India, Asian countries to launch gas buyers' club

Indo Asian News Service

New Delhi, Sep 3 (IANS) India along with other Asian gas consumers is working to form a gas buyer's club, head of a state-run gas utility said here Tuesday.

It is being done in view of the global gas market turning into a buyer's market.

"All the major Asian LNG (liquefied natural gas) buying nations are coming together to form a buyer's club," GAIL India chairman B.C. Tripathi said at a conference on India's energy security.

The Federation of Indian Chambers of Commerce and Industry (FICCI) and the external affairs ministry organised the meet.

"Dec 3 when we formally meet to launch the club, GAIL will be chairing the meeting," Tripathi added.

India along with Japan, China, South Korea and Taiwan account for about two-thirds of liquid gas traded globally.

The proposed buyer's club will bring negotiating strength to pricing and other terms, particularly in a situation where prices start rising with increased global demand.

Gas price is currently calculated on a freight-on-board (FoB) basis adding up the price of gas, liquefaction costs, transport, insurance and other charges.

Instead, the gas buyer's club is working to take care of logistics by which they would take cargoes through the shortest distance, thereby saving on costs. Such a change would also enable gas trading among club members through cargo swaps.