India, Russia Plan MoU on Coking Coal; Boost Crude Oil Trade

New Delhi: India and Russia are in talks to expand their energy partnership by increasing crude oil imports from Russia and possibly signing a memorandum of understanding to import coking coal to meet requirements of Indian steel industry.

These issues were discussed at a video meet between Dharmendra Pradhan, minister of petroleum and natural gas and Russian energy minister Alexander Novak on Wednesday, people aware of the development told ET.

The ministers also reviewed ongoing projects and plans including the participation of Indian companies such as Indian Oil Corporation in Russias state-owned Rosneft’s Vostok oil project in the Russian Arctic, Novatek’s deal to supply of LNG to H-Energy, cooperation between Gail and Gazprom, joint projects with Gazpromneft, and supply of crude oil by Rosneft to Indian Oil.

Delhi is seeking a long-term agreement for supply of crude oil from Russia as it seeks to diversify its sources for hydrocarbon, persons familiar with the sector told ET.

India has begun negotiations with Russia on long-term assured supplies of crude oil, especially from Russia’s Far East, and has also invited Russian companies, particularly in gas business, gas infrastructure and petrochemicals, to invest in India.

At Wednesday’s meeting, it is understood that Novak assured to support Indian energy needs, and briefed Pradhan on the recently signed OPEC+ agreement.

Pradhan welcomed the agreement as an important step in providing stability and predictability to the global energy markets and emphasised that Indian economy will continue to be the demand centre for hydrocarbons.

The two ministers also emphasised cooperation in coking coal sector, an area where considerable headway has been made since Prime Minister Narendra Modi’s visit to Russia in September 2019. In this context, Novak welcomed Pradhan’s suggestion to convene a meeting of a high level working group coal to finalise an MoU for coking coal imports from Russia.

India is keen to explore a new sea route to source crude oil and LNG from Russian Arctic. The route has the potential to cut cost and time for transporting LNG from Russia to India. Revival of Vladivostok-Chennai shipping line will also facilitate sourcing of coking coal from Russian Far East region that stretches from Siberia to the Pacific Ocean and is estimated to have 10-14 billion tonnes of oil and 14-15 trillion cubic metres of gas.

India is expected to play a key role in resurgence of demand which will be pivotal in global economic revival after the covid-19 crisis.

Source: ET

Image Courtesy:Mining Technology