India may contract long-term supplies of liquefied natural gas (LNG) from Australia if price is comparable to Indian coal which remains the fuel of choice for power generation companies in New Delhi.
Power Minister Piyush Goyal, who is currently on a visit to Australia for energy dialogue, conveyed India’s willingness to buy Australian LNG during a roundtable in Brisbane.
Goyal stated that additionally, opportunities to control the entire value chain right from gas production, liquefaction, shipping, re-gasification and power generation can be evaluated at the current historic low prices of many of these activities.
He also stressed that since coal based power is available in India at less than 5 cents per unit, the LNG providers should consider supplying gas to India at a price that is comparable.
In order to explore the opportunities to affordably supply Australian LNG to India, an LNG sub-group has been created under the joint leadership of a Joint Secretary, Ministry of Petroleum and Natural Gas and a senior Australian official.
A 75 percent drop in LNG prices since 2014 because of a global glut is helping India’s quest for cheaper energy supplies from overseas.
Australia has about 2.8 trillion cubic metres or 2% of world gas reserves. It is also a major exporter of coal, gas and uranium with energy exports accounting for $71 billion in 2013-14.