Japan and India will discuss the demand and supply of LNG, its pricing mechanism as well as latest trends among consumers' procurements of LNG at low prices over Tuesday-Wednesday in Tokyo, a Japanese government source said Monday.
The discussions will take place as part of a second round of meetings for a joint study on LNG pricing mechanisms in Asia-Pacific after Japan and India inaugurated the first meeting in New Delhi last December, the source added.
Both countries aim to report findings of their joint study during the second LNG Producer-Consumer Conference that will be held this autumn in Tokyo, the source said, declining to elaborate.
The senior-level meetings between Japan's Ministry of Economy, Trade and Industry and India's Petroleum Planning and Analysis Cell took place after both countries agreed to carry out the joint study following a ministerial-level meeting in Tokyo in October 2012. PPAC is under India's Ministry of Petroleum and Natural Gas.
Under the agreement, Japan, the world's largest LNG importer, and India, which is an emerging major LNG buyer, will jointly examine ways to mitigate increasing import costs in Asia as well as to maintain stable supplies of LNG to the region.
Describing the joint study as a strategic effort, Japan and India will weigh alternative pricing mechanisms to the currently dominant oil-indexed pricing for LNG imports in Asia, based on their shared view that the current price mechanism no longer has a valid rationale, Platts reported previously.
In September 2012, METI convened the first LNG Producer-Consumer Conference to bring together the operators of upstream projects and their customers. For the first time, the delicate question of how to price LNG for the Asian markets was brought out into the open, with presentations from both sides of the market coming together and formally marking the start of a public debate.
In 2012, Japan imported a record 87.3 million mt of LNG, up 11% year-on-year, data from Japan's Ministry of Finance showed. Its LNG imports last year cost an average of $864.07/mt ($16.60/MMBtu), up 13% from 2011.
