India, Japan eye joint tenders for cheaper LNG

Wed Dec 4, 2013 10:28am EST
 
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By Nidhi Verma

NEW DELHI (Reuters) - India and Japan are stepping up the pressure for cheaper liquefied natural gas (LNG) with potential joint tenders as two of the world's biggest gas buyers try to ease the pain of high prices and rising demand.

Asia is already the top destination for LNG supplies and economic expansion, nuclear plant shutdowns in Japan and South Korea and the shift toward cleaner-burning gas in smog-choked Chinese cities are boosting demand even higher.

But that demand has helped push LNG prices to near record levels and now buyers such as India and Japan are trying to find ways to cut their soaring gas import bills.

India and Japan signed an agreement in September to study joint procurement of supplies and now the two countries will hold meetings to work out the details of joint purchases.

"It is a very serious move, which means when you float a tender, maybe Japan and India could combine and can float a joint tender and see what price comes," said India's oil secretary Vivek Rae.

"Details are being worked out, this was agreed to at the ministerial level. They (Japan) have designated some Japanese corporation to work on their behalf, we will designate GAIL," Rae said, referring to India's biggest gas pipeline operator.

GAIL Chairman B.C. Tripathi said his company would meet with a Japanese counterpart next month. Ways to achieve joint procurement should be worked out in three months, he added.

The identity of the Japanese company was not disclosed.   Continued...

 
Liquefied natural gas (LNG) storage tanks and a membrane-type tanker are seen at Tokyo Electric Power Co.'s Futtsu Thermal Power Station in Futtsu, east of Tokyo February 20, 2013. REUTERS/Issei Kato