New Delhi — Global oil and gas majors are looking to India, the world’s third biggest oil importer, to buy some of their excess liquefied natural gas (LNG) as the South Asian nation improves its gas infrastructure and strives to reduce emissions.
Spot LNG prices have more than halved since last year due to oversupply as producers battle for market share.
The Indian market looks set to grow, however.
The country is investing $60 billion in gas infrastructure, including setting up cross-country pipelines and LNG import terminals to connect gas-starved regions to supply hubs.
Oil Minister Dharmendra Pradhan has said that by the end of Prime Minister Narendra Modi’s current term in 2024, India will be ready with a cross-country natural gas grid.
“India is emerging as a major demand center for gas. India is going to be a very exciting market … We see it as an important energy market for decades to come,” Peter Clarke, senior vice president of global LNG at Exxon Mobil Corp told Reuters at the India Energy Forum by CERA Week, on Monday.
Exxon signed a memorandum of understanding with India’s biggest state-owned oil refining company Indian Oil Corporation Ltd on Monday to explore “new models of delivering cost-effective natural gas in India.”
“We see great potential here,” Bill Davis, lead country manager of South Asia at ExxonMobil, said in a statement.
Exxon also has a deal to supply LNG to Petronet LNG Ltd (PLNG.NS), India’s biggest gas importer, under a long-term agreement from its Gorgon Project in Australia.
India currently consumes 166 million standard cubic meters per day (mscmd) of gas out of which half is met through LNG imports, according to government data.