India, Japan plan joint LNG trading

India and Japan on Thursday discussed enhancing cooperation in petroleum and natural gas as part of increased bilateral cooperation between the two countries. Japan's state minister of economy, trade and industry Kazuyoshi Akaba met the minister of state (independent charge) for petroleum and natural gas Dharmendra Pradhan to work out a framework to take the energy dialogue forward.

Pradhan said India and Japan can work together to facilitate LNG trading in the Asian region with a focus on destination flexibility to ensure efficient gas supply for the region.

As part of the energy cooperation programme, India's state-run gas utility GAIL India Ltd has already signed an agreement with Sumitomo Corp, Japan's third-largest trading house, for cooperation in the procurement of natural gas and petrochemicals.

"Under the memorandum of understanding (MoU), GAIL and Sumitomo will pursue business opportunities in natural gas and LNG value chain business globally, specifically covering cooperation in petrochemicals, natural gas procurement, pipelines and LNG," GAIL had stated in a release last week.

Both delegations also discussed the issues related to technology transfer in the field of gas hydrates. Pradhan said GAIL needed to charter up to 12 LNG carriers for bringing the LNG contracted from the US.

As a first step, Pradhan said, a decision has been taken to construct at least three LNG carriers in domestic shipyards. He urged his Japanese counterpart to impress upon Japanese fleet owners to participate in GAIL's tender and also asked for help to construct three LNG ships through transfer of technology and by ensuring collaboration between Japanese and Indian shipyards.

He said the resurgence of the Japanese economy will have a positive impact on India. He said both countries have large energy consumers and are striving to secure their energy needs. He welcomed the Indo-Japanese cooperation for smart community projects under the Delhi-Mumbai Industrial Corridor (DMIC).

Pradhan said that Japan is a model for India on LNG procurement and both countries could cooperate in devising a common strategy so that LNG can be procured at competitive prices. He said that India can learn from Japan on energy conservation, common facilities, consumer dialogue, etc.