The Union Cabinet chaired by Prime Minister Narendra Modi has approved the
signing of the Memorandum of Cooperation (MoC) between India and Japan on
establishing a liquid, flexible and global LNG Market.
The MoC will promote bilateral relationship between India and Japan in the
energy sector. It will contribute to the diversification of gas supplies for
India. This will strengthen our energy security and lead to more competitive
prices for consumers.
The MoC provides a framework to cooperate in facilitating flexibility in
LNG contracts, abolition of Destination Restriction Clause and also explore
possibilities of cooperation in establishing reliable LNG spot price indices
reflecting true LNG demand and supply.
India and Japan are major consumers of energy in the world. In the LNG
sector, Japan is the world's largest importer and India is the 4th largest
importer. Under the Japan-India Energy Partnership Initiative signed in January
2016, the two sides had agreed to work together in promoting well-functioning
energy markets and affirmed to promote a transparent and diversified Liquefied
Natural Gas (LNG) market through the relaxation of Destination Restriction
A ministry source said the MOU will help India in negotiating in the LNG
spot market the delivery of the product at various ports in the country at the
same cost irrespective of the distance.