The Union Cabinet approved signing of Memorandum of Cooperation (MoC) between India and Japan on establishing a liquid, flexible and global Liquefied Natural Gas (LNG) Market.
The MoC provides framework to cooperate in facilitating flexibility in LNG contracts, explore possibilities of cooperation in establishing reliable LNG spot price indices reflecting true LNG demand and supply and abolition of Destination Restriction Clause.
The MoC aims to promote bilateral relationship between India and Japan in the energy sector. It also seeks to contribute to the diversification of gas supplies for India to strengthen energy security and provide more competitive prices for consumers.
India and Japan are major consumers of energy in world. In LNG sector, Japan is world’s largest importer and India is 4th largest importer. Under the Japan-India Energy Partnership Initiative signed in January 2016, both countries had agreed to work together in promoting well-functioning energy markets and affirmed to promote a transparent and diversified LNG market through relaxation of Destination Restriction Clause.