In order to bring about rationalization of liquefied natural gas (LNG) prices in Asia Pacific, India and Japan would carry out a joint study on the matter.
The study would focus right pricing of the fuel to secure long-term contracts at competitive rates.
The proposal to conduct the study was mooted on the backdrop of substantially higher price of LNG in Asia compared to other major consuming regions such as Europe and North America.
Japan’s Minister for Economy, Trade and Industry Toshimitsu Motegi and India’s Oil Minister M Veerappa Moily feel the study is an important step towards working on rationalization of LNG prices in Asia Pacific.
Recently, both the countries signed an agreement to initiate the study.
At present, majority of LNG contracts in the Asia Pacific market are long term with a pricing formula that is linked to the oil price.
Both the countries pledged to work together for developing “a market environment that would enable effective, stable and globally competitive LNG procurement.