The companies agreed to cooperate in identifying, investigating and developing potential business arrangements and commercial initiatives.
For Woodside, the deal gives the Perth-based major the chance to tap the market of a country which has an energy crisis worsening by the day, while Adani, which is also developing a $US7 billion coal mine, rail and port project in Queensland, gets to tap the Australian player’s resources and technological expertise.
India was self-sufficient in gas until 2004, when it started importing LNG from Qatar, and has increasingly relied on importing LNG as it has not been able to create sufficient gas infrastructure on a national level or produce adequate domestic gas to meet demand.
It was the world’s fourth-largest LNG importer in 2013, following Japan, South Korea and China, and consumed almost 6% of the global market, according to data from IHS Energy. Indian companies hold both long-term supply contracts and more expensive spot LNG contracts.
India – the world’s third largest economy in 2013 and fourth-largest energy consumer after China, the US and Russia in 2011 – is increasingly dependent on imported fossil fuels despite its massive coal reserves and healthy growth in gas production over the past two decades.
Primary energy consumption in India has more than doubled between 1990 and 2012, reaching an estimated 32 quadrillion British thermal units.
India has the second-largest population in the world, at more than 1.2 billion people in 2012, growing about 1.3% each year since 2008, according to World Bank data.
Meanwhile, India’s per capita energy consumption is a third of the global average, according to the International Energy Agency, indicating potentially higher energy demand in the long term as the country continues its path of economic development.
In its International Energy Outlook 2013, EIA projected India and China to account for about half of global energy demand growth through 2040, with India’s energy demand growing at 2.8% per year.
Woodside CEO and managing director Peter Coleman, who signed the MoU with Adani chairman Gautam Adani in Gujarat, said that the deal was a clear demonstration of his company’s commitment to the Indian LNG sector and marked a significant milestone in strengthening relations between the companies.
“India is an important emerging LNG market in which we see enormous supply potential as infrastructure is developed,” Coleman said.
“Adani is at the forefront of the LNG industry in India and committed to developing partnerships to support securing reliable long-term supplies of clean energy.”
