India and Japan, two of the world's biggest buyers of liquefied natural gas (LNG), will in next three months look at buying the fuel jointly so as to hammer down high prices.
"We want to combine our buying powers to get better price," Oil Secretary Vivek Rae told reporters on sidelines of the 8th Asia Gas Partnership Summit here.
The two nations, who feel LNG sold to Asian countries is priced more than that supplied to consumers in Europe and the US, had in October last year 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.
In September, they agreed to work together towards the development of LNG markets that will enable effective, stable and globally competitive LNG procurement.
"We are seriously examining joint procurement of LNG," Rae said. "In three months we hope to examine if joint procurement is possible and work out modalities."
Asked if a joint tender can happen in three months, he said, "May be."
India, the seventh largest LNG buyer in the world, and Japan, the biggest importer of liquid gas, currently buy the gas separately. This bring to the market huge competing demand, pushing the prices up.
New Delhi has been pushing for LNG buyers forming a forum to better negotiate price with suppliers in the Middle East, Africa and Australia.
Speaking at the conference yesterday, Oil Minister M Veerappa Moily had asked large consumers in the region like China, Japan and Korea to forge an Asian buyers block to extract price discounts.
Despite 70 per cent of LNG being consumed in Asia, energy suppliers sell fuel to the region at a rate which is higher than the so-called premium markets of Europe.
"We understand that its not only demand supply imbalance, which govern prices for Asian markets. There are other elements too which determine the Buyer-Seller relationship," he said yesterday.
Moily had discussed the idea with Japan's Minister of Economy, Trade and Industry Toshimitsu Motegi when he visited Tokyo in September.
India wants LNG price to be mutually acceptable for both producers and consumers.
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.
Source:- economictimes.indiatimes.com
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