India and Japan joins hand to work for reforming the LNG market for fair pricing and no destination clause for the importers.

India and Japan have reiterated to work together in the field of Liquified Natural Gas (LNG) market to reform it to a well-functioning and truely global market in which there would be balance of rights between the producers and consumers.

India holds that in the LNG market producers and consumers have equal stake. There should not be somthing like the so-called Destination clause in a LNG contract that restricts the consumers’ right- where to sell the gas.

Union Petroleum and Natural Gas Minister Dharmendra Pradhan in his engagements in Japan during his three-day visit there had focused on these aspects of India’s concern in the LNG market as one of the largest energy consumer.

In his key note address in the 6th LNG Producer- Consumer Conference in Tokyo on 17 Oct the Minister stressed on fair deal for the consumers in a LNG- import contract.

He urged the global LNG markets to join hands to design flexible terms such as pricing review, flexible take or pay, abolition of destination restriction clause in the LNG contracts. Mr Pradhan stressed that these reforms are essential for developing a transparent, efficient, truly global and balanced LNG market.

He had a bilateral talk with Minister of Economy, Trade, and Industry of Japan Mr Hiroshige Seko that also emphasised this point. They signed a Memorandum of Cooperation (MoC) on establishing a liquid, flexible and global LNG market in compliance with the Indo-Japan energy Partnership initiative signed in January 2016.

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.

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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.



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