India-Mozambique MoU for Cooperation in Hydrocarbons Sector Signed
India-Mozambique MoU for Cooperation in Hydrocarbons Sector Signed
India and Mozambique signed an MoU or Memorandum of Understanding on 28th November for cooperation in the Oil and Gas sector between the 2 nations.
Essence of the MoU
“The MoU seeks greater cooperation between the two countries in the field of hydrocarbons as India strives for energy security,” Minister for Petroleum and Natural Gas Dharmendra Pradhan was quoted as saying following the signing of the MoU.
Pradhan added that Indian PSU companies have a participating interest in the Mozambique gas fields. Keeping this is mind, they have sought the cooperation of the government with regard to this. The duration for this Memorandum of Understanding is for 5 years. The delegation representing Mozambique delegation was led by Foreign Affairs Minister Oldemiro Julio Marques Baloi.
The MoU was signed for cooperation during the visit of this minister to India.
Advantages of the MoU
The MoU will work towards enhancing bilateral cooperation on the basis of mutual benefit and equality. Cooperation will also be sought in the oil and gas sector in upstream as well as downstream sectors in areas such as capacity building, forging deeper cooperation between research and training centres and intensification of technology transfer among other provisions.
A production of 34 million tonnes of Liquified Natural Gas will be produced by Mozambique from its Rovuma Area 1 offshore block wherein state run ONGC VIdesh Ltd as well as Oil India and Bharat Petroleum Corp will purchase the 30% stake.
Another positive impact of this Memorandum of Understanding is that Indian companies will participate in the LNG project of Mozambique which will facilitate access to LNG for growing Indian oil and gas market. This will bring natural gas to India at market determined prices. Around 10 more LNG terminals are going to be set up to produce 5 million tonnes of gas on an annual basis.
Other partners of this Rovuma 1 Project are US based Anadarko Petroleum Corp, Empresa Nacional de Hidrocarbonetos EP (Mozambique), Mitsui (Japan) and PTT Exploration and Production (Thailand).
Cabinet Approved MoU
The Union Cabinet had on October 29 approved the MoU between two nations for cooperation in oil and gas in upstream as well as downstream sectors for enhancement of capacity building, closer cooperation between research as well as training centres among others. "Mozambique is strategically located near India and is ideally suited for bringing natural gas to India at market-determined price. Participation of Indian energy companies in the project will facilitate access to LNG for the growing Indian gas market," the cabinet approval read, as quoted by Business Standard.
Conclusion
This MoU will be vastly beneficial as India currently has 18,000 MW of power capacity facing gas shortage while another 10,000 MW in the pipeline are awaiting commissioning, according to Business Standard.
