KOLKATA (miningweekly.com) – ExxonMobil India LNG, a subsidiary of ExxonMobil from the US, has signed a memorandum of understanding (MoU) with State-run oil refiner-marketer Indian Oil Corporation Limited (IOC) to examine liquefied natural gas (LNG) projects in the country.

“The companies together will focus on exploring new models of delivering cost effective natural gas in India where it is most needed to complement traditional pipelines,” ExxonMobil lead country manager, South Asia, Bill Davis, said in a statement.

“What really matters is how we accelerate India’s access to affordable and cleaner energy. We see great potential here and are delighted to join forces with IOC to unlock lasting value for India,” he added.

While ExxonMobil has been supplying natural gas to India for several decades, IOC is India’s largest downstream petroleum company and is expanding its downstream operations in natural gas marketing in key domestic markets as well as entering the business of petrochemicals linked to its crude oil refineries.

Earlier ExxonMobil had signed up agreements with Indian Institutes of Technology at Chennai and Mumbai, to collaborate in research in biofuels and bio-products, gas transport and conversion, low emission technologies and gas transportation.

The teaming up of the two majors comes against the backdrop of the Indian government betting mega-buck investments in the domestic oil and natural gas sector. “India will see a massive investment of around $118-billion in oil and gas exploration as well as natural gas infrastructure over the next few years,” Petroleum and Natural Gas Minister Dharmendra Pradhan said addressing an industry event.

“As much as $58-billion will be invested by 2023 in oil and gas exploration and another $60-billion will be invested in the creation of natural gas infrastructure by 2024,” he added.

He said that India, as the sixth largest economy in the world and the third largest energy consumer after the US and China, would be the key driver of global energy demand in the coming decades and the country was offering a stable polity with a reform-focused approach and a strong institutional framework to catalyse investments in the sector.

In the current year, India’s LNG demand has been forecast to increase 10% with the country aiming to double the share of gas in its energy mix to 15% by 2030 from 6.2% at present.

India made a commitment in the Paris Agreement of 2015 to reduce the carbon emissions intensity of India's economy by one-third, and aims to more than double the share gas has in its energy mix to 15% by 2030, from 6.2% currently.

India’s current LNG import terminal capacity is about 21-million to 23-million tons a year.