The Union Cabinet on 11 October 2017 approved the signing of the Memorandum of Cooperation (MoC) between India and Japan for establishing a liquid, flexible and global Liquefied Natural Gas (LNG) Market.
Highlights of the MoC
• 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.
• It will strengthen the energy security and lead to more competitive prices for consumers.
• It will provide a framework to cooperate in facilitating flexibility in LNG contracts and abolition of Destination Restriction Clause.
• It will also explore possibilities of cooperation in establishing reliable LNG spot price indices reflecting true LNG demand and supply.
Background
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, both the countries agreed to work together in promoting well-functioning energy markets and affirmed to promote a transparent and diversified Liquefied Natural Gas (LNG) market.
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