. The move is in keeping with India's recent emphasis to diversify its supply sources to meet its imports, which constitute over 70 per cent of its fuel requirements.

The NWS joint venture, off Western Australia, currently has a production capacity of 11.6 million tonnes of LNG per year and will increase to 16.3 million from late 2008.

Domestic gas production is expected to reach 200 million cubic metres a day in the next five years.