With future domestic demand becoming less certain, Japanese LNG traders are looking at overseas opportunities to sustain their strong global positions. One of these will be the potential gasification of India’s economy.
Helping India switch from coal to gas will require more than just LNG procurement. Wider use of gas in India requires investments in pipelines and other delivery infrastructure, a factor that’s starting to offer contracts for Japan’s broader energy-industrial complex – engineering firms like IHI Corp.
Beyond the economic needs, the two countries both view energy as a security issue and hope their joint work in LNG, as well as other fields, will help with geopolitical goals, such as countering China’s growing influence in the region and global energy markets.
One of the most significant Indo-Japanese LNG projects was launched in mid-April when Mitsui & Co. signed an accord with India’s Inoxcva. The two plan to build “small-scale LNG infrastructure” across India to help local automotive, mining, shipping and other transport companies switch to LNG – even when there are no pipelines in the vicinity to deliver gas.