India’s global hunt for energy could take a new turn with Australia offering to supply gas on a sustained basis through long-term contracts. Australia has reserves to meet India’s growing energy needs, but the new Australian government wants to tap them only on the basis of assured supply avenues. Investments can be pumped in to tap gas reserves if off-take is assured, said Australian trade minister Simon Crean, who visited India recently.
In an exclusive interview with ET, he said India could get gas at cheaper price by getting into long-term contracts. Delay in finalising such contracts could lead to higher prices, he emphasised. “The problem is that while we have the reserves, those reserves are not going to be developed unless the demand commits to the long term. Committing to the long term also means coming to grips with seeing it in the context of market price, which is a harder thing for gas because of the length of time in it,” Mr Crean said.
Australia is a key source of coal supply for India’s thermal power plants and the two countries feel that the synergy can be taken forward to cover gas, too. The long-term tie-up talk for gas comes at a time when Australia has urged India to commit to non-proliferation before seeking uranium supplies. While the broad consensus is Australia’s natural resources provide synergy to India’s energy needs, ways have to be worked out for committed supplies over a long term.
“There are ways in which they (the synergies) develop that over the longer term. Those are the institutional problems that you have got in terms of gas being supplied for other purposes, the agriculture community with fertiliser and the like, and the domestic constraints on that price,” Mr Crean said.
He was confident that Australia could be key source of India’s energy security. “We have commissioned a study through ABARE (the Australian Bureau of Agricultural Resource Economics) which I presented to the Planning Commission deputy chairman Montek Singh Ahluwalia,” Mr Creansaid.
“The study tries to set out the framework and the opportunities for energy supply and energy security in future. Australia is more than willing to understand the importance not just of the provision of this as an export and a revenue earner, but also contributing to regional security through sustaining economic growth.” That is why I talk in terms of not just the bilateral relationship but the regional dimension of it and the way in which we can sensibly use trade in an integrated way,” he said.
Surce: India Economic Times
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