India may sign deal for Australia LNG supply

India expects to sign a deal for the supply of 2.5 million tonnes of liquefied natural gas from Australia's North West Shelf, an oil ministry official said today, to meet demand in Asia's third-largest economy.India produces barely half the gas it uses and has been negotiating deals to secure supplies ever since it started importing gas from Qatar in 2004."It is for a supply of 2.5 million tonnes of LNG per year, and believe me when I say this, the pricing is extremely affordable," MS Srinivasan, petroleum secretary, said."We might sign the agreement by September."The gas will start arriving in September 2009 at a LNG terminal in Kochi, southern India, run by Petronet, a company promoted by state-run firms. The terminal has a capacity of 2.5 million tonnes annually.The North West Shelf joint venture is owned by Woodside, BHP Billiton, Chevron, BP, Japan Australia LNG (MiMi), a joint-venture of Mitsubishi Corporation, Mitsui and Company and Woodside's 34 percent shareholder, Royal Dutch Shell.India is promoting LNG imports and is also in talks to build pipelines to bring natural gas from Iran, Turkmenistan and Myanmar as gas usage increases in the energy hungry economy.It plans to import 7.5 million tonnes of LNG a year from Iran, starting in 2009 and running for 25 years.