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Japan and India Signed a Memorandum of Cooperation on Establishing a Liquid, Flexible and Global Liquefied Natural Gas Market To enhance Japan-India collaboration for the formation of a new LNG market in Asia and inter-company cooperation in the field of LNG

On October 18, 2017, Mr. Hiroshige Seko, Minister of Economy, Trade and Industry of Japan, and H.E. Dr. Debendra Pradhan, Minister of State for Petroleum and Natural Gas of India, signed a Memorandum of Cooperation on Establishing a Liquid, Flexible and Global Liquefied Natural Gas Market (hereinafter referred to as the “MOC”).

1. Background

Japan and India represent nearly 40% of the world’s total LNG imports. The Ministry of Economy, Trade and Industry (METI) released its Strategy for LNG Market Development in 2016 to secure a stable and affordable energy supply through the establishment of a highly flexible LNG market. On the other hand, the demand for gas in India is expected to expand more than double in the coming decade. Strengthening cooperation between Japan, the world’s largest importer of LNG, and India, a potential leader of a trend expanding the demand for LNG worldwide, is expected to promote the establishment of a highly liquid and flexible global LNG market.

2. Key points of the MOC

Under the MOC, Japan and India will aim to conduct joint activities to establish a highly liquid, flexible and transparent global LNG market that is open to all LNG consumers and producers, and to this end, they will share knowledge to improve the functioning of the global LNG market and to conduct initiatives for raising public awareness of best practices. Specifically, the MOC covers the following fields.

  1. Accelerating efforts in facilitating more flexible LNG contracts noting that destination restrictions should be abolished and that other similar steps should be taken;
  2. Exploring possibilities of cooperation in establishing highly transparent LNG spot price indices;
  3. Sharing information between Japan and India for: emergency actions to respond to supply disruptions, diversification of LNG supply locations, promotion of open gas infrastructure and for other purposes; and
  4. Promoting shipping optimization or cargo swaps.

Appendix

Release date

October 18, 2017

Division in Charge

Petroleum and Natural Gas Division, Natural Resources and Fuel Department, Agency for Natural Resources and Energy

Ministry of Economy, Trade and Industry1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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