India and Japan on Monday have agreed to jointly study the pricing of Liquefied Natural Gas (LNG) in the Asia Pacific Market which is higher than European and American markets.
A statement issued by Indian Petroleum ministry said the Indian minister for petroleum M. Veerappa Moily, and Minister for Economy, Trade and Industry Toshimitsu Motegi of Japan signed an agreement to study the LNG pricing in Asia-pacific market.
The ministry said both ministers noted that the study was an important step towards working on rationalizing the LNG prices in Asia Pacific.
The ministry said the Indo-Japan study was being carried out since the LNG prices in Asia were substantially higher than those of other major consuming regions such as Europe and North America.
"Japan and India, as major LNG consuming countries in Asia, will work together towards the development of a market environment that would enable effective, stable and globally competitive LNG procurement," the ministry quoted the agreement jointly signed by India and Japan as saying.
It said the study would form transparent and globally competitive LNG price in the Asia Pacific market to serve the common interests of Japan and India. "For both LNG producers and consumers, the LNG price should be at mutually acceptable level, considering the sustainability of the LNG market," the ministry further elaborated.
The ministry said both countries agreed that procuring LNG from more diversified suppliers and/or regions will lead to the increase of market connectivity and price convergence among regions, which should result in more competitive pricing of LNG.
It is essential to review current business practices that would hinder market liquidity, the ministry said.