India and Japan, two of the world''s biggest buyers of liquefied
natural gas (LNG), today agreed to work together for globally
competitive price of the fuel in Asia.
The two nations have said that the LNG sold to Asian countries is priced more than the rates at which it is supplied to consumers in Europe and US. In October last year, they had agreed to carry out a joint study to examine ways to mitigate increasing import costs in Asia as well as to maintain stable supplies of LNG to the region.
Japan and India have agreed to work together towards the development of LNG markets that will enable effective, stable and globally competitive LNG procurement, said an official statement.
The joint statement followed Oil Minister M Veerappa Moily''s meeting with Japan''s Minister of Economy, Trade and Industry Toshimitsu Motegi in Tokyo on the completion of the joint study on LNG pricing mechanisms in the Asia-Pacific market.
Moily, who arrived in Tokyo this morning, will address the Second LNG ProducersConsumers Conference tomorrow.
"Forming a transparent and globally competitive LNG price in the Asia-Pacific market serves the common interest of Japan and India," the statement said. "For both LNG producers and consumers, the LNG price should be at a mutually acceptable level."
Stating that LNG prices in Asia were substantially higher than Europe and US, the two nations said procuring LNG from more diversified suppliers and/or regions will lead to an increase in market connectivity and price convergence among regions, which will result in more competitive pricing of LNG.
"The LNG prices in Asia are substantially higher than those of other major consuming regions such as Europe and North America. (This is called ''the Asian premium'')." it said.
The two nations noted that since the prices of individual contracts signed on a bilateral basis are confidential, there are no reliable price indices that accurately reflect the LNG supply and demand balance in the region at this point.
"Many contracts include inflexible conditions such as destination clause, which further the market illquidity in the Asia Pacific region," they said, adding that it was essential to review current business practices that would hinder market liquidity.
They also agreed to support the launch of a multi-lateral joint study group on LNG including energy research institutes in LNG consuming countries.
The statement said: "In order to further share the analysis and best practices from multiple initiatives and studies on LNG markets today, Japan and India support the launch of a Multilateral Joint Study Group on LNG, including energy research institutes in LNG consuming countries." PTI ANZ
The two nations have said that the LNG sold to Asian countries is priced more than the rates at which it is supplied to consumers in Europe and US. In October last year, they had agreed to carry out a joint study to examine ways to mitigate increasing import costs in Asia as well as to maintain stable supplies of LNG to the region.
Japan and India have agreed to work together towards the development of LNG markets that will enable effective, stable and globally competitive LNG procurement, said an official statement.
The joint statement followed Oil Minister M Veerappa Moily''s meeting with Japan''s Minister of Economy, Trade and Industry Toshimitsu Motegi in Tokyo on the completion of the joint study on LNG pricing mechanisms in the Asia-Pacific market.
Moily, who arrived in Tokyo this morning, will address the Second LNG ProducersConsumers Conference tomorrow.
"Forming a transparent and globally competitive LNG price in the Asia-Pacific market serves the common interest of Japan and India," the statement said. "For both LNG producers and consumers, the LNG price should be at a mutually acceptable level."
Stating that LNG prices in Asia were substantially higher than Europe and US, the two nations said procuring LNG from more diversified suppliers and/or regions will lead to an increase in market connectivity and price convergence among regions, which will result in more competitive pricing of LNG.
"The LNG prices in Asia are substantially higher than those of other major consuming regions such as Europe and North America. (This is called ''the Asian premium'')." it said.
The two nations noted that since the prices of individual contracts signed on a bilateral basis are confidential, there are no reliable price indices that accurately reflect the LNG supply and demand balance in the region at this point.
"Many contracts include inflexible conditions such as destination clause, which further the market illquidity in the Asia Pacific region," they said, adding that it was essential to review current business practices that would hinder market liquidity.
They also agreed to support the launch of a multi-lateral joint study group on LNG including energy research institutes in LNG consuming countries.
The statement said: "In order to further share the analysis and best practices from multiple initiatives and studies on LNG markets today, Japan and India support the launch of a Multilateral Joint Study Group on LNG, including energy research institutes in LNG consuming countries." PTI ANZ
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